A satirical article in the Onion titled “CEO Unveils Bold New Plan To Undo Damage From Last Year’s Bold New Plan” parodied the serial transformations that occur at many corporations. Leaders often blame uncontrollable factors—policies of previous administrations, hiring for a boom that fizzled unexpectedly, macroeconomic uncertainty, the rise of artificial intelligence—but all too often the real strategic issues go unaddressed. Rather than revitalizing the organization, the constant shake-ups breed change fatigue that drains employee morale. Customers and suppliers, uncertain which strategies will survive next year’s pivot, grow wary of long-term partnerships. Investors fear greater risk and discount future earnings. Leadership’s time and financial resources flow to organizational cleanups and restructuring charges instead of innovation and value creation.

We are not saying that transformations are never necessary. We have assisted in many successful ones, making fundamental changes in a company’s strategy and operations in order to cope with major shifts in the environment (such as the emergence of a radically new technology or disruptive competitors) and reposition the business for enduring success. The potential payoff of those kinds of transformations is clear. Consider China’s BYD, which evolved from a battery maker in 1995 to an automaker in 2003 and by 2024 had surpassed Tesla to become the world’s largest producer of electric vehicles. A well-designed and executed transformation can redefine an entire industry.

However, our experience with hundreds of successful and unsuccessful change programs suggests that the best way to manage transformations is to minimize the need for them. The purpose of this article is to help executives whose companies are addicted to transformations break the cycle and to assist others in avoiding them in the first place. We explore how to continuously strengthen the business through steady, integrated strategic adjustments—so that progress compounds naturally and the need for future upheavals declines.

Drawing on both our work and that of others, we describe how companies such as Boston Scientific, Pixar, and Microsoft developed strategies that have consistently achieved superior results while minimizing traumatic transformations (large-scale programs that radically alter the core strategy, structure, or operations of an organization) by creating and continually cultivating the business equivalent of a thriving, adaptive biological ecosystem. When that ecosystem is healthy—evidenced by the organization’s ability to constantly sense shifts, prune unproductive activities, and nurture new growth avenues—transformations are rarely needed, and when they do occur they are more productive. The organization continuously evolves in sync with the real world—confident in the direction of travel and energized by the opportunities ahead. Here are four practical actions to cultivate that kind of self-renewing system.

[Here is the first.]

Similar to other complex living systems, businesses constantly contend with unpredictable forces that favor the fittest and most adaptable competitors. Our research finds that successful business leaders are masterful systems managers. Whether or not they use that term, they adapt their entire business system to thrive in dynamic environments. They optimize the performance of the whole rather than focusing on individual pieces in isolation, understanding that the total value of a company isn’t just the sum of its parts, it’s also the value of the synergistic relationships among those parts. These leaders respect uncertainty and talk in terms of scenarios and probabilities rather than indisputable predictions. They regularly conduct experiments to expose their ideas and strategies to low-risk reality checks. They relentlessly update information, and when new data invalidates a prior assumption, they revise the assumption rather than protecting egos. Skillful systems managers embrace disagreement as a sign of engagement, not disloyalty. They turn the entire organization into a self-correcting organism: one that can navigate shocks and opportunities faster and better than its disjointed rivals can.

As we described in a previous HBR article, a successful strategy in a complex business system strengthens seven essential elements and the strategic fit among them (see “The Power of Strategic Fit,” HBR, March–April 2025). When any of these elements weakens or falls out of alignment, performance suffers. MIT’s classic beer-distribution simulation game demonstrates the dangers of misunderstanding systemic dynamics: A small, temporary change in customer demand often prompts players to take wild swings that make problems worse. Each well-intentioned but isolated fix magnifies the imbalance rather than solving it. Similarly, if leaders neglect or misread underlying systemic problems and launch misguided transformations that treat individual symptoms rather than the overall system, or if they overreact to a single element and make changes that throw the system further out of alignment, problems multiply and plunge the organization into a cycle of chronic transformations.

The recent history of Boston Scientific, a medical technology company, clearly illustrates the power of systems management to break free of serial reinventions. Before Mike Mahoney became the CEO, in October 2012, the company’s strategy had been, according to Mahoney, to “win cardiology” by increasing scale and squeezing costs. A $27 billion acquisition of Guidant in 2006 aimed to accomplish that goal quickly but added heavy debt and led to product recalls, litigations, and few synergies. Successive rounds of cost-cutting trimmed thousands of jobs yet failed to revive growth. Structural flip-flops, such as merging divisions only to quickly separate them again when synergies proved elusive, broke collaborative relationships and eroded stakeholders’ confidence in management’s judgment. A decade of constant transformations produced only disappointing results. By October 2012 the share price had fallen almost 90% from its 2004 peak; an organization once known for outstanding innovation had become slow, risk-averse, and disengaged; and Mahoney became the fourth CEO in just over three years.

