Leading Transformation for Growth

What Is Transformation for Growth?

Business leaders looking to transform their organizations will likely reach a point where they face contrasting challenges and priorities.

Common among these is balancing short-term pressures, such as driving revenue and exploring new markets, with securing the organization’s long-term survival by understanding how it may need to adapt to meet challenges that are on or just over the horizon.

We are calling these two approaches Transformation for Growth, which covers the immediate or short-term transformation, and Transformation for the Future, which looks at the longer-term.

This article explores Transformation for Growth. This focuses on maximizing an organization's current potential by expanding capabilities, scaling operations, entering new markets, and launching new products. It is driven by clear metrics such as revenue, market share, and customer base growth, emphasizing immediate gains and competitive advantage in existing and adjacent markets.

What Does Transformation for Growth Look Like?

Transforming an organization for rapid growth is fundamentally about a mindset of opportunity-spotting, decision-making, and a keen focus on results. Generally speaking, this is not a time for philosophical navel-gazing (important as this can be). Instead, it is about achieving growth quickly, optimizing for it and moving on it intentionally.

But any growth plan should be approached strategically. Danish toy manufacturer, Lego, offers a great example of this. [1]

After more than 60 years of growth since its founding in 1932, the family-run firm began to stagnate and in 1998 it posted its first annual loss, $48 million. Within a few years, despite various attempts at diversifying from its core building blocks product, losses grew to $285M.

By this time, the firm had appointed Jørgen Vig Knudstorp as CEO, the first person to take overall control from outside the founding Kristiansen family. Knudstorp launched a bold transformation strategy. Under his stewardship, Lego:

• sold loss-making parts of the business, such as theme parks and video games.
• halved the number of unique Lego blocks to 6,500.
• reinforced the firm’s core identity of bricks and building systems.
• collaborated with outside companies, allowing them to use the Lego brand for other products, such as movies.
• invited its huge global fanbase to develop new ideas and products.
• pledged itself to new goals around inclusivity and environmental sustainability.

The results were impressive. By 2013, Lego enjoyed $4.5 billion of revenues and $1.5B in profits and was the world’s largest toy maker.

How to Lead for Growth

Here are some key skills and behaviors to adopt during transformation for growth.

1. Visionary Thinking

“Vision” conjures up imagery of long-term strategy and philosophical debates about the future, but it can be applied to the immediate situation as well.

For example, you may plan to double your workforce over the next five years, but who is your next hire? What operational systems need updating now to support this? Is there any training that must take place to equip your current team for expansion? Visionary thinking is not reserved for the long-term. There may be opportunities you can seize today in order to start the ball rolling for the future.

2. Bold Decision-Making

Personal development evangelist Jim Rohn said, “Indecision is the greatest thief of opportunity.”

Consider the idea that nothing really happens without a decision being made. But not all decisions are made equal. Some decisions are reactive, having been forced by an external hand, where other decisions may be made out of fear.

When optimizing for short-term growth, it’s important to act decisively on the current opportunities you see before you. Risk-management is a part of this as we do not wish to act recklessly. But what we are looking for here is a balance of courage, creativity, speed, and care. This is what goes into bold “big bet” decision-making that transforms companies and accelerates growth.

3. Resource allocation and alignment

Having bold short-term growth goals is broadly a positive aspiration, but strategic leaders should ensure that they can deliver that growth. Your organizational capacity should match your growth goals.

Successful transformation requires leaders to find and bring in new capabilities: for example, new staff, new collaborations, new or reassigned resources, and external perspectives and ideas.

For example, during a period of significant transformation in the 2010s, global food and drink giant PepsiCo poured resources into its R&D team as it looked to create healthier brands and products.

The firm invested in experts in nutrition, biology, computer modeling, water conservation, and personal care. This broadening of the R&D team’s skill and culture helped PepsiCo to achieve considerable revenue growth. [2]

PepsiCo’s transformation can be seen as an effective example of senior leaders successfully navigating the demands of immediate operational need and long-term sustainability goals. In other words, transformation for growth and transformation for the future.

4. Team Empowerment and Motivation

The way you communicate with, coach, support, and nurture your people is crucial to the success of your transformation plans.

Communicating a clear and compelling vision will help your fellow leaders and team members to understand the purpose and benefits of your transformation. Craft a narrative that ties the vision to your organization’s values and goals, and how everyone’s individual efforts will contribute to achieving it.

Fostering inclusion and empowerment will mean your people are more likely to support and participate in your transformation efforts. And supporting your teams and people with appropriate training and development opportunities will also help you to gain their buy-in.

3 Strategies for Implementing Growth Transformation

We’ve explored a few of the skills and behaviors required to lead transformation for growth, so let’s look at how to implement it.

1. Setting Metrics and objectives

To make your desire for growth both actionable and tangible, it’s important to consider what your objectives are. It’s very easy to project cashflow on a spreadsheet and to talk about expansion, but without some benchmark for success, you can find yourself firing an arrow with no target in sight.

For example, one short-term growth objective may be to increase your organization’s headcount. Fair enough. But by how many, by when, and in which departments? Do you need to hire for new roles or expand existing ones?

Being clear and clinical about your targets is vital to achieving growth. This thinking applies to all other areas as well – from product development to desired market share, to physical expansion.

2. Building Scalable Systems

British-American computer scientist and entrepreneur, Paul Graham, said, “Start by doing things that don’t scale.” This approach to growth – focusing on manual or time-consuming tasks – is fine for startups or small organization in their first phases of growth, but isn’t really sustainable for larger or more established organizations.

So consider which functions within your organization need to scale, and how. It can be helpful to look first at the areas that are already lagging or tend to produce the most problems. IT architecture is a common scalability challenge in growing companies, but it might also apply to your recruitment and onboarding processes, marketing and sales capacity, or your ability to deliver products and services.

3. Securing Leadership Team Alignment

Before pursuing any growth strategies, it’s important to gain buy-in from your team at all levels. The phrase about “all singing from the same hymn sheet” should be kept in mind throughout your transformation project!

We looked at how to keep your people motivated and engaged with transformation above. But to drive it successfully you need senior leadership or board-level support. Without it, change can be slow or even derailed.

However, getting your “board on board” can establish a consistent vision. It sets a cultural tone, a sense of purpose, and cascades accountability across the organization.

Frequently Asked Questions

What is the difference between Transformation for Growth and Transformation for the Future?

Transformation for Growth focuses on immediate improvements, such as scaling operations, expanding into new markets, and increasing revenue. Transformation for the Future ensures long-term relevance by addressing future trends, sustainability, and resilience against potential disruptions.

How can CEOs ensure their transformation strategy leads to sustainable growth?

CEOs must set clear objectives, make bold yet strategic decisions, align resources with growth priorities, and create a culture of adaptability. Ensuring leadership alignment and investing in scalable systems also help to sustain long-term growth.

What are some common challenges leaders face in driving transformation for growth?

Leaders often struggle with balancing short-term financial pressures with long-term vision, overcoming resistance to change, securing alignment from leadership teams, and ensuring their organization has the right talent and infrastructure to scale effectively.

How does team empowerment contribute to successful transformation?

Engaged and empowered teams are more likely to support and drive transformation efforts. Leaders can foster this by clearly communicating the vision, encouraging collaboration, providing necessary training, and recognizing contributions to keep employees motivated and aligned with organizational goals.