If you want to lead a market-leading firm to a bigger future, there’s one challenge you’ll never stop facing. How to convince people to invest in a new direction when today’s business is still so successful?

One of the more frustrating examples happens in planning or budget season. You make clear the necessity of longer-term strategic initiatives. But “must do” projects to fix or enhance the status quo win out year after year.

Not only do they have urgency on their side. They also promise a quick and obvious return on investment, while the ROI on strategic renewal seems uncertain.

It’s true: strategic renewal does demand substantial investment. And the core operators in your business do need to keep spending on business as usual to produce the results your board and shareholders demand.

Strategic renewal does demand substantial investment. But it unlocks some of the most profound returns possible.

But the fact is that strategic renewal unlocks some of the most profound return on investment possible. Growth in share price, market capitalization, revenue and net income, among other key metrics, that will far outclass the competition’s results and transform your firm’s future.

To help you make the case for engaging in strategic renewal, let’s look at one example of the kind of impact you and your team can expect.

Tyson Foods: Growing Beyond Meat

Tyson Foods is one of the world’s largest food companies, and for the decades leading up to 2015, they were a meat company. In press releases and on earnings calls, Tyson consistently described itself as “a market leader in chicken, beef and pork…one of the world’s leading producers.”

By 2020, Tyson had transformed itself into something much bigger and more valuable: a global leader in sustainable protein.

This move from meat specifically to protein generally took advantage of all of the hallmarks of successful strategic renewal:

• Identifying the fundamental consumer need driving the legacy offering.

• Expanding the boundaries of the marketplace the firm plays in.

• Redeploying the business’s unique capabilities to create outsized value.

This let Tyson change the rules of the game, and set the stage to dramatically outperform.

Step One: Changing the Rules of the Game

In the US public markets, there are two clear peers to compare with Tyson’s performance. One is Hormel Foods, who like Tyson has both fresh meat and processed products in its portfolio. The other, ConAgra Brands, had become less active in fresh meat production and processing by 2015, but remained a major player in processed foods featuring meat.

These firms started 2015 similarly sized. On December 31, 2014, Tyson’s market capitalization was $15B, Hormel’s $14B and ConAgra’s $12B.

But while Hormel and ConAgra continued to invest in the legacy meat industry, Tyson invested in changing the rules of the game.

While Hormel and ConAgra continued to invest in the legacy meat industry, Tyson invested in changing the rules of the game.

They’d already known about growing concerns surrounding the healthiness, sustainability and morality of meat. Fresh research refocused their strategic vision on the more fundamental desire for protein behind demand for meat. Based on it, they defined new growth platforms that targeted that bigger consumer need and the broader ecosystem that made up its marketplace. They redeployed their assets and abilities in meat to include other proteins, and acquired capabilities in pulse processing. They diversified both their meat and non-meat offerings.

In the five years from 2015 to 2020, Tyson overhauled their positioning and messaging, their operations, their R&D and M&A strategies and their product portfolio. Their press releases, earnings calls and earned media became a consistent drumbeat of envisioning and delivering new growth through innovation in sustainable protein.

Step Two: Winning Outsized Rewards

Tyson’s new vision was rooted in fundamental truths about how their customers, marketplace and business were changing. This allowed their strategy and its execution to stay consistent throughout that five-year period, despite multiple shifts in leadership.

The public markets responded to the new value this cohesive strategic renewal promised, then delivered.

By 2020, Tyson’s market capitalization had grown 121% to $33B. Meanwhile, Hormel’s grew only 76%, to $24B. And ConAgra, having exited fresh meat without developing a compelling alternative, underperformed with market capitalization growing just 39% to $17B. (ConAgra even trailed the growth in total market capitalization of the S&P 500, which grew 47% over the same period).

Having started out roughly the same size as their former peers, Tyson’s strategic renewal allowed them to radically outperform in share price appreciation and value generation, to the tune of almost $10B.

Tyson’s strategic renewal allowed them to radically outperform.

They were no longer just one of the leading producers of meat, but now the world’s leader in sustainable protein for a healthier future. Leading the next evolution of their marketplace, they had rallied their customers, investors, partners and organization around a promising new strategic vision, and set the stage for many more decades of rapid growth.

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When change comes calling—which it always does—firms that fail to engage with strategic renewal, like Hormel, simply underperform. Those that rely on less enlightened growth strategy, like ConAgra, can do even worse. Meanwhile those like Tyson, who leverage a new, more fundamental need to create a much bigger marketplace, enjoy not only outsized growth, but lasting purpose and impact.

Is it your firm’s time for strategic renewal? Our relevance and renewal workshop can help you take stock and take charge. Get in touch if you’d like to connect.