Successful transformations require everyone in the organization to move in the same direction. That can only happen when CEOs directly address collective-action problems. Beyond managing the challenges that organizations face every day, most leaders strive to be transformative—to find new ways to deliver substantial impact and leave the company stronger than they found it. Yet only 30 percent of transformations deliver the value their leaders expect. There are many possible explanations for this statistic, among them unexpected market conditions, tough new competitors, technological disruptions, and a volatile geopolitical landscape. Such external factors are easy to understand. Less appreciated are the internal dynamics in organizations that can thwart even the most ambitious and well-intentioned leaders.
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