Transformation starts at the top: Successful transformation through leadership and culture

Only 30% of all transformations are successful. The reasons? It is rarely due to technology—it is usually due to leadership and corporate culture. If you want change, you have to credibly exemplify it and embed it in your culture.

The silent crisis of transformation

Whether it's digitalization, strategic realignment, or new business models, transformations are complex—and risky for companies and their management. Studies by Deloitte, McKinsey, and Fraunhofer all agree: around 70% of change initiatives fail. The causes lie less in technology or a lack of acceptance and implementation, and more specifically at the top of the company, i.e., among the executive boards, managing directors, and supervisory and administrative boards.

Leadership is the key lever

The figures, data, and facts speak for themselves:

Companies that consistently involve their managers in the transformation process and demand their commitment are three times more successful than their competitors.

This is shown by a global study conducted by the Boston Consulting Group, which examined over 100 transformation projects. This is also consistent with our consulting experience at transformind. The more involved the top management level, including the supervisory board or board of directors, is, the greater the chances of success.

What does that mean in concrete terms?

• Leadership as the No. 1 success factor: According to BCG, the first of six building blocks for success is “aligning leadership with a powerful purpose” – in other words, aligning leadership with a clear, meaningful vision.

• Head, Heart, Hands: Successful companies activate their managers strategically (head), emotionally (heart), and operationally (hands). Those who exploit all three dimensions achieve sustainable performance improvements in 96% of cases. This also means that large, complex technology projects, leadership, and especially leadership in transformations require practice in order to be successfully implemented.

• Specific example: A telecommunications group consistently trains all managers in change management and, once they have reached a certain level of seniority, in leading change processes. Workshops and dialogue events create a learning environment with a high level of psychological safety. An insurance company repeatedly carries out small technical innovation projects to increase technical project competence for a transformation.

Culture eats strategy for breakfast. (Peter Drucker)

Cultural change is the most important success factor in digital transformation. A culture that allows mistakes, encourages experimentation, and embraces openness creates space for innovation.

This is confirmed by recent studies:

The DLR/Saarland study shows that companies with a high tolerance for risk and error are significantly more successful. Conversely, a rigid culture acts as a brake – especially when management overestimates the degree of cultural maturity (“digital detachment”).

What constitutes successful transformation through leadership and culture

Leadership by example: Managers exemplify change—visibly and credibly. They put themselves out there, allow themselves to make certain mistakes, learn from them, and allow their employees to do the same. This creates an atmosphere that is focused on the future and development.

Purpose-driven leadership: A clear, inspiring corporate purpose and transformation goal motivates and unites. If it is not clear within the organization WHY change is necessary, this leads to irritation, reduced motivation, inefficiency, and often to key employees leaving the company.

Structured change support: Change becomes manageable with a clear strategy, a transformation process, and regular communication.

Recommendations for decision-makers:

1. Developing managers

   Training, coaching, and new role models strengthen leadership skills. Top management must also continue to develop—both professionally and culturally. This includes a great deal of exchange and forward thinking among managers, i.e., management dialogues and workshops on development and future topics.

2. Shaping culture in a targeted manner

   Psychological safety, open communication, and tolerance for mistakes are key elements. This cultural change has nothing to do with laissez-faire. On the contrary, a culture of progress needs role models, courage, clear leadership, and structure.

3. Transformation starts at the top: Successful transformation through leadership and culture

   Integrating leadership and culture

   Every decision and every communication should reflect the desired culture of the future. Transformation can only succeed if both levers work in sync.

Conclusion: Transformation is feasible

Successful transformation through leadership and culture is no coincidence. Companies that invest in leadership development, coaching, and active culture development significantly increase their success rate—by up to 87% according to Deloitte. At transformind, we don't have any quantitative data on this, but our experience confirms this finding, and it applies to SMEs as well as large corporations.

It takes courage, clarity, consistency, and patience. Above all, it takes a company leadership that not only demands change, but also lives it.