The Indisputable Numbers Behind the Value of “Why” in Organisational Transformation
Why do some organisations thrive amid disruption while others falter? This isn’t a new question, but somewhat recent research from Harvard Business Review’s Top 20 Business Transformations of the Last Decade gives us perhaps the clearest answer yet. The study underscores one irrefutable truth: transformation is driven not just by strategic pivots or technological innovation, but by a compelling “Why”—a sense of purpose that transcends profit. The data reveals that purpose isn’t just an abstract ideal; it’s a powerful driver of tangible results.
When leaders align their organisations around a clear purpose, they galvanise not only their teams but also their stakeholders. Companies like Netflix, Ørsted, and Tencent didn’t just change what they did—they redefined why they existed. In doing so, they unlocked new sources of growth, repositioned their businesses, and ultimately, reshaped entire industries.
1. Purpose as the North Star: Setting a Clear Direction for Change
Look at the example of Ørsted, formerly known as Danish Oil and Natural Gas. In 2012, when natural gas prices were plunging, the company could have gone into hibernation, waiting for the market to recover. Instead, CEO Henrik Poulsen made the "audacious" (in the context of the time and the history of the company) decision to abandon fossil fuels altogether and transform Ørsted into a renewable energy powerhouse. It wasn’t a financially driven decision—it was a purpose-driven one, grounded in a commitment to combating climate change.
This wasn’t just a clever rebranding exercise. Poulsen and his leadership team rallied the organisation around a clear vision of becoming a leader in green energy, not just because it was profitable (at the time, it wasn’t) but because it was necessary. The result? Ørsted is now the world’s largest offshore wind energy company, with profits soaring and its market value increasing by billions.
Purpose isn’t just a statement; it’s a strategic compass that guides the entire organisation. When leaders articulate a compelling “Why,” it unifies and energises teams, turning uncertainty into opportunity. Ørsted’s transformation wasn’t merely about shifting its product portfolio; it was about a wholesale shift in identity, one that employees, investors, and customers could rally behind.
2. Redefining the Metrics: Purpose Drives Performance
Companies that place purpose at the heart of their transformation strategies appear to outperform those that don’t. Netflix’s shift from a DVD-by-mail service to a global streaming powerhouse offers a is a well known and compelling example. Reed Hastings and his team realised early on that competing on sheer volume of content. against the well established incumbents like Blockbuster, wasn’t sustainable. Instead, they focused on becoming a passion brand known for high-quality, original programming.
This wasn’t just a narrative shift; it fundamentally changed how Netflix measured success. Rather than focusing solely on subscriber numbers or total views, Netflix began to prioritise engagement metrics—specifically, the number of hours watched and viewer retention. These metrics allowed the company to make strategic decisions on where to invest. For example, by understanding binge-watching behaviours, Netflix doubled down on original series like House of Cards (a personal favourite) and Stranger Things, leading to a dramatic increase in both revenue and profit. In this way, purpose became a strategic lens that drove tough, yet effective, decisions.
Similarly, Siemens redefined its metrics as part of its transformation. Shifting from a pure focus on shareholder value to a broader mission of “serving society,” the company started measuring success not just by profits, but by environmental impact, employee engagement, and contributions to societal well-being. These metrics weren’t just add-ons; they were central to Siemens’ ability to innovate, attract talent, and expand into new markets like 'smart infrastructure' - which uses Internet of Things (IOT) technology to measure and track carbon reduction.
A personal learning for me was the current day iteration of Tencent; initially focused on social media and gaming, Tencent redefined its purpose to “improving the quality of life through internet services.” This led to a strategic pivot toward healthcare, education, and cloud services. Metrics for success evolved from apps like WeChat to include more layered measures like the number of healthcare consultations facilitated through their platforms, and revenue from enterprise cloud solutions. By embedding social good into their KPIs, Tencent not only diversified its revenue streams but also strengthened stakeholder trust, contributing to its sustained growth.
Ultimately, purpose isn’t a vague concept. When organisations align their metrics with a clear, compelling “Why,” they create a framework that drives both cultural and financial performance. The numbers show that aligning purpose with performance leads to not only better business outcomes but also greater stakeholder trust and long-term sustainability.
3. Cultural Shifts: The Foundation of Sustainable Transformation
Behind every successful transformation is a shift in organisational culture, and it’s here that purpose makes its deepest impact. Purpose-driven transformations are sustainable because they go beyond structural or product changes; they reshape how people think, feel, and act within the organisation. One I've had tangential experience with is Ecolab’s transformation under CEO Douglas Baker Jr., who pivoted the company from selling industrial cleansers to becoming a global leader in water management and sustainability.
Baker didn’t just change Ecolab’s strategy—he changed the mindset of the entire organisation. The conversation shifted from “How can we sell more?” to “How can we help the world solve its most pressing water challenges?” This new narrative empowered teams to innovate and deliver more value, not just for shareholders but for society at large. It’s no coincidence that Ecolab’s market value has more than quadrupled since the transformation.
Cultural change, when rooted in purpose, becomes the engine of transformation. It gives people a shared language and a shared mission, making it easier to navigate uncertainty and ambiguity. Leaders who successfully anchor transformation in purpose create organisations that are more resilient, adaptable, and capable of sustained performance.
Given change happens one conversation at a time...when will you start the discussion in your organisation?