ADL Global Transformation Study
Embracing transformation in a disrupted world
Best practices for thriving in an age of uncertainty
Global Transformation Takes Center Stage
The study reveals the scale, scope, and success rates of transformation initiatives across the world.
Based on interviews with 400 senior managers, the research covers six regions (Asia-Pacific, the Middle East, Africa, Europe, Latin America, and North America), weighted between 10 key sectors — consumer goods and retail; healthcare; travel, transportation, and tourism; energy and utilities; automotive; manufacturing; financial services; telecom; high-tech and digital; and life sciences.
The study highlights that nearly two-thirds (65%) of companies are undergoing continuous or expanding transformation initiatives throughout their organization, and 95% of respondents are highly confident that their transformation programs will deliver success.
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Current economic and geopolitical volatility is driving a shift toward continuous transformation. However, there is a distinct difference between having a well-defined approach of continuous transformation and constantly being in a state of transformation without seeing improvements. Embracing an approach focused on transformation that is intentional, responsive, adaptive, and — above all — iterative to share best practices is vital to build momentum and deliver lasting and ongoing change.
Making Transformation Deliver
WHY IS TRANSFORMATION A PRIORITY?
The three main drivers are regulatory change (including government action such as tariffs), technological disruption, and shifts in customer needs and behaviors, all of which score 4.1/5 in terms of prioritization. This translates into dual objectives around increasing cost efficiency (which scores an average of 4.4/5 globally) and greater customer/product focus (also 4.4). Businesses want to continue optimizing their efficiency and improving their productivity, particularly through technology. At the same time, they are increasing their customer focus, ensuring they are creating the right products for the right people to protect/grow their market share.
Time frames for transformation vary significantly between regions. The overwhelming majority (71%) have a four-to-six-year window for initiatives, with the largest group (32%) focused on five years. However, average timelines range from 3.2 years in North America to 4.9 years in the Middle East and 5.5 years in Asia-Pacific.
Increasingly, transformation efforts are being led by CTrOs, with nearly a third (32%) of companies having one in place, with a further 41% of transformation efforts led by the CEO. Again, the spread of the role varies considerably by region — more than half (53%) of surveyed European companies have a CTrO, compared with just 5% in Asia-Pacific.
WHO IS LEADING THE COMPANY-WIDE TRANSFORMATION ACROSS SECTORS?
Average
Asia-Pacific
Middle East
Africa
Europe
Latin America
North America
For the role to succeed, it must be completely separate from the business, report directly to the CEO, and be fully and publicly supported by them, particularly in the face of senior-level politics.
Simply putting a CTrO in place is not enough. For the role to succeed, it must be completely separate from the business, report directly to the CEO, and be fully and publicly supported by both, particularly in the face of senior-level politics.
4.4
Resourcing, people engagement, and technology adoption are seen as the top transformation challenges, with each rating highly/very important by more than 85% of survey respondents. All three involve people, showing the importance of engaging with and energizing employees regarding transformation success.
Demonstrating this focus on people, upskilling is the most popular organizational change related to transformation (cited by 89% of survey respondents), with the highest focus on developing capabilities in three areas — data and analytics, digital and technology proficiency and interpersonal and communication skills, all ranked at 4.3/5 in terms of importance. AI remains a lower priority, with only a quarter globally seeing it as highly important.
How important are the following challenges in your company's transformation?
However, the need for upskilling is not translating into priorities and implementations. Just 12% of respondents see re-skilling/building capabilities as being highly important, and around a quarter (27%) consider it a low priority.
Reflecting this lack of focus, only 5% see their current learning organization and culture as being very effective, with 35% seeing it as “slightly effective.” Resistance to learning is cited as the top barrier to effectiveness, ahead of insufficient internal expertise.
Consequently, only 6% feel very confident that their organization can identify and address the skills and capabilities required for future transformations. There are sharp variations between sectors, with healthcare and high-tech/digital exhibiting the highest confidence levels, while manufacturing and travel and tourism bring up the rear.
Looking ahead, how confident are you that your organization can identify and address the skills and capabilities required for future transformation?
