Corporate transformation sits at the top of the strategic agenda for many CEOs. Yet although the stakes are extremely high, there is surprisingly little hard research supporting the design and execution of transformations. As a result, they are often guided by beliefs that are anecdotal rather than empirical. It’s time for a more evidence-based approach, as we argue in a new article in MIT Sloan Management Review.

We analyzed financial and nonfinancial data of all large U.S. public companies with a demonstrated need for fundamental change, as evidenced by a severe and protracted deterioration in total shareholder return. Our analysis reveals that leaders must be ready to transform their companies: At any given point in the 12-year period we studied, 32% of large firms were experiencing a severe deterioration in TSR. And it reveals that success is increasingly rare: By 2012, only 25% of such firms were able to outperform their industry in the short and long run after the point of deterioration, down from approximately 30% in 2001.

However, our empirical research also reveals several factors that can help business leaders improve their odds of success. We examine the evidence for what works in transformation and what doesn’t.