“Our strategic plan was to sell more of what we had,” Baker says. 2. View All num of num Close (Esc) Anheuser-Busch. 0000067743 00000 n BUSINESS 06/16/2011 06:20 pm ET Updated Aug 16, 2011 10 Companies That Radically Transformed Their Businesses. A primary metric driving the organization is how much water is saved by its clients annually, which now stands at 188 billion gallons, against a 2030 target of 300 billion gallons. DBS was named among the top 20 companies globally that have pulled off a major transformation of their business, alongside Netflix, Amazon and Alibaba, in a study by strategy consulting firm Innosight. Now the strategy and innovation practice at Huron Consulting (NASDAQ: HURN), Innosight is based in Boston with offices in Singapore and Switzerland. Acuity is one of those U.S. companies regarded as best for work-life balance, according to Glassdoor data from July 1, 2019, to June 30, 2020. During round two, we used these comparative metrics to narrow the list to 27 finalist candidates, as voted on by a panel of Innosight partners: Scott D. Anthony, Rob Bell, and Alasdair Trotter. They leverage a core capability to enter new growth markets. Welch became GE's youngest-ever chairman and CEO and set about changing almost everything about how the company operated. It is capped. Companies must ensure that day-to-day operations don't falter when employees are called to adopt a new way of working. “We sold off five divisions and product lines including our oldest franchise, Quicken, which was the original business of the company. “Rather than the techno-optimism of the past, people are becoming increasingly cautious of technology,” the company announced. Krupp. • THE CRISIS: In 2012, Denmark’s largest energy company, founded as Danish Oil and Natural Gas, slid into a financial predicament as global overproduction sent gas prices plunging 90% over several years. The amount of additional effort that people can handle in addition to their current responsibilities needs to be an explicit consideration. Previously 80% owned by the Danish government, Orsted’s IPO in 2016 was one the year’s largest. Shifting focus from its legacy business in automotive parts and motors to seize growth in water technology through M&A. Leaders equipped to act in the face of uncertainty can build paths to growth that have not yet been imagined. “We have so many feature updates coming out that are really going to take this platform—that’s already amazing—to the next level,” says Clarke Levidiotis, digital content marketer. The leaders of the companies we’ve featured here have to varying degrees steered through different types of organizational crises. %PDF-1.4 %���� Evan I. Schwartz, a writer focused on innovation and leadership, is Innosight’s former Director of Storytelling. Transformed from a photography-centric firm to a healthcare products and medical imaging company. These smaller companies have made technological breakthroughs that may lead to much bigger achievements down the road. As the memo said, “We don’t and can’t compete on breadth with Comcast, Sky, Amazon, Apple, Microsoft, Sony, or Google. We began the process of identifying candidates for the Transformation 20 by screening companies in the S&P 500 and Forbes Global 2000 according to the following questions. In 2011, Ecolab had a $12 billion market cap when it acquired water technology company Nalco in an $8 billion deal. As a result, we’re now watching the work-from-home trend take off. Overwhelmingly, the biggest theme for growth, especially in core markets, is diving deeply into digital waters by harnessing new business models for the cloud, the Internet of Things, artificial intelligence and other technologies. This sense, that there is a higher purpose besides growth itself, is a common thread among the T20 companies. What happens when key stakeholders complain that new growth progress is too slow? 3. For much of its early life, Google had no business model to speak of. What do you call the crisis before all of this?”. When companies launch change initiatives, they often insufficiently consider the fact that their people are already busy. 0000000016 00000 n even tailoring the images they use for each show to match customer preferences), they have fundamentally changed the way that they make decisions about which shows to pursue based on the data they collect on viewing behavior. Thank you for watching this video. Mirroring Netflix’s subscription-based business model, for example, looked financially unattractive to Blockbuster Video, who made most of its money via charging late fees. For the third round, the Transformation 20 winners were selected by a panel of management experts (see the full methodology and list of judges below). 