Drilling down into the data and comparing it with our experience, the good news is that respondents have put practices and capabilities in place to manage transformation “technically.” They clearly understand its value and the need to take a strategic, organization-wide approach.
The bad news is that while around half (54%) of survey respondents see the change readiness and engagement of their organization as an 8 out of 10, 37% rate their organization as just averagely engaged in transformation (scoring 7 out of 10 or less). These gaps are likely to undermine the likelihood of transformation success, despite respondents’ confidence that they will achieve their objectives. To achieve success in today’s environment, organizations need to refocus their intentional culture-change initiatives as part of their transformation programs.
Success will require organizations to focus much more on their people, going beyond structural change to embed cultures that support transformation and agility. They must also encourage employees to move forward and engage with the re-skilling and upskilling programs required to ensure they have the right capabilities for the future.
Transformation is not a one-time initiative; it is a mindset, a discipline, and a journey. As part of ADL’s commitment to supporting effective transformation, the study combines senior-level research with insights, methodologies, and best-practice recommendations, providing both an inspiration and a practical guide for those ready to embark on their transformative journey.
5.5
4.9
4.8
4.7
3.7
3.2
What is the timeline for achieving your transformation objectives? — Average number of years per region
Transformation is now a way of life for global companies as they react to disruption caused by regulatory change, technology advances, and shifting customer behaviors. That’s the headline finding from the inaugural Arthur D. Little (ADL) Global Transformation Study, which highlights that CEOs and a growing number of chief transformation officers (CTrOs) are overwhelmingly confident that their transformation projects will deliver on time and improve performance.
Limited
Expanding
Ongoing
Continuous
4
3
2
1
Some business unit transformation
Several transformations occuring throughout the organization
Many transformations ongoing in multiple business units
Ongoing transformation at a company-wide and business unit level
2.5%
59%
32%
7%
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Energy & utilities
Telecom
Manufacturing (excluding automotive)
Travel & transportation & tourism
Life sciences
Healthcare
Financial services
High-tech & digital
Automotive
Consumer goods & retail
Average
CTrO
CEO
CFO
CHRO
COO
CSO
32%
8%
12%
2%
3%
42%
48%
8%
8%
3%
0%
35%
37%
13%
13%
0%
0%
37%
36%
14%
17%
0%
2%
32%
34%
3%
7%
3%
0%
53%
32%
8%
14%
4%
2%
40%
30%
7%
7%
3%
8%
45%
30%
10%
13%
3%
0%
43%
27%
10%
7%
0%
3%
53%
25%
3%
23%
5%
5%
40%
23%
10%
17%
0%
7%
43%
1 - Not important
Expertise and capibility gap
Resourcing
Culture change & leadership
Techonology adoption
Speed
People engagement
Financing
Collaboration
"One voice" and consistent communication
5 - Very important
Average
3.4
3.8
3.9
4.0
4.0
4.1
4.3
4.3
4.4
14%
40%
36%
15%
1%
14%
51%
31%
4%
0%
22%
50%
25%
4%
0%
27%
47%
23%
4%
0%
28%
52%
17%
4%
0%
39%
35%
23%
3%
0%
37%
53%
10%
1%
0%
49%
36%
14%
2%
0%
47%
42%
10%
1%
0%
1 - Slightly confident
4 - Very confident
Travel & transportation & tourism
Life sciences
High-tech & digital
Healthcare
Financial services
Energy & utilities
Consumer goods & retail
Automotive
Average
5%
58%
37%
0%
3%
67%
30%
0%
13%
70%
18%
0%
10%
77%
13%
0%
8%
68%
22%
2%
3%
67%
30%
0%
3%
83%
13%
0%
3%
73%
23%
0%
6%
67%
27%
0%
Manufacturing (excluding automotive)
Telecom
3%
50%
48%
0%
7%
67%
27%
0%
Although most transformations follow multiyear timelines to maintain focus, regulatory and geopolitical volatility is increasingly disrupting these plans — in some cases, rendering long-term strategies obsolete. There clearly needs to be a balance between dedicating sufficient time to deliver transformation successfully and preventing initiatives from dragging on unnecessarily, wasting resources and time.