How CEOs Can Beat the Transformation Odds
Only one in four transformations creates lasting value, and CEOs improve the odds by starting from strength, changing leadership, investing for growth rather than just cutting cost, thinking long term and running a formal program.
Summary
A BCG global analysis finds only one in four transformations delivers enduring, value-creating change. Five truths improve the odds: start before performance breaks (2.7 points higher three-year TSR); leadership change helps (4.1 points over five years, more with outsiders); cost cuts alone fail, since investor expectations drive over 70% of first-year TSR outperformance against 13% for efficiency; a long-term orientation adds 12.5 points; and a formal program (5.9 points) with above-average restructuring investment (5.7) pays off. The lie is believing you are the exception.
Editor's opinion
Covers the same underlying BCG research as the more detailed 'Five Truths and One Lie' piece already rated in the tracker.
Key concepts
Five truths of transformation · One-in-four success rate · TSR attribution (expectations versus efficiency) · Long-term orientation · Formal transformation program