Source: Sommerfield Communications, Inc.

UPDATE - Ten Companies Lead in Responding to Radical Market Change and Reinventing Themselves for a Different Future, According to New Analysis of Public Company Data

The "Transformation 10" Goes Beyond Celebrated Tech Companies, Says Innosight

LEXINGTON, MA--(Marketwired - May 9, 2017) - As the pace of change accelerates in virtually every industry, a new study has identified the 10 global companies that have done the best job of remaking their businesses. The list -- which includes celebrated tech innovators like Amazon and Netflix as well as standouts from industries that don't as frequently make innovation headlines, including health care company DaVita and food and beverage giant Danone -- offers insights into how market leaders can sustain growth even as disruption threatens their historically successful core business.

The Transformation 10, a new report by growth strategy consulting firm Innosight, analyzed 1,000 companies and engaged a panel of business leaders to identify the 10 companies whose transformations had the biggest impact on their respective industries and the most potential to be sustained. The judges included former P&G CEO A.G. Lafley, former Boeing Defense CEO Chris Chadwick, and Columbia business professor Rita Gunther McGrath.

Online retailer Amazon and entertainment firm Netflix were tied atop the rankings, followed (in order) by travel-technology company Priceline; global tech firm Apple; health insurer Aetna; software company Adobe; health care firm DaVita; computer and software maker Microsoft; food and beverage company Danone; and steel maker ThyssenKrupp.

"A company survives and thrives over time based not on its size at any given time, but on its ability to adapt to disruption and to reposition itself to create a new future. We believe that by identifying companies that are transforming successfully, we can gain a better understanding of the dynamics and success factors of transformation," notes Innosight managing partner Scott Anthony, who is the co-author of the just-released Dual Transformation: How to Reposition Today's Business While Creating the Future (Harvard Business Review Press).

Each company in the Transformation 10 found a way to create new growth while repositioning its traditional business:

1. Online retail giant Amazon developed technology to streamline internal operations, then turned it into a cloud computing platform that Amazon began selling to outside customers as large as the U.S. government. Since beginning what is now Amazon Web Services (AWS) in 2006, the new growth area now delivers about 10% of revenue, and accounted for more than half of Amazon's operating profit in 2015. At the same time, Amazon has steadily fortified its core online retail business with new categories, including a growing library of music, movies and original programming.

2. Video entertainment company Netflix began shifting its business model to include on-demand streaming as well as traditional hard-copy DVD rentals in 2007. That core business of hard-copy rentals continues to exist, albeit in a diminished state. Meanwhile, Netflix's domestic and international streaming business posted almost 90% of the firm's revenue in 2015, and the company has been producing and commissioning its own content since 2013, another potential source of growth.

3. Travel-technology company Priceline was already the world leader in online travel in 2010, when it decided to provide a more complete service that included the "long tail" of travel suppliers beyond the major hotels (e.g., independent hotels, apartment buildings). To capture that new growth, Priceline acquired companies like and KAYAK, and the new growth business generated about 25% of revenue in 2015. Simultaneously, Priceline recalibrated its core business around helping customers plan a complete travel experience -- much like an online concierge.

4. Beginning in 2007, computer giant Apple moved beyond its successful computer hardware business to create the world's biggest ecosystem for digital content -- and then to build on that ecosystem with new devices like the iPhone. Apple continues to be a manufacturer of computers, but the revenue from the firm's digital networks and related products now accounts for 80% of the company.

5. Health insurer Aetna's traditional model of selling health insurance through employers has grown nearly 80% over the last four years. Starting in 2010, the firm also began selling care management directly to consumers, and health care IT services to providers. Revenue from these newer, "value-based" contracts now accounts for about 40% of overall firm revenue.

6. Software company Adobe dominated the market for creating and designing documents and images, thanks to brands like Photoshop, Illustrator and Acrobat. But by 2008, fearing a saturated user base and a shift to cloud-based business models, the firm announced a new focus on digital marketing and analytics through a software as a service (SaaS) business model. The core business of packaged creative software lives on as the Creative Cloud subscription service, and new growth through digital marketing now creates almost half (45%) of overall revenue.