0000021132 00000 n “It’s the right thing to do,” Siemens chairman Jim Hagemann Snabe told Reuters. Innovation isn’t isolated to a department but is a strategic capability. Pursuing a digital transformation that would shift it from a pure hardware supplier to an energy management provider via an open IoT platform. With this set of criteria and such stories in mind, we present the T20 for 2019: Shifted from DVDs by mail into the leading streaming video content service and now a top original content provider. Design. This was not a small decision for Siemens, as electric power was a core business for 140 years and had generated $30 billion and employed 80,000 people. 0000007965 00000 n read update Article was updated Mar. A.O. Jun 2, 2020 - I’m resurrecting this site… Thank you for stopping by! 0000012273 00000 n Intuit transformed from a provider of products and services to an online ecosystem of financial services for small and medium enterprises (SMEs). The company began operating in 2006 in a highly competitive market. As of 2010, the company didn’t break out healthcare as a separate business, except for noting that its X-ray film technology has been a mainstay of the company since the 1930s. Southwest, not United. Traditional approaches to strategy and growth are insufficient to meet the challenge. More defaults and bankruptcies are expected to come, says a report from S&P Global Ratings, with retail liquidations speeding up. Protecting and healing the planet has also proved to be financially rewarding. 0000029142 00000 n Since inception, Alibaba has long positioned itself as an innovation powerhouse, having successfully transformed from an internet e-commerce and retail company to a technology business. However, when you win, you create not only an annuity but a new ecosystem that gives you the opportunity to grow in new areas for a long time to come.”. Disruptive change is accelerating, and companies today face more ambiguity than ever. Companies. Its original corporate objective, according to early annual reports, was simply to harness the Internet opportunity. What happens if key people feel like they don’t belong anymore? Disapproves of CEO. Transforming from a traditional regional bank to a global digital platform company, around a cultural vision of a “27,000-person startup.” In 2018, crowned “Best Bank in the World.”. In 2019, the company refined its mission once again, in response to the growing global backlash against technology’s dominance in our lives, boiling it down to: tech for social good. 1. A caterpillar becoming a butterfly.”. function gtag(){dataLayer.push(arguments);} In our annual Global Top 100 report, issued in May 2020, we recognised that the reference point of 31 March 2020 fell in the midst of an upheaval in the global equity markets caused by the COVID-19 pandemic. Ecolab has created new digital platforms for water analytics and distribution. Doesn't Recommend. These new global tech powerhouse companies are building new business ecosystem, and in the process turning China into a culture where transformation is part of the DNA of a growing number of companies. They seize the digital opportunity via new platforms and business models. NEWS CORONAVIRUS POLITICS 2020 ELECTIONS ENTERTAINMENT LIFE PERSONAL VIDEO SHOPPING. Here’s Fortune's look at 50 companies that do well by doing good. While four companies from then—Adobe, Amazon, Netflix, and Microsoft—have also scored near the top of the new list, several firms have dropped off, due either to their transformation momentum fading or, more commonly, having those efforts play out successfully. Amazon has also built an entire ecosystem of products and services enabled by its Prime membership. Decal Design .. Thyssen. Weighing the options, a number of top executives have elected to continue allowing their employees to work from home. These finalist companies advanced into the third round of the analysis but fell short in the judge’s ratings to make the T20. Retail bankruptcies hit an all-time high in the first quarter of 2018, even more than last year according to Business Insider. Intuit founder and executive committee chairman Scott Cook explains it this way: “We stopped doing a bunch of things on the theory of ‘do less better. Jobs; Companies; Salaries; Interviews; Search. By late 2018, DBS demonstrated that digital customers are at least twice as profitable as traditional customers. Lead turning into gold. b.src = "https://snap.licdn.com/li.lms-analytics/insight.min.js"; Others, like Danone (a previous T10 company, for its shift to becoming a nutritionfocused firm), have executed long-running transformations that haven’t yielded new levels of change in recent years. 0000002260 00000 n thought it would be fun to give out an award of our own, to companies wit hthe best leadership and change management strategies, who successfully went through a transformation or a change process, only to prevail. But the wider reason may be that awareness of transformation itself seems to be widening, with more and more companies recognizing the urgency of the challenge as well as what a profound shift these efforts represent. We are a growth strategy consulting firm for leaders who aim to design and create the future. Moved from a state-owned oil and gas exploration and production company to stage a 2016 IPO as the largest offshore wind farm company in the world. 