Influence Model – McKinsey’s Change Management Model

Influence Model, McKinsey’s change management model, is one in a long list of potential frameworks one can draw upon during a case interview. Of course, it’s also relevant if you are a young professional experiencing large-scale change at your employer. Or, if you are a seasoned professional tasked with designing or leading a corporate transformation. The influence model is a change management framework you can use to navigate the shifts in people, processes, and focus when an organization must begin to operate much differently than it has in the past.

Let’s discuss the model in a bit more detail from an academic or theoretical perspective. Then we’ll apply the model to an actual business situation. Finally, we will discuss why the model is useful and should be well understood.

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Influence Model Overview

It might be helpful to start by defining “organizational change”. There is an infinite range of examples where an organization experiencing substantial change requires leaders and employees to behave in new ways.

Imagine what happens when a company has decided to sell one or more business units and put all of its focus on a smaller number of remaining business units. Or, imagine a company has decided to acquire its major competitor. Finally, consider a brand that used to invest its entire marketing budget in traditional news, radio, and TV advertisements, manufacture its products in the U.S., and sell through brick and mortar retail outlets. But now, that brand has decided to build a digital marketing strategy and begin manufacturing overseas. In all these scenarios, the organization is going through change and must find ways to manage it as effectively as possible.

The building blocks of this change management model from McKinsey include:

  1. Fostering understanding and conviction
  2. Reinforcing changes through formal mechanisms
  3. Developing talent and skills
  4. Role modeling

The idea is that these four types of actions, which reinforce one another, will change employee mindsets and positively influence behavior when consistently taken together. These are the building blocks of the Influence Model. That is one reason it is also called an Influence Model for Change.

Building Blocks Of The Influence Model

  1. Fostering Understanding and Conviction

McKinsey’s research shows that people have a very difficult time performing any given task or behaving in a particular way. This is also true when the task is simple and easy, since this is when they do not understand “why” they are supposed to be acting differently. Furthermore, business leaders tend to dramatically overestimate their communication. The extent to which “the why” behind a new way of doing things is clear to the rest of the organization. What is obvious to them is not obvious to others.

The key then is to consistently communicate the rationale behind the new way of doing things. Develop a clear narrative for the change effort. Constantly ask questions and seek feedback to understand the extent to which people seem to be “buying into” the process.

  1. Reinforcing Changes Through Formal Mechanism

Leaders often don’t realize that, although they are undertaking a serious change effort, their incentive systems are still rewarding the “old way” of doing things. For example, imagine a company making a dramatic shift towards selling “services” instead of products. Yet, they still give its sales personnel revenue targets that don’t differentiate between products and services. If you want people to change their behavior, don’t reward A but hope for B.

  1. Developing Talent and Skills

If an organization wants its people to behave in a different way, it must recognize that its employees may need to build dramatically new skills. McKinsey quotes research that shows humans of all ages have a surprising capacity to learn new things and build new skills. But if a business is trying to penetrate an entirely new market, it must recognize the importance of first building the confidence and skills of its commercial team. It must take the time to train, teach, and develop its commercial talent.

  1. Role Modeling

Have you ever noticed that you might start using a new expression after your best friend adopts it? Or that you start signing emails a certain way to mimic your new boss? Unconsciously, people often copy others without realizing it. But they may also consciously align their actions with those of others to learn, improve, or just fit in. The insight here is that for change to be successful, it’s critical for leaders to be acting and communicating in ways that are aligned with the desired change. People will mimic them, whether they realize it or not.

Influence Model Example

Imagine you are sitting in a case interview and the interviewer asks you a very open-ended question. She says: “What can Amazon do to maximize the value of Whole Foods after the acquisition?” Now you could approach this open-ended question by getting into questions of price point, product mix, cost reduction, new delivery model options, etc. But you could also apply the McKinsey influence model.

You would want to note that this is really a change management question, and that’s how you are going to address it. If the organizational change isn’t managed effectively, execution will suffer, and financial performance will surely not meet expectations.

First, you could highlight the importance of ensuring everyone at Whole Foods and Amazon understand the “why” that was used to justify the acquisition. This will help them get comfortable with the new behaviors that will be required. Next, you could make sure that any key synergies that the acquisition was based on – i.e. people who use Amazon being encouraged to shop at Whole Foods – was explicitly incentivized. Someone at Amazon needs to have marketing Whole Foods baked specifically into their goals and objectives for the year.

People will need to be trained appropriately as well. Whole Foods employees will be asked many questions about the acquisition, including how to use the Amazon or Whole Foods apps to checkout, etc. Training will be key. Finally, how successful will the endeavor be if key Amazon or Whole Foods leaders are not “onboard” with the merger? It is remarkable how role models can influence lives and behaviors. You need to ensure individuals in key spots are functioning as role models.

Explain Influence Model to Your Team

The change management framework from McKinsey is useful to students and professionals alike. Maybe you are a student considering a career in management consulting? It’s an excellent back-pocket framework that allows you to analyze a situation without getting into any detailed math or analytics. If you are a professional experiencing or leading change, it’s one of the more intuitive change management models to help you better navigate the situation around you.

Final Thoughts on McKinsey’s Influence Model for Change

A quick search will reveal a long list of change management models, from Nudge Theory to 7S to ADKAR. McKinsey’s four-step influence model stands out for finding the right mix of simplicity and comprehensiveness. It is also particularly useful as a change management model in the context of driving organizational change vs. only changes in personal behavior.

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Filed Under: Consulting skills, management consulting, McKinsey Consulting