The Second Chapter of Transformation: How to Finish the Journey

What does a CEO fighting for a turnaround do after running tangible cost cutting and other defensive measures? When the “easy” work is done—what next?

BCG’s Strategy Lab has looked closely at the discriminating differences between long-term successful and unsuccessful transformations by comparing companies in like industries and time periods.

It turns out that there are two common transformation trajectories:

  • Short-term recovery with long-term slow decline
  • Short-term recovery with long-term flourishing

The second path is far less common. What can a company do to follow it?

Companies that achieved long-lasting success went beyond the first chapter of transformation. The initial transformation addressed costs; chapter two focused more on growth and innovation.

In the second chapter, successful organizations deployed a new strategy, vision, or business model, which—through subsequent iterations of adaptive innovation—they continued to improved.