0000028771 00000 n 0000108159 00000 n That caused us to step back to consider what prevents most companies from making the decision to transform in the first place. We’d call this the Crisis of Complacency. We’d like to acknowledge and thank our list of judges and congratulate the T20 winners. The transformation began by talking to customers, Baker says. This was accomplished largely by shifting its culture away from one of competition, where managers were told to rank the value of each employee from 1 to 5. The lessons are counter-intuitive yet clear: This places companies in the prison of the present, where they perpetuate the past versus creating the future. JOSH SANBURN TIME.com. In a comparable way, other organizations on the list have transformed by embracing a purpose-driven mission of making people healthier and preventing illness. ��'F5mw�m�Ȳ�!Gp�v+���Ihh��X��4iUt�%â�� ���0��;*|@|�?����yL_��X$��2Ꙙ�ݔ�ސ�g R t���a0ȷ@| � ��v� window._linkedin_data_partner_ids.push(_linkedin_partner_id); xref Innosight authors argue the value in dual transformation. 0000029433 00000 n 2019 was a watershed year for mixed reality in concerts, and the tech is by no means going away in 2020. In 2013, CEO Reed Hastings released an 11-page memo to employees and investors detailing a mission to move from just distributing content digitally to become a producer of original content that could win Emmys and Oscars. The company also developed and marketed pharmaceutical drugs using existing chemical compounds. For each company, we created a one-page judging profile. His famous straight-talking, down-to-earth style cut a swathe through GE’s bureaucratic inertia and planning regime, according to Jacked Up by Bill Lane. “We had resistance to change within the core organization,” says Ecolab CEO Douglas Baker Jr. “They didn’t like the idea of not being the biggest anymore. Consider the case of Ørsted, the Copenhagen-based energy company which, at #7, is the highest ranked European firm on the list. Tue., March 17, 2020 timer 3 min. Company Overview FAQ. Chair, Singapore Economic Development Board, Chief Strategy Officer, Expeditors (Seattle). In 2014, Siemens announced Vision 2020, which detailed an organizational overhaul, restructuring, and strategic shift from energy and industrial manufacturing to digitalization. x�b```�W�L? var b = document.createElement("script"); We are the growth strategy consulting firm co-founded in 2000 by Harvard Business School Professor Clay Christensen and business leader Mark W. Johnson. While every transformation story is different and yields valuable leadership lessons, this one happened to be triggered by an industry crisis. 0000005147 00000 n It is a liquid becoming a gas. 0000067275 00000 n Our approach to innovation consulting is collaborative, and our clients tell us we change the way they think about and see the world, enabling them to do things they could never do before. AIA Group’s transformation has taken the Hong Kong-based life insurance company into a new global growth area, with its digital Vitality platform  providing wellness and prevention knowledge, tools, and motivation to AIA members, leading to a business representing 10% of total revenue and growing at an 85% rate last year. 0000042880 00000 n b.type = "text/javascript";b.async = true; In a similar way, Ørsted exited its historic fossil fuel business, divesting eight of its 12 divisions, to embark on offshore wind farming, part of its mission to become the world’s greenest energy company. Sometimes it’s a financial crisis, sometimes it’s the threat from a disruptive competitor, sometimes growth just hits a wall, sometimes it’s the opportunity to ride a global megatrend, and sometimes it’s simply the result of systematic planning for the future. This report ranks the Global Top 100 public companies by market capitalisation as at June 2020. "Company going through major changes" 3.0 ★ ★ ★ ★ ★ Work/Life Balance ★ ★ ★ ★ ★ Culture & Values ★ ★ ★ ★ ★ Career Opportunities ★ ★ ★ ★ ★ Compensation and Benefits ★ ★ ★ ★ ★ Senior Management ★ ★ ★ ★ ★ Former Employee - Director in New York, NY. The most notable of those firms is Apple, which underwent one of the most successful transformations in business history but is now focused on executing its existing strategy rather than aggressively enter new growth areas. These cultural traits of curiosity and customer obsession are hallmarks of innovative organizations, and it’s precisely this behavior that helps a large organization pivot to a growth mindset. Add a Review. Net Profits have surged more than $3 billion since 2013, and Orsted is now the world’s largest offshore wind company, with a 30% share of a booming global market. Jun 2, 2020 - I’m resurrecting this site… Thank you for stopping by! REPOSITIONING THE CORE: How effectively has the company adapted its traditional core to changes or disruptions in its markets, thus giving its legacy business new life. 0000076546 00000 n Amazon initiated “Amazon Web Services” (Cloud) to overcome the cost of infrastructure required to conduct operations. And they weren’t alone. 