Employee Engagement is Key to Successful Large-Scale Change

According to a recent survey titled What Successful Transformations Share conducted by McKinsey (2010), maintaining strong leadership and energy for change among employees are two principles of success. When executed well, these principles reinforce one another. For example, when leaders focus on ensuring that frontline staff members feel a sense of ownership, the results show a 70 percent success rate for transformations. When frontline employees take the initiative to drive change, transformations have a 71 percent success rate. When both principles are in effect, the success rate rises to 79 percent.

Their survey also identified eight successful structural and executional approaches to change. Five of them relate to ensuring that employees are engaged, often through leadership initiatives.

• Instill a sense of ownership for the change among frontline staff
• Use ongoing communications to involve and energize the organization
• Ensure leaders “walk the talk” by role-modeling the desired changes
• Deploy top talent to carry out critical parts of the transformation
• Clearly define roles and responsibilities to promote accountability for results

Business transformations are not the only time that employee engagement matters. Towers Watson found that employee engagement through effective communication is an indicator of financial performance. Companies that engaged employees through highly effective communication had 47% higher total returns to shareholders over the last five years compared with firms that were the least effective in engaging employees through communication.¹

Moreover, ISR² found over a 12-month period companies with high levels of employee engagement benefitted from the following:

• 19.2 percent improvement in operating income
• 13.7 percent improvement in net income growth rate
• 27.8 percent rise in EPS (earnings per share)

Bottom line: employee engagement strategies are a smart investment to increase the success rate of your large-scale change efforts and improve company performance.

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¹ 2009/2010 Communication ROI Study Report: Capitalizing on Effective Communication, Towers Watson, 2009
² The ISR Employee Engagement Report, ISR, 2006