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(gentle music)

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<v Narrator>Transformation, it seems like every CEO</v>

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is talking about it in today's uncertain

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and volatile global business environment.

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But they're finding that organizational change

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is easier said than done.

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In fact, around 70% of such initiatives

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fall well short of their intended goals.

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A common reason is that leaders often under appreciate

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the importance of changing mindsets and behaviors.

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From behavioral science,

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we know the human biases make change difficult.

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We struggle to turn intention into action.

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We lean towards preserving the status quo.

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We fear failure more than we seek success.

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How can you overcome these mental roadblocks to change?

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Leaders should adopt the following three priorities.

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(gentle upbeat music)

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<v ->First, set a transformational ambition.</v>

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Set high aspiration and overarching strategic financial

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and operational initiatives needed to get there.

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Declare war on the three enemies of operational excellence:

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waste, overburdened people, and uneven loading on

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operations. And instill new principles and practices.

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They should include a willingness

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to challenge the status quo, new ways of working,

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and empowerment of frontline teams.

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<v ->Second, organizations, leaders,</v>

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individuals need to develop the right mindsets

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and behaviors.

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We have found that transformations

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have a much higher rate of success when leaders are focused

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on achieving sustained behavior change.

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From our experience and applying the lessons

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of behavioral science, there are four keys here.

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First, the ambition and vision must be clear,

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and it must be authentic.

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Second, leaders have to walk the walk,

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not just talk the talk.

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In our experience,

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the chances of successful behavioral adoption

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across an organization are up to 80% higher

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when leaders are acting as role models for that behavior.

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Third, organizations need to invest

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in building the right capabilities

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and skills to deliver on the vision.

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And then you need to align organizational structure

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and processes to support that vision.

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<v Narrator>To embed these best practices,</v>

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anchor the desired behavior changes with guidelines,

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rules, and targets; be transparent about progress

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through dashboards, check-ins, and other techniques;

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establish accountability by showing that behavior change

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is being monitored; and provide consequences,

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both positive and negative, for behavior change.

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<v ->Third, build and track the right capabilities.</v>

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Employees' mindsets shift when they have the opportunity

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to learn and use new skills and when they're recognized

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for higher performance.

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Provide coaching for managers

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to help them in the transformation journey,

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rotate shop floor team members into improvement roles,

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and provide training for employees

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into how to solve problems in faster and more agile ways.

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<v Narrator>In today's volatile times,</v>

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organizational transformation is becoming imperative.

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With our industry-leading change management capabilities

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and expertise in behavioral science,

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BCG can help you succeed in this journey.

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(gentle upbeat music)