4. 0000032562 00000 n H�lWI�-� �^^� ���F���w��Y0j�*"5P$Š~��_�+�A��jU�,�!w����D���/��]�������Ǐ��/�Υ�+��v�Zb��O�N9�$�O�#�خ���۟>���o���������������۟���?'��G��?�p���O �_?�gs5Yj���j�ޒ��|Iw�q3� �t2�%q�?��������ؒ4�=j��p��o�WK�.-s6��֌��� 9�EXZR\R.wT� �_ʨIgD��{��0�$���j3���M�슛�]���ܴIV��5`F�1���[�. 130 Benefits. AIA Group transformed from a health insurance provider into a collaborator with consumers by creating AIA Vitality — a major wellness and prevention business. Neutral Outlook. Ecolab’s market value now stands at $58 billion, placing it among America’s 100 most valuable firms. At Microsoft, CEO Satya Nadella has built a different kind of culture of innovation, less technological and more customer-focused, than the company led by his predecessors. This growth helped Tencent become the first Asian company to surpass $500 billion in market valuation. Thyssen and Krupp - companies going through change. This helped infuse a sense of purpose into the organization that drove it to cut the cost of offshore wind power by 60% while building three major new ocean-based wind farms in the U.K. and acquiring a leading company in the U.S. to pioneer North American offshore waters (see video).

gtag('config', 'UA-3783711-1'); Contact Us “So we can measure how much value we’re getting out of this approach.” Some powerful results: In 2019, DBS became the first bank to simultaneously hold the titles “Bank of the Year” (The Banker), “Best Bank in the World” (Global Finance), and “World’s Best Bank” (Euromoney). s.parentNode.insertBefore(b, s);})(); See how six companies changed their business models to become the large companies they are today. China’s AIA Group has moved beyond insurance to become a wellness company, whereas Dutch electronics giant Philips has largely divested its legacy lighting business to focus on healthcare technology. Edition. Starbucks, not 7-Eleven. 2. 28 Photos. @(�����q.$ �F�r�0T2�X�P������e2�DFӄ��sD5���2wTZ0C��AS��y�_Ot�%��pU��ʐ�Xumӓ�+�6M��:�i�b�(�}�� ���L}�6o�� J^�?��8cyn!�ok/�|Y���1iq�Й�pg�۫�|� ��4��Щe�P�j�q޶�)��0���߲Yaꅳ�v ��vӞ-�c�L��D�Y�ɺ����P��Y�����˶e�vL�,�!ع|�+_ [�hi��g��M_������sV�D��܎��x�ɺ��϶V�4V�1�Yߚr���0�Cp��Hs��}՛�U�m�x�[;��BA�����i@�����@`�j&%��F�w@�,�PQ��� �:\0�G ��0ᴴt�&ְ�4� �0�A���l@%�&�w`�t�16M%p��*c00v��0����A�8SΌ 18@�J�2��~Ҳ@l�F����� Cisco has cultivated customer relationships to find smart niches for new value-added digital subscription services. Our team rated each company using a set of criteria measuring their financials (notably revenue growth and stock performance), the degree to which they had built meaningful new growth businesses, and the degree to which they had repositioned their core business. By looking more deeply into these strategic transformations and analyzing the tough decisions made by the leaders of our T20 companies, we saw five deeply-ingrained behaviors that can be distilled into a set of takeaway lessons for leaders who are embarking on their own transformation journey: Leaders embarking on transformation often come up against active opposition from those in the organization who are not comfortable with change, as well as the sheer inertia of the way things have been done in the past. The year 2020 has been one of losses—around the world, and in the United States in particular. endstream endobj 197 0 obj <> endobj 198 0 obj <> endobj 199 0 obj <>/ColorSpace<>/Font<>/ProcSet[/PDF/Text/ImageC]/Properties<>/ExtGState<>>> endobj 200 0 obj [/ICCBased 219 0 R] endobj 201 0 obj <> endobj 202 0 obj <>stream trailer China’s Ping An leveraged its know-how and industry relationships as a traditional health insurance company to launch an online healthcare ecosystem platform called Good Doctor. The shift from traditional sick care business models to preventative care and wellness has proven to be especially powerful for galvanizing organizations. The United Arab Emirates’ du Telecom provides mobile and fixed telephony, broadband connectivity, and IPTV to consumers and businesses. 0000010653 00000 n “It’s necessary and courageous to trigger the planned changes when the company is doing well.” The spinoff gives Siemens the resources for investing in its Digital Industries (DI) and Smart Infrastructure (SI) divisions as the core of the new Siemens. Traditional approaches to strategy and growth are insufficient to meet the challenge. 18, 2020 A growing number of companies are either shutting down or drastically reducing hours and … AWS has turned into a surprisingly lucrative profit engine. We’re in the future business. Crisis of Identity: when the organization realizes “If we’re not a [fill in the blank] company anymore, what are we? The #1 company, Netflix, is another case in point. 