Have you seen an investor presentation in the last six months or so that didn’t include how the company is transforming the industry or themselves? “Transformation” is the new buzzword du jour. In reality when you look more closely, the story is less about a true transformation of the company’s strategy or business models and more about redefining who they are and what they do.
Success stories of true transformations are hard to find.
Transforming a company is a far greater task than simply reorganizing a company or just going digital. It’s about repositioning existing lines of business and exploring new business models for growth. It requires a vision of the future, an appetite for change, and the ability to take a longer view of success.
We tend to evaluate companies on a traditional set of metrics such as revenue, EBITDA, and market size. A better metric for companies that are transforming is the strength of the leadership and their ability to innovate and drive a new strategy.
Can a transformative leader rise from within? Yes, but in most cases transformational CEOs tend to be hired by Boards from the outside; often from outside the industry. Having proven leadership qualities and extensive experience, but not necessarily industry experience, can provide a fresh look at the business with no predetermined ideas.
A true transformative CEO and leadership team take the time to layout the vision and create an operational plan for success. They take time to work through the tough questions:
1. Is the vision viable?
2. How successful have they been at creating new business models, new products, and services in the past and do they have the talent and skills required?
3. How have they adjusted their sales and distribution models
4. What are the metrics and timeframe for measurable success that they need to achieve?
5. Is the culture evolving?
6. Is the change sustainable?
The most important role the CEOwill then play in the transformation is “chief storyteller, ” creating a powerful narrative that communicates the vision with relevant messages throughout all levels of the organization and constituencies.
It is not “one and done,” rather it is “often and ongoing.”