Like individuals, organizations change continuously, reacting to developments in their markets and to the arrival and departure of key people. In a large company, these changes go on more or less unnoticed. But sometimes a company must change more quickly than this gradual evolution allows; it needs a break with the past, an accelerated pace of change—a transformation.

Successful corporate transformations and their leaders—Lou Gerstner at IBM, Ferdinand Piëch at Audi, John Reed at Citibank—become the stuff of business legend. Transformed companies have achieved unprecedented competitive power, a pride in everything they undertake, and outsized returns to shareholders. What chief executive officer wouldn’t want all of these things?

Most transformations in noncrisis conditions fail: both attitudes and behavior remain unchanged and ambitious targets slip downward

Rather oddly, it is the leaders of companies in crisis who may be best placed to achieve a true transformation. David Simon and John Browne could transform British Petroleum from one of Britain’s weakest industrials into one of its strongest because the company faced imminent ruin. Steve Jobs rescued Apple Computer from collapse. By contrast, most transformations undertaken in noncrisis conditions end up failing: employees’ attitudes and behavior remain unchanged, ambitious targets slip downward,...