7. Health care firm DaVita specialized in kidney dialysis, making its money on a traditional fee-for-service business model and becoming one of the largest operators in its field. But starting in 2012, DaVita began building an "integrated delivery network" to deliver dialysis care as well as manage patients' total healthcare. The core business -- dialysis care -- has nearly doubled over the last 10 years, while new growth now delivers 30% of total revenue.

8. Computer firm Microsoft continues to sell hardware and software; its legacy business offering still accounts for about half the company. But, starting in 2010, the firm made a bet on embracing cloud-based technology -- while building up its hardware business. Its Intelligent Cloud business, which includes Azure and on-premises server software, reported 2016 revenue of more than $25 billion, almost a third (32%) of the company total.

9. French food and beverage firm Danone moved beyond its traditional yogurt business to grow a portfolio of health brands, including baby foods and other early life nutrition products. Those newer brands now generate 29% of Danone's revenue, up from just 3% in 2006. At the same time, a slimmed-down core business, refocused on healthy yogurts and other nutritional foods, is still profitable and accounts for the majority of the business.

10. German steel maker ThyssenKrupp, under pressure from low-cost producers in Asia, decided to move drastically away from making and selling steel. Instead, in 2012 the firm began investing in industrial solutions, providing capital equipment, software and services to manufacturers, including refineries and automakers. The new growth area already accounts for 47% of total company revenue.

The Transformation 10 report highlights a few takeaways and lessons that can help business leaders respond to market disruption and position their companies for the future, including:

  • Transformational CEOs tend to be "insider outsiders." Typically it's not a complete outsider who instigates the change, but a leader who worked at the edges of the organization or in a parallel part of the industry.

  • Transformation involves two separate journeys. The most effective transformation efforts are not monolithic but take a two-pronged approach: repositioning the core business while creating the future growth business.

  • Transformation can only take root if you are constantly telling a story about the future. To transform a company, the CEO must also act as the "storyteller in chief." That means telling different aspects of the same transformation narrative to all the constituencies and stakeholders in and of the company.

  • Develop a roadmap for transformation before disruption takes hold. By the time the need to transform is clear, it is often too late. Leaders need to stay ahead of new technologies and competitors that can derail their business and act before fault lines are entirely clear.


The research focused on 57 companies from the S&P 500 and Global 500 that had made significant public commitments to transformation. The analysis evaluated public companies through three lenses: new growth, success in repositioning the core, and select financial metrics. 

To assess areas of new growth, Innosight measured how successful these companies have been at creating new products, services, markets and business models, and in that process determined the percent of revenue that can be attributed to new growth areas. To measure success in repositioning the core business, Innosight examined how effectively these companies adapted their traditional businesses to changes or disruptions in their markets. The financial metrics that Innosight analyzed combined annual growth rate (CAGR) of each company's revenue and stock price, as well as overall profitability, during their respective transformation periods.

After narrowing down to a list of 18 companies, Innosight worked with a panel of business leaders to identify the 10 companies whose transformations had the biggest impact on their respective industries and the most potential to be sustained. The judges were: Chris Chadwick, former CEO, Boeing Defense; Clay Christensen, Professor, Harvard Business School and Innosight co-founder; Scott Cook, Founder and Chairman of Intuit; Matthew Eyring, Chief Strategy and Innovation Officer at Vivint; A.G. Lafley, former CEO of Procter & Gamble; Rita McGrath, Professor, Columbia Business School; Teo Ming Kian, Director Temasek and Chairman Vertex Holdings; Theodor Weimer, Country Chairman, UniCredit.

To read the Transformation 10 report, please visit:

Innosight, the strategy and innovation business of global professional services firm Huron, helps organizations design and create the future, instead of being disrupted by it. Acquired by Huron in 2017, Innosight is the leading authority on disruptive innovation and strategic transformation. The company collaborates with clients across a range of industries to identify new growth opportunities, build new ventures and capabilities, and accelerate organizational change. Learn more at and

Contact Information:

For more information, or to speak with Scott Anthony, please contact:
Eric Mosher
Sommerfield Communications
+1 (212) 255-8386