Leading Transformation for the Future

What Is Transformation for the Future?

What separates long-standing brands, the ones that feel like they’ve been around forever, from those that burst onto the scene, then seem to disappear overnight? And what makes a company thrive in the good times, yet continue to evolve even against the backdrop of economic or social uncertainty?

One answer is the effective “future-proofing” of your organization, and in this article we’ll explore that through leading transformation for the future.

This means securing your organization’s long-term viability and relevance by balancing short-term pressures with long-term strategic planning, embracing uncertainty, and staying ahead of regulatory or societal shifts.

What Does Leading Transformation for the Future Look Like?

We can explore a powerful real-world example of successful transformation for the future in food and drink giant, PepsiCo.

Between 2006 and 2018, then CEO Indra Nooyi developed her "Performance With Purpose" (PwP) program, with the aim of focusing on long-term sustainability and to make environmental and human wellbeing goals equal with financial goals. [1]

To do this, Nooyi focused on four key elements of sustainability:

1. Human. This part of the initiative concerned sourcing higher quality ingredients and making the product healthier overall. Healthier options sales went from generating 38 percent of revenue to 50 percent between 2006 and 2017.
2. Environmental. The firm committed to sustainability goals around packaging and carbon emissions, and water usage was reduced by 25 percent by 2018.
3. Talent. This was a drive to increase internal and external equity by uplifting women and families. By 2018, women occupied 39 percent of senior management posts.
4. Financial. These and other initiatives saw revenue growth of 80 percent and a big increase in PepsiCo’s stock performance.

How did Nooyi effect these changes? First, she got her board and senior leadership teams on-side with her plans. She was able to convince them that it was a project worth pursuing after tasking them to identify trends and changing attitudes toward health, resource scarcity, consumer activism, and talent shortages.

Nooyi also took bold steps in the early stages by bringing outside expertise and fresh thinking into senior positions. Experts in nutrition and biology from outside the food and beverage industry were given the tools and influence to make real change in the firm’s product range.

PepsiCo’s purpose-driven strategy included making allowances for local adaptability. Leaders allowed each market to customize its approach to fit regional needs. For example, in water-scarce Mexico, the firm invested in advanced facilities to recycle 65 percent of the water it used.

How to Lead for Longevity and Transformation

Building for the long term requires a proactive strategy that balances short-term priorities with future needs. This can be hard to achieve when taking into account multiple stakeholder viewpoints and unpredictable global markets. Here are four skills to develop to strengthen yourself as a leader, and your business as a whole.

1. Systems thinking

This refers to the ability to see the “interconnectedness of things.” In other words, viewing your organization as part of a connected ecosystem of internal operations and external factors. Understanding and mapping these internal and external interdependencies can improve your decision making as a senior leader and improve collaboration with external partners and stakeholders.

We can look at another real-world success story by examining how systems thinking enabled a U.S.-based utility company, Green Mountain Power (GMP), to become the first such firm in the world to be awarded B Corp certification for its high environmental, social and transparency standards. [2]

• Green Mountain Power employed systems thinking by embedding sustainability into its core business of generating, storing and distributing electricity. It was able to do this by correctly predicting, and leaning into, external trends like decarbonization and regulatory changes.
• The company actively pursued collaborative projects with stakeholders, including community partners and external innovators, to take advantage of emerging opportunities in the power sector. For example, it was one of the first utility companies to offer Tesla’s solar-powered Powerwall home battery systems.
• This holistic, long-term approach positioned GMP as an industry leader in renewable energy, strengthened customer trust, and ensured resilience in a future shaped by environmental challenges and shifting regulatory landscapes.

2. Adaptability

Adaptability means having the ability to change your approach or plans when conditions or your working environment change. It’s how you manage when you start something, but then things don’t go to plan.

In leading for transformation, that can mean reframing your vision to win over doubters or attract new allies. It can even mean taking brave steps such as replacing or reassigning people who steadfastly oppose or block transformation, and bringing in new people who share your values.

And it can be perilous to your business not to be adaptable, or to be the one who resists innovation and refuses to compromise, despite clear evidence in favor of it.

A 2022 study brought to life a lesson from history about how a dominant and unbending CEO brought a successful Japanese company, Kanebo, to the verge of ruin.

When an historic textiles company, Kanebo, was undergoing post-war restructuring, Itoji Muto took over from his father as CEO.

At this time, use of synthetic materials was on the rise and new textile technologies were emerging, but Muto refused to diversify from natural fibers.

Muto was so entrenched in his view that he expelled senior leaders and board members who opposed him and even fired the technical experts who understood the advances in chemical research. He also banned further research and development.

