Transformation: Why It Matters and How Leading Companies are Getting It Right

In boardrooms and investor calls across the globe, "transformation" has become the watchword. It’s the phrase that captures both the urgency and ambition of today’s business leaders as they adapt to a world that is faster, more competitive, and more tech-driven than ever. It’s become a survival strategy for businesses that wish to stay relevant and competitive.

As revealed in PwC's latest Global CEO Survey, 45% of CEOs are concerned that their companies won’t be economically viable within the next decade if they don’t change course. This urgency isn’t limited to a few sectors or regions—it’s widespread, reflecting a significant shift in how businesses view the future.

Transformation is particularly pressing for small and medium-sized enterprises (SMEs), where resources are often constrained, and the competition includes giants with deep pockets for technology and talent. So how can SMEs achieve the agility and innovation required to thrive? Here are some insights from top-performing companies that have successfully implemented transformative practices:

Prioritize Transformation Early

According to industry surveys, top-quintile companies have been prioritizing transformation for several years.

In PWC survey over three-quarters of respondents at top quintile companies made transformation a key focus three or more years ago.

And it’s clear that acting early provides a distinct advantage. For SMEs, taking small but strategic steps towards transformation—whether by adopting new technologies or exploring new business models—can create a foundation for long-term success.

Invest in the Right Areas

Transformation isn’t a one-size-fits-all process, but successful companies have increased their investment in key areas that drive change.

Leading organizations are nearly four times more likely to have boosted their spending by 30% or more in business ecosystems, managed services partnerships, and new technologies over the past three years.

For SMEs, investing in these areas can be particularly impactful:

Business Ecosystems: Building networks of partnerships allows companies to leverage complementary strengths and resources, extending their reach and capabilities without huge upfront investments.

Managed Services Partnerships: Working with specialized service providers can help companies fill critical skill gaps, especially in fields like data analytics, cybersecurity, and cloud computing.

Emerging Technologies: Adopting advanced technologies like AI, automation, and cloud solutions can increase efficiency, improve customer service, and enable better decision-making. While these technologies may seem out of reach for smaller businesses, many tech companies now offer scalable solutions designed for SMEs.

Address the Talent Challenge

In the transformation journey, people are just as important as processes and technology. Leading companies have embraced a forward-thinking approach to workforce development, aiming to attract and retain talent that can drive change. This includes understanding the preferences of younger workers, who increasingly value flexibility, purpose, and opportunities for growth.

SMEs can gain a competitive edge by creating a culture that attracts skilled, adaptable talent. Strategies like flexible working arrangements, upskilling initiatives, and clear paths for career advancement can help SMEs compete with larger companies in the talent market.

Act with Foresight and Agility

Top-performing companies are often characterized by their leaders’ foresight and willingness to act decisively. Rather than waiting for a “perfect” moment, these leaders identify opportunities for growth and change early on and are prepared to pivot as needed. For SMEs, cultivating an agile mindset can be transformative—enabling rapid adaptation to market changes and proactive responses to emerging trends.

The Path Forward

Transformation may seem daunting, especially for SMEs navigating tight budgets and limited resources. However, the key is to start with a clear vision, prioritize key investment areas, and foster a culture of adaptability. By taking a page from top-performing companies, SMEs can build a resilient foundation that not only helps them survive but thrive in an ever-evolving marketplace.

Transformation is no longer a choice; it’s an imperative. With the right partners, technology, and a strategic approach, any organization—regardless of size—can become a leader in its own right.