What CEOs Get Wrong About Transformation (TPL Insights #326)

By Rob Andrews

Most CEOs think transforming their organization is a management problem. Get the right consultants, build the right program, hold the right review meetings. What they miss is that transforming an organization requires transforming themselves first. I've been studying this for four decades, and I've seen it play out the same way enough times to stop calling it a pattern and start calling it a law.

Charles Butt understood this. In 1987, H-E-B was a sleepy regional supermarket chain that wasn't particularly well run. I know because I was running a 500-store division of National Convenience Stores headquartered in San Antonio at the time. H-E-B had long been a fierce competitor — having driven Kroger out of the market after thirteen years of heavy losses — but its stores were dirty and poorly managed.

Today, H-E-B is one of the most respected retailers in the country. This success wasn't just about hiring the right people and stepping back. It started when consultant Tracy Goss told Charles something most CEOs avoid hearing: H-E-B couldn't change until he changed. He had to let go of his old ideas about what was possible. After thirty-seven years of strong results, her advice speaks for itself.

The Part That Nobody Wants to Do

The process that followed was far from glamorous. Charles had to lead the transformation himself, keep the conversation going even when others lost interest, and repeat the purpose and mission long after it seemed needed. This is where most CEOs struggle. Alan Lafley at P&G called it "excruciating repetition." In a busy company, messages from the top can disappear quickly. You must repeat them until you're tired of hearing yourself — and only then are you close to what's needed.

“CEOs who give only lip service to a transformation will find everyone else doing the same.”

The modeling question is where things get uncomfortable. CEOs ask organizations to change while running meetings the same way, making decisions the same way, and rewarding the same people they have always rewarded. Everyone below the executive suite watches that and draws the obvious conclusion. McKinsey's research on this, based on interviews with executives across major transformation efforts, is unambiguous: the behavior at the top determines the behavior everywhere else.

Personal transformation isn't abstract. The CEOs who do it well typically undergo 360-degree feedback aligned with the transformation's objectives, commit to a short list of specific behavioral changes, and work with a coach toward those ends.

When Narayana Murthy stepped aside from the CEO role at Infosys to become chief mentor, his reasoning was direct: you must sacrifice yourself first for a big cause before you can ask others

to do the same. That's either the most selfless thing a CEO can do or the savviest — and I'm not sure it matters which.

What the Organization Is Actually Watching

The team question is one I've watched derail more transformations than any other single factor. CEOs are loyal — often more loyal than the situation warrants. There are people in senior roles who perform acceptably and quietly undermine everything the transformation requires. The organization watches what happens to those people. If nothing happens, everyone recalibrates what the transformation demands.

The most dangerous case is the high performer with the wrong behavior, because the temptation to look the other way is real. EMC's Joe Tucci said he had to take public action to address what he called a "whiff of arrogance" in parts of the company. The word public is what matters. Private conversations with problem executives are management hygiene. Public consequences are cultural signals.

What Gets Celebrated Gets Repeated

A study I remember well involved two bowling teams. Researchers showed one team only its mistakes and the other only its successes. The team that watched its successes improved twice as fast. CEOs who highlight people showing the right behaviors help the organization change faster than those who focus on punishing old habits. Most leaders instinctively do the opposite.

Getting personally involved in the operational work is what separates the CEOs who pull off transformation from those who manage the program. Peter Gossas, who ran Sandvik Materials Technology, would walk into the melt shop and start problem-solving directly with shift workers. Some decisions are made faster and better when the CEO is in the room, and some problems never surface on dashboards at all.

Why the Review Room Matters More Than the Kickoff

Review meetings are more important than they seem. The CEO's role there isn't just to get updates. It's to make sure decisions are based on real data, that short-term pressures don't always take priority over long-term goals, and that accountability is more than just a red mark on a slide.

John Varley at Barclays admitted that focusing too much on financial numbers made them lose sight of the company's overall health. By the time they noticed, some parts of the business needed urgent fixes. Balancing both short- and long-term goals is tough, and most routines make it easy to ignore one or the other.

I've watched the failure mode enough times to describe it precisely. The CEO gives an excellent kickoff. The story is compelling. Around month four, the resistance organizes, the results lag, and the next earnings call is two weeks out. The transformation quietly becomes someone else's job.

It was never going to survive on someone else's desk.