A well-designed program to promote productive behavior and skills can not only energize an organization’s workforce but also become an essential element of any successful transformation.
Picture this: an international manufacturing corporation with thousands of workers is spun off from its parent. In less than a year, its stock price drops more than 80 percent, morale plummets, and measures of the organization’s health drop into the bottom quartile of its sector. Something has gone very, very wrong.
Fast-forward four years, and the company’s stock price has increased sixfold. A step change in organizational health has taken the corporation from the bottom to the second quartile, with its employees feeling more connected to each other and invested in the success of the company. Plant safety has dramatically improved, with increased discipline and effective risk management. Customers have noticed and celebrated the changes. One even calls the CEO to say the manufacturer will be the customer’s preferred vendor going forward.
So what changed? In this real-life example, the manufacturing company undertook a full-scale transformation effort to change its trajectory on performance, organizational health, and one other crucial value-building element we call “capabilities,†or the hard and soft skills needed to help organizations reach—and sustain—their full potential.
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When it comes to enterprise-wide transformations, we know that most companies miss the mark on capabilities during their initiatives. While the majority of organizations recognize the importance of a skilled and motivated workforce, many don’t devote enough time and resources to developing one. The priorities lie elsewhere, and an irreplaceable opportunity is missed. For others, foundational capability building sounds too simple—we are already doing this, a CEO might think. But in our experience, what sounds like common sense is rarely common practice across an organization, and that leaves opportunities to better performance on the table.
Capability building goes well beyond traditional training of employees: it’s about fundamentally changing how the work gets done. It’s also one of the best ways to energize people, from the C-suite to the factory floor, to support the transformation in the first place. Without that energy, achieving and sustaining a successful transformation becomes exceedingly difficult—perhaps impossible. But with effective capability building, companies develop the mindsets and behaviors to deliver transformational gains and add to these gains over time, embedding an execution engine for continuous value improvement.
In this article, we explore the essential elements of a robust capability-building program. We show how empowering employees with new skills not only enables sustainable change at scale but also helps the bottom line, as it did during the holistic transformation eventually undertaken by the international manufacturing corporation previously described.