Too late, he tried to pivot toward synthetic materials, again mismanaging his senior team, and the venture failed. The company was saved when new leadership ended all textile production and moved into cosmetics.

3. Collaborative leadership

It can be easy for CEOs to see their board as something to satisfy, or manage, or report to. Whilst this is part of the relationship, it can be a helpful perspective shift to view the board as a valuable entity consisting of collaborators and confidants.

Much has been written about dictatorial leadership and the pitfalls that often ensue. If you can consult with your leadership team regularly over the many complex challenges you face, your overall strength as an organization will improve.

Some traits to consider when integrating collaborative leadership are:

• Frequent, informal interactions with board members, rather than infrequent, board-wide meetings.
• Transparent and open dialogue, rather than “need to know” policies.
• Build relationships with board members as equals, rather than trying to be seen as the boss.
• Request and take note of feedback regularly, rather than rely on large-scale, infrequent reviews.
• Invite external coaches, rather than trying to facilitate all discussion internally with no mediation.

There is, of course, a time for faster-paced, less democratic decision-making, but if you apply this as the exception rather than the rule, you’ll be on course for creating a future-ready culture.

For example, at PepsiCo, CEO Indra Nooyi’s PwP program succeeded because she kept her senior leaders involved and made them part of the process. They were convinced the company’s transformation plan was right for its future after being tasked to identify “megatrends” such as demographic shifts, climate change, changing consumer health priorities and activism and seeing form themselves how these would impact the company.

3 Strategies for Leading Transformation for the Future

We’ve explored some of the facets of leadership mindset and company culture required for delivering transformation for the future, but what practical strategies can you adopt to make it a success? Here are three ways:

1. Embrace Curiosity, Foresight and Innovation

One of the most limiting phrases commonly heard in workplaces is, "But this is the way we’ve always done it." Businesses that wish to remain fit and relevant for the future need to let go of outdated ideas and processes.

Leading transformation for the future requires curiosity, identifying and managing risks and opportunities, and having the strategic agility to adapt to anticipated trends and challenges.

A lot of this falls under the umbrella of “horizon scanning,” and you can read more detail about this in our article, Horizon Scanning in Leading Transformation. And to explore more ways to encourage innovation, see our article, Doblin’s 10 Types of Innovation.

2. Balance the Present and Future Priorities

It can be easy or tempting for companies to focus on short-term profitability, rather than look at the bigger picture of a sustainable future. But neither can leaders ignore their existing and ongoing operations and priorities.

Here are some ways to balance these two priorities:

• Consider establishing a dual-focused leadership structure that allocates resources to both current operations and future goals.
• Create and embed metrics for dual objectives. For example, you could write KPIs that track short-term success (e.g. revenue) and long-term progress (e.g. sustainability goals or innovation adoption).
• Encourage continuous learning and adaptability. For example, encourage the board and senior leaders to update governance models on new trends and technologies. Again, this means continuing with horizon scanning, not treating it as a one-off exercise.

3. Engage External Stakeholders and Partners

A successful transformation requires leaders to find and bring in new capabilities, such as new staff members, new collaborations, new resources, and external perspectives.

The case studies we’ve highlighted, above, provide good examples of this. On its route to sustainability, GMP leaders partnered with multiple utility organizations, tech companies, and local contractors to develop innovative products and solutions together rather than compete with them.

For instance, they developed an affordable energy efficiency package together with one of the competitors. Such collaborations propelled the transformation forward and provided long-term security for GMP through cheaper rates and less risk of customers leaving the grid for another provider.

And to reinforce its commitment to sustainability, PepsiCo’s leadership recruited external experts to several key new roles at multiple levels, including chief scientific officer and chief design officer. This demonstrated a strong focus on innovation, enriched the company’s expertise, and fostered a broad diversity of thought across the organization.

Frequently Asked Questions

What is the key focus of transformation for the future?

Transformation for the future focuses on long-term resilience and relevance by aligning strategies with societal, technological and environmental trends rather than immediate growth.

How does transformation for the "future" differ from transformation for "growth"?

While transformation for growth maximizes current potential (e.g., scaling operations), transformation for the future ensures adaptability to future challenges and opportunities.

What skills and behaviors are essential for leaders in transformation for the future?

Key skills include strategic foresight, adaptability, systems thinking, and collaboration. Leaders must also embrace innovation and engage with stakeholders effectively.

How can leaders prepare their organizations for transformation for the future?

Leaders should conduct horizon scanning, embed sustainability into strategy, foster a culture of continuous learning, and align operational goals with long-term systemic changes.