Creating a change strategy before selecting individual change initiatives raises the odds of success in corporate transformations. Companies that achieve lasting improvements tailor their strategies to their performance challenges, leadership preferences, and energy sources—and adjust these strategies phase by phase as the change program evolves. Although every transformation is different, the change strategies that leading companies adopt tend to fall into six clusters that work in specific situations (see Exhibit 1):

1. Evolutionary (institution building). This strategy is about shaping the organization to foster a gradual but sustained improvement in performance. The focus is on the indirect and contextual levers—values, structure, and performance measures—that drive change through the existing power structure and top management. This long-term approach works well for successful companies with superior execution, but it is dangerous for faltering companies that need to make an immediate and bold change.

2. Jolt and refocus. Here, change is initiated abruptly, to force a gridlocked power structure to respond to threats like deregulation. This approach is designed to shake up the existing power structure, redesign management processes, delayer top management, define new business units, and redefine corporate strategy. Without such...