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Start a transformation with a big goal

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In 2000, Julio Linares became CEO of Spain’s dominant telecom company, Telefónica de España. With the com­pany’s earnings and cash flow in a deep dive, he knew he needed to implement changes immediately.

For starters, he clearly stated his goal for the company’s transformation: to gain 1 million ADSL [asymmetric digital subscriber line] subscribers in three years. Everyone understood the objective, and it was easy to track in real time.

“If the objective is clear, then everybody has a very good view of the progress made against it,” he says.

He sought to educate employees on how their daily job responsibilities could advance the company toward his goal. Once they saw the connection between their tasks and the larger impact on the organization, they felt more motivated to succeed.

He met with his top 500 managers every January to discuss how they’d execute the transformation for the coming year. Together, they designed the program and hashed out the details.

From that point, Linares invited a broader swath of employees at different levels to chime in. They gave input on how they could contribute to the planned changes, suggested ways to improve communication throughout the organization and tweaked the design of the change initiative.

To keep employees engaged during the year, Linares tracked progress frequently and evaluated teams based on their effort and results. His sustained interest in the change program indicated to everyone that he treated it seriously.

— Adapted from “Organizational health: The ultimate competitive advantage,” Scott Keller and Colin Price, www.mckinsey.com.

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