March 8, 2025
Managing Partner
Organizations that commit to a bold, fact-based transformation agenda—supported by healthy leadership behaviors—consistently outperform their peers in both growth and profitability.
Santiago & Company reveals that transformation is not merely a process but a bold strategic decision that drives profitable growth through distinct behaviors. Business leaders now view transformation as the courageous step necessary to achieve an ambitious agenda. Recent analysis shows that companies embark on these journeys to reinvent their operations, explore bolder ambitions, drive significant growth, overhaul their operating models, develop new competitive capabilities, and reshape their cultures to set them apart.
What Is Transformation?
Transformation begins with an audacious initiative supported by a robust fact base and an external perspective. This disciplined process drives strategic choices that fundamentally reshape how an organization operates, delivering marked performance, innovation, and growth improvements. A comprehensive transformation agenda that places growth at its core distinguishes industry leaders from their competitors.
Our research shows that leading growth transformers are more agile and exhibit superior organizational health. This term captures how effectively leaders manage operations, make decisions, allocate resources, and inspire their teams. A healthy organization forms the bedrock of sustained success, often delivering three times the total shareholder return of its less healthy peers. Compared with our global database, these companies are 1.7 times more likely to rank in the top two quartiles for organizational health.
Our findings pinpoint five key management practices that drive their success. These practices consistently ranked higher among top performers in our global sample, distinguishing them from less successful competitors.
Transformation starts by setting an ambitious performance target against external benchmarks designed to serve customers. Such aspirations are inherently bold and non-incremental. Leading companies rigorously analyze competitive trends, customer feedback, investor expectations, and insights from the growth spread matrix, as illustrated in Exhibit 3. This detailed analysis reveals how organic growth and margin improvements contribute to discounted cash flow and, ultimately, share price. It also opens diverse pathways for growth—whether by expanding core operations, venturing into adjacent markets, or pursuing mergers and acquisitions. By drawing on a robust fact base, companies can set market position targets that extend well beyond a narrow focus on EBITDA, giving boards a comprehensive view.
Often, companies discover that achieving their full growth potential requires capabilities beyond their internal resources. External partnerships and alliances become vital levers that unlock opportunities and extend the reach of a company's growth ambition.
Our analysis reveals that these leaders consistently achieve revenue growth and profitability that exceed their subsector medians. This article delves into the critical choices and actions that set these companies apart, exploring how they weave these behaviors into their daily practices. Prior research shows that organizations prioritizing health in their transformations realize nearly double the excess total shareholder return compared to those that do not. In addition to the five defining behaviors, we uncovered common traits all successful growth transformers share.
Everyone places the customer at the center, linking customer feedback directly to strategic decisions. They deploy formal feedback mechanisms to enhance individual performance and set clear expectations regarding behavioral norms. Transparency remains paramount as they openly share the metrics that drive execution and performance. Moreover, they empower employees by pushing decision-making down to the lowest levels, fostering a strong sense of ownership. These practices are essential for any company aiming to transform for growth, and their significance is woven throughout our discussion.
Consider the example of a retailer that sought external perspectives before launching a comprehensive transformation encompassing growth, productivity, and operational restructuring. Confronted with slowing growth due to COVID-19, fierce competition from international giants, and direct-to-consumer challenges, the company's leaders conducted a detailed assessment to determine where to focus their growth ambitions. They analyzed customer demand for their brand relative to competitors and assessed overall customer satisfaction. These external insights enabled the retailer to craft a targeted transformation plan that quantified available market share, identified the necessary repositioning, and set clear initiatives, investments, and outcomes. The plan revealed a 30 percent revenue growth opportunity over four to five years, and one year into the transformation, the company is well on track to meet that target.
Leading growth transformers integrate technology into their strategic decisions from the beginning rather than relegating it to a secondary role. They identify areas within their business models where speed, network effects, scale, or artificial intelligence can yield a competitive edge. For example, a company may automate its customer experience and deploy AI tools to determine each customer's best action, enhancing sales efficiency. Furthermore, these companies invest in building employee capabilities that support their growth objectives, fostering faster decision-making, greater transparency, and sustained high performance.
Before rolling out technology initiatives, companies assess their digital gaps and strategic distance from peers, measuring their "tech debt." They then craft detailed road maps that outline the capabilities needed to embed automation, engage customers meaningfully, and drive rapid innovation, often through strategic AI and software partnerships. In many cases, advanced analytics and AI-based predictive models help identify revenue drivers, assess the value of marketing campaigns, and inform critical growth decisions. This central technology strategy ensures transparency by providing comprehensive, organization-wide visibility into performance metrics.
Prioritizing technology in the transformation process enhances efficiency and transparency while enabling continuous feedback. However, companies must integrate these tools into daily operations and adopt structured change management programs to realize their full potential. Leaders must recognize that shifting mindsets and behaviors to embrace technology starts at the top and is crucial to unlocking growth.
Leading growth transformers make a profound impact by fostering a performance-driven culture that challenges employees to excel. They cultivate a leadership ethos that encourages tough questions, pushes decisions to lower levels, and sets ambitious targets. Setting bold targets often yields results that exceed expectations by as much as 2.7 times. To sustain this momentum, organizations establish rigorous performance infrastructures. Many set up an acceleration office (AO) that orchestrates daily, weekly, monthly, and quarterly interactions among key functions and experts. These meetings focus on rapid problem-solving and scaling growth initiatives, with dedicated "win rooms" tasked with reclaiming lost customers and generating new leads.
Clear communication underpins this disciplined execution. Transparent performance outcomes are a single source of truth—a reliable set of data companies share through tailored dashboards across the organization.
One prominent US financial services company provides a clear example of these practices. It launched its transformation by fostering a culture that challenges conventional thinking and implementing a robust execution program. The company unveiled an ambitious growth initiative timed for its investor day two years later. To spark innovative thinking, it selected 60 managers to reimagine its existing business and 30 innovators to propose breakthrough ideas. This effort coalesced into a comprehensive four-part growth system that evaluated current objectives, explored opportunities beyond the core, built necessary capabilities, and standardized communication through a common language and toolkit. While the program is still evolving, early results are promising, with the transformation already driving an annual revenue growth of 10 percent.
Success in transformation requires aligning challenges with rewards. Companies integrate comprehensive incentive programs with formal and informal feedback mechanisms to support performance and build capability, ensuring that every effort contributes to the overall growth narrative.
A steadfast commitment to facts and data further distinguishes leading growth transformers. They build robust fact bases from trusted sources and use this data to guide decisions throughout their transformation journey. Consider a software firm that, after experiencing stagnant revenues, set out to transform its product portfolio and go-to-market capabilities to achieve double-digit annual growth. The firm simultaneously launched product development, marketing, sales, and organizational health initiatives. It reoriented its product strategy toward higher-growth markets and leveraged mergers and acquisitions to accelerate progress. By expanding indirect sales and investing heavily in marketing, the company broadened its customer base and strengthened its opportunity pipeline. Organizational and cultural changes that promote speed and agile decision-making have propelled the firm well ahead of its growth targets.
Ultimately, leading growth transformers achieve impressive growth and profitability by focusing on five essential healthy behaviors. Embedding these behaviors into everyday operations demands a bold vision, robust technological infrastructure, rigorous execution, and advanced performance management systems that nurture cultural change. Companies that adopt this holistic approach transcend simple cost-cutting, unlocking sustainable, profitable growth.
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