In interviews with us, he described how he set out to improve performance through steady systems management, which he calls “brick-by-brick management.” His approach has minimized traumatic transformations by maximizing the strength and alignment of the seven elements of a successful strategy.

Mahoney quickly bolstered the organization’s intertwined purpose and ambitions. He updated the product-centric pledge to “improve the quality of patient care…through less-invasive medical devices” to a future-oriented statement: “Advancing science for life.” He then hardwired the statement and clear strategic imperatives into dashboards, bonuses, and storytelling that drove daily decisions rather than merely decorating office walls. Knowing that employees were exhausted by chasing pipe dreams that never materialized, he decided against another audacious five-year “stretch plan” that might excite Wall Street but would certainly dishearten the organization. “We replaced unrealistic hype with realistic hope,” he explained. “We developed pragmatic ambitions to go from shrinking 2% per year to growing 2% per year over the next three years. The plan’s realism rekindled the organization’s belief that progress was achievable and within their control, while laying the foundation for bolder ambitions as confidence and capabilities grew.”

Aware that the growth of Boston Scientific’s products and markets had peaked, average selling prices were falling roughly 15% a year in some key product categories, and disruptive competitors were stealing share, Mahoney realized that staying the course meant the company would face a treadmill of transformations that would lead to serial layoffs and declining morale. Instead he reshaped the portfolio, steering resources into faster-growing, less-commoditized categories so that teams could play offense rather than defense.

He also reengineered what had been one of the company’s major competitive advantages: its innovation capabilities. The company made a commitment to consistently spend about 10% of revenue on R&D, and it launched a corporate venture arm to make small, early-stage bets on promising innovations that could grow into bigger strategic initiatives. This venture arm was paired with a nimble business-development team to serve as a dealmaker for later-stage acquisitions and to integrate successful ventures and acquisitions into the organization. These investments had to lift growth in priority therapy categories, offer an upside that dwarfed the downside, capitalize on Boston Scientific’s technical and commercial strengths, and unlock clear synergies across the existing system. The investments also had to align with key macro forces—aging populations, the rise in treating patients outside of hospitals, and sustainability—so that every new product would play into favorable reimbursement and regulatory currents.

Mahoney changed the organization’s mental model from “playing not to lose” to operating the way a startup does—embracing uncertainty, increasing experimentation, expecting disappointments, celebrating successes, and continually discovering new opportunities to win. He also revamped Boston Scientific’s operating model: He dismantled the company’s bloated bureaucracy and pushed decisions down to global business unit leaders, giving those “mini-CEOs” full ownership of strategy, performance, and resource allocation.

He designed every initiative to grow stakeholder value. Physicians and patients have benefited from the company’s innovation initiatives, including more than 20 Institutes for Advancing Science, where healthcare providers learn to improve quality through education, training, and product simulations. Employees enjoy greater respect and autonomy along with a compensation program that ties bonuses to both firm growth and personal performance, and many employees receive equity grants that give them more upside in the firm’s long-term value. Boston Scientific partners closely with strategic suppliers, who enjoy increased visibility across the company and receive first consideration for new business. Communities benefit from better care and the money ($89 million in 2024) that Boston Scientific donates to fund medical research, fellowships, education, and charitable organizations. And shareholders have collected the compounding benefits.

The results of this systemic strategic approach are impressive. Since Mahoney took over in 2012, the company’s annual revenue has more than doubled, increasing to roughly $17 billion in 2024. Market capitalization has climbed from about $8 billion to around $150 billion as of June 2025—nearly a 19-fold increase. Innovation is once again a powerful advantage. Boston Scientific has appeared on Clarivate’s Top 100 Global Innovators list for six consecutive years. Glassdoor recognized the company as one of the Best Places to Work, first in 2018 and then again in 2019, 2022, and 2024; and in 2024 it recognized the firm for the first time as one of the Best-Led Companies. Mahoney’s approval rating on Glassdoor exceeds 90%. In characteristic humility, he told us that he is pleased with the progress but is never satisfied. “We still make lots of mistakes and have plenty of room for improvement,” he said. “The difference now is that we don’t need radical, painful fixes anymore. We have a high-performance team with a winning spirit, and we just keep improving every part of the system every year.”

Mahoney broke the chronic transformation cycle by starting with the hard work that leaders often postpone: a comprehensive redesign of the whole business system, followed by continual adaptation to maintain the strategic fit among its elements. He avoided treating symptoms with quick fixes that seem decisive but merely push problems to other parts of the organization. He created commitment, rather than triggering resistance, by aligning all elements of the strategy to make better results for the company more rewarding, fulfilling, and sustainable for everyone. We found evidence of that fact in how clearly and consistently Boston Scientific’s stakeholders now use the same phrase Mahoney does to describe the company’s culture: “a winning spirit.”