Amid mounting external pressures, transformation has become a top priority for many businesses. Yet most transformation efforts are likely to fall short. Here’s why — and what leaders can do to increase their odds of success.

In conversations with clients and speaker agencies, we’ve consistently heard that transformation tops the organizational agenda. Given the sweeping changes reshaping our world — from rapid technological advances and geopolitical shifts to the disruption of entire business models by climate change — this comes as no surprise.

Leaders everywhere are being compelled to assess how these seismic shifts will affect their organizations. Still, we predict that few will succeed in transforming to the degree necessary to thrive in the coming years.

One reason for this shortfall is the mismatch between the exponential pace of technological innovation — as described by Moore’s Law — and the much slower rate of change in traditional business functions. It’s even less compatible with the human brain’s ability to adapt. Brian Krzanich, former CEO of Intel, famously noted that if a 1971 Volkswagen Beetle had advanced at the rate of microprocessors, it would today travel at 300,000 miles per hour, get 2 million miles per gallon, and cost just four cents. By comparison, human adaptation is glacial: upgrading a mindset can take a generation. Consider my 98-year-old father, who bought a laptop in 2002 but never mastered email. After each attempt, he shelved the laptop upright — like a book. I navigate the digital world with ease — until I witness the seemingly innate fluency of my nephews and nieces.

Organizations struggle to cope with the vastly different speeds at which change occurs across departments. While technology evolves at light speed, areas like administration, leadership, and finance tend to move at a more human pace — if we’re lucky. The resulting cultural friction is palpable. It’s like a Ferrari trying to tow a go-kart.

It doesn’t take a rocket scientist to see that navigating these massive transformational forces is difficult. But two clear reasons stand out for why so many transformation projects fail. They’re worth highlighting because, unlike external shocks, these are within a leader’s control — and addressing them can make all the difference.

1. A lack of understanding around the difference between change and transformation
2. The tendency to “deal with global changes,” which positions businesses as followers rather than leaders in their sector

Let’s examine these two challenges more closely — their implications, and how they can be overcome.

Change vs. transformation – And why it matters

We’re currently working with Directors of Transformation at two global corporations. In both cases, they report to the Senior Vice President of Global Strategy and Transformation. And in both, the central question is: “What should we do differently?” For one, it’s whether to outsource or produce in-house. For the other, it’s whether to implement a centralized core operating system across all product lines, or allow individual business units to maintain their own systems.

These are undoubtedly important decisions. But they have little to do with transformation. They’re about doing the same things in different ways — which is change, not transformation.

Change means doing more, less, or something different — within the same paradigm.

Transformation means shifting the paradigm altogether.

Change is when Hilton Hotels diversifies by acquiring different classes of properties, or adopts AI to boost efficiency. Transformation is the realization that you don’t need to own a single hotel to become the largest hospitality brand in the world — like Airbnb.

The difference is profound. Change demands effort — defining new processes, implementing them, managing people through transitions.

Transformation begins with a single new thought that opens an entirely different world of possibility — a fresh, exhilarating playground others couldn’t even see. Imagine the difference in energy and engagement between Hilton’s employees and those who helped build Airbnb.

So, ask yourself: Are your conversations about change — or transformation? And who could you invite into the conversation to spark the kind of thinking that might change everything?

“Dealing with global changes”: A recipe for mediocrity

In our keynotes, we describe three typical ways organizations respond to the new world order:

1. The Traditionalists seek to preserve the status quo and existing power structures. “Make America Great Again” is one such example — a call to restore the 1950s. Similarly, educational institutions that cling to outdated teaching models in a world where global knowledge now doubles every 12 hours fall into this camp. In essence, Traditionalists attempt to resist the momentum of Moore’s Law and its inevitable effects.

They’re like drivers barreling down the highway while staring into the rearview mirror.

2. The Majority tries to “deal with global changes.” They stay informed, monitor trends, and adapt — either reactively or in cautious anticipation. But adaptation often comes with the unspoken expectation that employees will change. Anyone who’s ever tried to change their partner in a relationship knows how well that usually goes. Organizations that focus on “dealing with global changes” respond to external forces rather than charting their own course — making them followers, not leaders, in their fields.

The Majority may be looking forward as they drive, but there’s little clarity on where they’re going — only the hope they’ll arrive somewhere worthwhile.

3. The Innovators don’t concern themselves with adapting to global changes — they’re the ones creating them. Think Airbnb, Uber, Netflix, or OpenAI. These organizations aren’t wrestling with transformation; they are the transformation. They operate within an entirely different paradigm. Innovators aren’t on the highway at all. They’re flying.

Consider where you stand: Are you a Traditionalist, part of the Majority, or an Innovator? And who could you invite into your conversations to help you operate more like an Innovator?

Implications for leadership & business

The differing speeds at which technology and more traditional parts of an organization evolve are creating significant conflict and tension.

As our brains struggle to process the sheer volume of change, tension, and uncertainty, more and more people are becoming overwhelmed — reacting with anxiety, resistance, or fear. It will fall to leaders to navigate this emotional terrain, a skill most have never been trained to develop.

Transformation begins with a single new thought that opens an entirely different world of possibility.

At the same time, we’re entering a new game — one where the potential to create value is boundless. To harness it, managers must guide their teams into entirely new conceptual “rooms,” where fresh possibilities come into view. Traditional leadership methods won’t suffice. Instead, leaders must create environments of inspiration and psychological safety, where even the slower-to-adapt parts of the organization can embrace change.

Leaders will need to elevate their people to a new level of consciousness — one that reveals insights they hadn’t seen before and now cannot unsee. This includes glimpses of who they are meant to be, and a higher vantage point that offers the courage and safety to explore unfamiliar territory. You’ll know you’ve succeeded when you hear things like, “This was the most life-changing experience of my adult life,” or, “There was a person A before the program, and a person B after.”

Even when it feels like everything is falling apart, there is a larger pattern emerging. Ultimately, we’re all on a shared journey — midwifing a new way of working and living. In that spirit, reach out to us when the inspiration strikes or the need arises.