Traditional approaches to business transformation, combining top-down direction with bottom-up execution, aren't working. Currently, fewer than 1 in 8 changes have lasting results, and 7 out of 8 have no lasting impact. Traditional top-down approaches may help reduce costs and improve efficiency, but they fail to deliver lasting progress in business performance.
but why? Because sustained performance improvements don't just mean lower costs. It's about fundamentally changing how organizations operate and what they achieve. Identifying these necessary changes typically requires insight and experience from somewhere in the middle, rather than at the top or bottom of the corporate hierarchy.
More specifically, top-down direction often overlooks the nuances that are important to taking performance to new heights. Executives can become detached from the details of day-to-day operations and propose solutions that only scratch the surface. Conversely, front-line managers, while familiar with the details of operations, may lack the broader perspective needed to spark radical thinking, often leading to changes rather than systemic changes. , resulting in fine-tuning of current practices.
Successful change requires balance, a sweet spot of experience that identifies areas for improvement without succumbing to entrenched routines. This balance often exists in the middle layers of an organization. By leveraging the collective wisdom of middle managers and teams, companies can drive change with lasting impact.
Based on our research and experience, we identify three strategies that are critical to effective middle-out transformation.
hire great middle managers
Transforming a business requires a combination of creativity and ingenuity, traits that only the best managers possess. Mediocrity is not enough. It's the best people who can bring the insight and experience you need to spearhead change.
In the article introduced in harvard business reviewThis article, titled “Transformation that Works,” delves into the middle-out strategy adopted by Bob Bradway and his team at the $27 billion biopharmaceutical company Amgen. From the beginning of the transformation effort, senior leadership flooded the field with Amgen's best talent. For every initiative, his two mid-level leaders were hand-picked: a vice president-level “initiative leader” and a director-level “initiative liaison.” These leaders were fully committed to change without distractions. The selection process was rigorous and resembled a draft with the entire CEO team overseen by the chief transformation officer and chief human resources officer (CHRO). Qualified executives were required to rank among Amgen's most highly rated companies and demonstrate their ability to address the company's most pressing challenges.
Once the initiative leaders and liaisons were established, teams were meticulously assembled based on their abilities and expertise. Leaders emphasized the importance of assigning the best talent to each transformation initiative. This approach ensured that the team had the skills needed to drive meaningful change quickly.
The transformation effort at Amgen served as a platform to test and develop the next generation of leaders within the company. Many initiative leaders and liaisons have since moved into senior positions at Amgen, a testament to the success of this leadership development strategy.
Empowering the middle class to drive transformative change
In many large organizations, there is often talk of a “frozen middle,” where mid-level managers are described as lacking the inspiration and motivation to contribute to the company's progress. However, in our experience, very few middle managers truly fit this description. More commonly, this problem stems from a lack of involvement and authority. Senior leaders actively encourage middle managers to generate innovative ideas, provide appropriate support when middle managers propose significant changes, and provide guidance to middle managers who may be a source of resistance. Listening is essential.
A prime example of this approach can be seen in the transformation of bioMérieux, a French multinational biotechnology company. In 2020, the company's management made the strategic decision to integrate BioFire, a US-based diagnostic company acquired by bioMérieux in 2014. BioFire's PCR technology has played a pivotal role in providing rapid Covid-19 testing during the pandemic. Pierre Boulud, who would later be appointed CEO of bioMérieux, was tasked with overseeing this delayed integration. The success of this initiative proved instrumental in establishing bioMérieux as a world leader in medical diagnostics.
A key factor contributing to the successful merger of bioMérieux and Biofire was the skill of leadership in energizing middle management. The company hired high-potential middle managers from both his BioFire and bioMérieux companies in the US to spearhead the integration. Leadership empowers these mid-level managers by clearly defining the integration team's priorities, providing the necessary resources, and representing them, ensuring that both bioMérieux and BioFire's business and strategy authorized and authorized to make material changes. Additionally, BioFire's middle managers were encouraged to collaborate with their peers, leaders, and direct reports to openly discuss proposed changes and provide direct feedback to Lyon's senior leadership. This comprehensive approach facilitated the identification of potential areas of resistance and enabled effective mitigation planning.
Today, bioMérieux stands as a unified company with a single purpose: to make the world a healthier place. Through pioneering diagnostic solutions, the company helps clinicians improve patient care and industry to prevent contamination of food and medicine. Since 2019, bioMérieux's enterprise value has soared from less than $8 billion to more than $13 billion, significantly outpacing the global healthcare sector.
Reward bold action and results
Leaders express a desire for bold thinking, but are often rewarded with small adjustments instead. Successful transformation requires a fundamental rethinking of every aspect of your business to achieve breakthrough results. To achieve this, rewards must reinforce the need for this overall change.
Take T-Mobile's transformation, for example. Before 2013, T-Mobile struggled to compete with larger rivals, consistently ranking last in customer surveys compared to AT&T, Verizon, and Sprint. After his failed acquisition of T-Mobile by AT&T in 2011, John Legere became his CEO. He introduced the radical concept of 'customer focus', emphasizing the need to understand customer needs and prioritize business processes and services accordingly.
Management recognized the importance of the company's website as the primary point of contact with customers and identified it as a key area for improvement. At the time, his website at T-Mobile, like his competitors' websites, was complex and overwhelming, with numerous tabs leading to unrelated information. The cross-functional team tasked with revitalizing the website received ambitious but intentionally vague guidance from their leaders. Its guidance is summarized in the directive: “Do what it takes to shake up the world.” Leadership set no constraints and trusted the team to come up with the best solution.
The team defined three specific goals. 1) Enabling easy discovery, sales, and eServices. 2) Be simple and direct. 3) Fundamentally rethink the T-Mobile brand. Rather than suggesting small adjustments, they completely overhauled T-Mobile's online presence to make it easier for customers to navigate online and transact with their carrier.
The results were amazing. User satisfaction with the website skyrocketed, with the percentage of users who were “very satisfied” jumping from 10% to 50%. Website ease of use improved from approximately 22% to 57%, and shopping experience, which is critical to driving sales growth, improved by 50%.
Impressed by the team's bold thinking and results, management recognized the IT team's leadership role in this effort. This initiative was an important step toward realizing Legere's vision of making T-Mobile an “uncarrier.” By setting ambitious goals to “shake the world” and rewarding bold thinking, T-Mobile laid the foundation for successful transformation.
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It's time to redefine your approach to change. Instead of traditional top-down goals and bottom-up implementation models, leadership must adopt a middle-out approach. By harnessing the ingenuity and creativity of an organization's middle managers, companies can develop the innovative solutions needed to realize their full potential for change.
