Summary of Preemptive Transformation

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Citing a Chinese adage that counsels “cure the disease that hasn’t happened yet,” This article makes a strong case for transforming your business when it’s still healthy. In addition to naming the success factors for any business transformation, the Boston Consulting Group’s Henderson Institute think tank offers six actionable steps for optimizing change efforts.

About the Authors

Martin ReevesLars FæsteFabien HassanHarshal Parikh, and Kevin Whitaker work for the Boston Consulting Group’s Henderson Institute think tank.

 

Summary

Swift organizational change can place firms ahead of the competition, and making changes pre-emptively counters a company’s susceptibility to sluggish growth and speedy failure. If your business isn’t ailing, you may hesitate to drive change. But a 2010–2014 of US organizational transformations showed that in most industries, pre-emptive change is faster, more dependable and more financially rewarding than reactive change. In the three years after a pre-emptive transformation, firms saw annualized total shareholder return (TSR) that was three percentage points higher than the TSR in firms that made reactive changes.

Researchers defined change as pre-...


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