0 Article by Starr Schrenker. The same customers who were buying its core products were also voicing concerns about access to clean water. For DBS Bank, the transformation has been along many dimensions, from a national bank to a regional and global bank, and from traditional banking services to new kinds of fintech business models. Robert D. Bell is a partner at Innosight based in Boston and a leader of its Industrial & Technology Practice. “It’s all about water,” the company says, and that focus required jettisoning parts of its past that didn’t fit that mission. And the company is only getting bigger. The advantage of incumbency paid off, as Good Doctor signed up over 3,000 hospitals, 1,000 health clinics, 500 dental clinics and 7,5000 pharmacies. 0000037757 00000 n Four of the firms—Ørsted, Ecolab, Neste, and A.O. 0000020529 00000 n The combined company is now one of the world’s leading suppliers of hardware and software that helps manufacturers and service firms become more efficient users of water. Microsoft and Adobe have nearly completely phased out its once lucrative packaged software businesses to focus on subscription services for the cloud. Crisis of Conflict: when different parts of the organization fight for scarce capital resources as new growth areas receive a disproportionate share of investment relative to their current size. Currently, 18% of Fujifilm’s $22 billion in revenue comes from healthcare. However, the vast majority of leadership teams never encounter these three crises. For instance, Italian energy giant Enel only began in 2017 to embark on its strategy for smart homes and sustainability services. The Transformation 20 indeed shows the powerful payoff that comes when leaders steer their organization through these crises to imagine and build a bold new future. From this second-round list, an Innosight partner panel voted to narrow it down to 27 finalists. 0000002016 00000 n As outlined in Dual Transformation (see graphic below), there are three flash points that happen as an organization change effort is proceeding successfully but can derail the entire plan: 1. We then sent that presentation of profiles along with instructions out to our panel of judges, who scored each company on a scale of 1 to 5, with 5 being the best example of a successful strategic transformation. We looked at the mandate to combat climate change, and we became one of the few companies to wholeheartedly make this profound decision, to be one of the first to go from black to green energy.”, • ADAPTING THE CORE: In an interview, Poulsen emphasized both the short-term and long-term nature of the change. Jeff Bezos of Amazon.com has famously led the organization to obsess over the customer, rather than competitors, leading to the Internet retail to take its internal cloud technology to customers. As a chief technology officer we met with recently asked us: “We basically aren’t at any of these stages yet. Nadella came up through the organization by growing its Azure cloud business by asking questions about customer needs. So we had to deal with all this unintended emotional stuff.”. NEW GROWTH: How successful has the company been at creating new products, services, new markets, and new business models? As of 2005, shortly after its IPO, Tencent defined its purpose in terms of “implementing our Online Lifestyle strategy, which strives to cater to the basic needs of our users.”. 0000000936 00000 n “2020 marks an evolution of what the companies have been doing really for the better part of the last ... retail and hospitality that have experimented with managing their workers through a digital app so that they can escape their employer obligations,” Chen said. Smith completely exited its historic core of auto parts & motors to concentrate its investments on innovating its commercial and residential water heaters as well as entering the global water treatment market. Tencent Holdings began as an online chat and video game provider catering to the new generation of digital natives in China. By 2020 the current role of the pharmaceutical industry’s sales and marketing workforce will be replaced by a new model as the industry shifts from a mass-market to a target-market approach to increase revenue. 515 Jobs. McKinsey announces one of our biggest commitments: the Institute for Black Economic Mobility. IBM turned 100 today, the rare company … As a chief technology officer we met with recently asked us: “We basically aren’t at any of these stages yet. Most of the transformations on our list started at least five years ago. During its time as a private company, Dell shifted from being a hardware company to being a cloud business integrating EMC’s storage management, tripling its value from 2013. In a similar way, Schneider Electric leveraged its ability to create tech platforms to move into creating an Internet of Things data analytics business for energy management. Once upon a time, Fujifilm Holdings was in the judge ’ Ratings. 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