What: A new agent-based model for simulating organisational change identifies four critical factors that determine transformation success: organisational hierarchy, social connections, change magnitude, and impact predictability.

Why it is important: With major retailers like Macy's, Saks, and El Corte Inglés implementing significant transformations, this framework provides crucial insights for increasing success rates through strategically designed change programs.

BCG's innovative approach to organisational change introduces a sophisticated agent-based model that simulates how companies adopt transformational initiatives. The research identifies four crucial contingencies that change programs must address: organizational structure, social networks within the firm, scale of change, and certainty about its impact. The model demonstrates that hierarchical organisations benefit from leadership-driven change cascading through levels, while flat structures require different approaches focused on peer influence. Social networks prove equally critical, with tightly knit organizations benefiting from champion-led change, while looser networks demand broader educational approaches. The scale of change, from incremental to fundamental, requires different motivational strategies, with smaller changes needing extrinsic motivation and larger ones requiring clear communication of benefits. The research emphasizes that change impact certainty significantly affects adoption rates, with unclear benefits often leading to implementation backsliding.

IADS Notes: Recent retail transformations validate BCG's findings throughout 2024-2025. In January 2025, Saks Global demonstrated successful hierarchical change by implementing AI-driven operations under new leadership. March 2025 saw El Corte Inglés leverage social networks through its Transformation Office, achieving significant progress in digital integration. By April 2025, Manor's CHF 200 million transformation showed how clear benefit communication drives adoption, achieving its highest operational profit in years. In June 2025, Bloomingdale's success with customer experience transformation highlighted the importance of measuring change impact through new metrics. Most recently, July 2025 saw Galeries Lafayette successfully implement a comprehensive leadership restructuring, demonstrating how family-owned retailers can balance tradition with modern management approaches.

From change management to change strategy