Defining Transformation: A Non-Negotiable for Long-Term Success

The concept of transformation in the context of organizational life is overused and misunderstood. It has become an oversaturated buzzword, propagated by blue-chip consultancies, IT systems providers, and other vendors, primarily to catalyze a differentiated business case for their services. In this commentary, I aim to reveal the true meaning and relevance of transformation and why it is a non-negotiable for long-term business success and sustainability.

What is Transformation?

At theo, we hold as a truism that the present profitability and performance of an organization was decided years earlier. Conversely, future success and sustainability is being decided today. The accelerated pace of change in our post-pandemic world—driven by increased competition, technological advancements, geopolitical events, demographic shifts, and economic pressures—has significantly shrunk the margin for error and increased the stakes for organizations of all sizes. CEOs and leaders can no longer afford to wait for the future to arrive. Instead, they must move towards it with boldness and intention, tending to the elements that create value today while moving their organizations forward.

In a business context, transformation is defined as a comprehensive and strategic change effort undertaken by an organization to fundamentally evolve its business model, purpose, and/or core identity. Transformation requires intentionality. Change and Disruption, frequently confused and misattributed to transformation, are inevitable realities of organizational life. Transformation is not inevitable. It only occurs through consistency and intentionality.

The Dual Role of the CEO in Transformation

To understand transformation in practical terms, we must first explore the dual roles of the CEO. A CEO leads two organizations: the one that operates profitably today and the one that must be built for the future. It is within this second role—the building of the organization of the future—that lies the amorphous work of transformation. This process is not a “greenfield” effort; it is the reinvention of the current organization to deliver the new one.

Transformation touches every aspect of an organization—its culture, talent, organizational design, strategy, and infrastructure. Each element must be recalibrated toward a compelling vision built upon a strong case for transformation. The role of the CEO is to guide this reinvention while ensuring that the present remains profitable and healthy.

A prime example of this is Jeff Bezos during his time at Amazon. While Bezos entrusted the daily operations of Amazon to capable individuals, he focused on building the future, notably through initiatives like Amazon Web Services (AWS). His ability to balance the organization of today with the pursuit of what could be next is a testament to how transformation is achieved. Bezos’ leadership in this regard enabled Amazon to move beyond being just an online marketplace to becoming a dominant player in cloud computing, securing even greater growth and sustainability.

As a CEO, the responsibility of transformation lies heavily on your shoulders. It’s centered on leading the organization of today while simultaneously building the organization of the future. This dual role requires a balance of maintaining stability and pushing for innovation. It’s about making informed decisions that are not confined by past experiences but are driven by a vision for the future. The role of the CEO is not just to manage but to inspire, setting a vision that is relevant and consistently inviting the entire organization to deliver it.

Why Transformation Matters

Successful transformation is grounded in intentionality and vision. Consider the well-publicized recent ascent of NVIDIA, which transitioned from a company known for manufacturing graphics cards to a leader in producing chips that enable artificial intelligence. This evolution was not merely a shift in product lines—it was a fundamental transformation of the company’s business model – which positioned the organization to capitalize on the broader trends of the marketplace.

On the other hand, Kodak is a primary example of a company that missed their window for transformation. The organization saw the signs of the oncoming wave of digital advancement and even invested in innovation efforts in digital film technology. Despite this, the company decided to focus efforts on proven value-creators rather than embracing the risk and opportunity of a different model. Ultimately, this proved to be a critical miss as their competitors had a different appetite for transformation.

As evidenced here, transformation is not a one-time event. It’s a continuous process of reinvention that affects every level of the organization. If companies fail to embrace transformation, they risk stagnation and obsolescence in a fast-moving world.

The Role of a Trusted Advisor in Transformation

As has been established, CEOs are responsible for both leading the organization of today and building the organization of the future. It is in the building of the future that a trusted Transformation Advisor has the greatest impact. Leveraging independent perspective, deep contextual knowledge, organizational experience, and proven methodology, a Transformation Advisor partners with CEO’s and those proximal to them to optimally navigate the complex and non-linear path of transformation.

At theo, this is our expertise—walking alongside client leaders to help them navigate the building of their future organizations. A theo advisor provides independent insight, often seeing things that others within the organization cannot, both in the present and in what is to come. When things are not going well, a CEO advisor helps steady the ship, marshal an agenda, and understand what’s really happening. But more importantly, when things are going well, the advisor’s role is to encourage the CEO to take calculated risks and seize opportunities.