Uber. Netflix. Amazon. These are just a few of the companies with a successful business model that would have been impossible just a few decades earlier. Technology has created new opportunities that have fundamentally changed not just how we do business but also how we live our personal lives—from transportation to entertainment to shopping and everything in between.
The team at Innosight recently released a study of the world’s most transformative companies, many of which play a key role in the innovations outlined above. The report, which aimed to “identify the global companies that have achieved the highest-impact business transformations over the past decade,” screened all of the organizations in the S&P 500 and Global 2000 against the following criteria:
- New growth: The team analyzed how successful each organization was at creating new products, services, markets, and business models, and also the percentage of revenue outside the core business that could be attributed to these new growth areas.
- Repositioning the core: How did each organization adapt is traditional core business in response to changes in the market?
- Financials: Has the company posted strong results or turned around the business based on its ability to embrace change?
Based on this research, Innosight identified 52 organizations making substantial progress towards transformation and narrowed the list to 20 after additional vetting. Not surprisingly, Netflix and Amazon were high on the list, but numerous established technology providers with decades of experience in the industry also made the cut, including Adobe, Cisco, and Dell.
So, what can we learn from these transformative organizations? According to the researchers, a few key themes emerged among their stories:
- Purpose-driven mission: Netflix is a prime example given the company’s successful transformation from a digital content distributor to a producer of original—and critically acclaimed—content. Dutch electronics company Philips, number 20 on the list, offers another example, having largely divested its legacy lighting business in favor of healthcare technology.
- Resilience: As the authors of the Innosight study note, “Such transformations are never easy.” Companies typically must make some difficult decisions, be they divesting part of the business like Philips, rebuilding a core business while simultaneously finding new areas for sustainable growth like Ørsted, number 7 on the list, or moving away from focusing solely on shareholder value, like number 13 Siemens. Whatever the circumstances, companies and their executives must be resilient and focused on the mission in order to overcome the numerous obstacles that will invariably arise.
As the authors note, “In an era of relentless change, a company survives and thrives based not on its size or performance at any given time but on its ability to reposition itself to create a new future and to leverage a purpose-driven mission to that end.”
For more on the Innosight study and what lessons you can apply to your own transformation initiatives, read more in this HBR article.