Most companies are grappling with tremendous uncertainty,
being hit by all kinds of changes.
It can be digitalization,
new upstarts, trade war, changes in supply chain,
changes in talent.
There's a need to transform
and we see that a lot of transformations fail.
We have, in BCG,
been doing hundreds of transformations.
We've tried to put together three, four, five factors,
that if you do those things right,
your chances of succeeding with transformation
dramatically goes up.
What increases the odds of a transformation's success
is number one,
that you have a good balance
between short-term and long-term.
Take out cost.
Improve operations
to be able to put cash to the bottom line.
Get the momentum.
But then you also need to have a long-term orientation.
Invest in R&D,
digital new business models.
Secondly,
you need to have a comprehensive program
to execute fast enough,
disciplined enough.
The third point is
you need to actually communicate with investors.
In a way, we see that most transformations,
they have a very short-term effect in the stock market.
So you need to be able to tell the story
and also communicate it.
Another thing that's interesting is
new CEOs do better.
And I think what that means for incumbent management teams
is that you cannot afford to be complacent.
You have to address the transformations head-on,
constantly be paranoid.
And that also links to the point that we can see
that the earlier you start a transformation,
the higher the chance of success,
and also the cheaper it is,
the less you need to restructure
to get to the new future.