A CEO HANDBOOK About Building theTransformational Company This report is a collaboration betweenEngage // InnovateandStrategy Tools – the Modern Strategist’s Platform. The report is built on our work with corporate leaders, CEOs,Boards and strategy leaders over the past seven years. Theframeworks, tools and methodologies have been developed,researched, applied and refined with leading companies acrossenergy, aviation, finance, shipping, mobility, professional services,utility, heavy industry and more. The research behind this report is funded entirely byEngage // Innovate & Strategy Tools. www.engage-innovate.com/reports&www.strategytools.io/reports Transformation is the21stCentury #1leadership challenge. Transformation willforce us to rethink andrelearn how we buildand operate companiesglobally. Transformation isbecoming the “newnormal”. Why We Wrote This… Back in 2014, we hosted Engage // Innovate’s first annual Strategy Summit: Learning To Work Differently With Strategy. We brought togetherexecutives from Tesla, Equinor, Viking Supply Ships and many others to explore how the practice of strategy was changing.The following year, in 2015, we hosted Strategy Summit: Meet the Transformers. Again, we brought together experienced executives going throughthe many stages of transformation (highlight was the behind the scenes look at DSM’s transformation). Since then, we have continued to explore, research and work on significant transformation strategy projects in Europe and beyond. This work has ledus to energy companies in Asia, aviation companies in Europe, Board rooms in the Middle East and emerging transformation programs across theAmericas. Throughout these journeys, we have met with 1000s and 1000s of people across industries and organizational hierarchies, all sharing adesire to better understand how to successfully lead transformation. From Corporate Startups Teams in Europe, Transformation offices in Malaysia andChief Strategy Officers in the Nordics. These insights have fueled new strategy tools, strategy simulations and new strategy processes. Looking ahead, we are convinced large companies will need to build entirely new mindsets and capabilities around strategy. In line with renownedconsulting company Innosight, we expect to see the rate of disruption to pick up, the lifetime of large companies to decrease and transformation tobecome the new normal. This will force us to change how we teach strategy, how companies think about strategy and how strategy leaders preparetheir companies for the future. In this report, we gather our experiences in one single volume. We aim to sharpen our own understanding and share it with a greater strategycommunity across the globe. We hope you may find this report both inspirational and insightful, but most of all we hope it helps drive you to buildmore transformational companies. LEAD AUTHOR CHRISTIAN RANGENSTRATEGIST, ADVISOR, FACULTYFOUNDER OFENGAGE // INNOVATE,STRATEGY TOOLS,X2 INC How we hope it may help your work One of our deeply held beliefs is that, in the coming decade, virtually every company, in every industry will have to go through some level oftransformation. This belief is deeply held within our team, our community and our global network. Equally deep is the belief that very few companies are actually set up for this future. They are simply not structured, built or led to becometransformational companies. This is a massive challenge across industries. It used to be the case that faster moving industries, like software and technology, would just naturally innovate faster and transform faster, while heavyindustries, asset-heavy industries and slower industries would simply innovate slower and equally, have to transform at a much slower pace. This is justno longer true. What we are witnessing is that the speed of innovation and need for transformation is picking up across virtually every industry. This is driven by digital(but our focus extends far beyond just ‘digital transformation’), by improved innovation capabilities in large firms, by a growing number of very well-funded scale ups using VC funding to tip the balance of industries norms. While incumbents have to deliver repeatable, guidable profits on a quarterlybasis, these aggressively-funded growth companies often have a ‘burn-and-grow’ mandate to scale for market share and future profit pools. (for case inpoint, see the mobility landscape and how the German automakers have been pulling out of ‘mobility services’ due to high upfront costs and poorlyexecuted growth strategies). In the near future, every large company, including banks, telcos, energy companies, utility companies, automotive firms, industrial conglomerates,technology, healthcare, media and more will need to build deep transformational capacity.Few have this today. Fully in line with the team at Innosight, we believe transformational changes will accelerate and the lifetime of large firms will continue to decline