Executive Summary 

New research into the dynamics of transformation in ASX 200 firms has identified 8 Australian Transformation Champions that have achieved exceptional and sustained growth, above and beyond their peers. 

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The research, conducted in partnership by Inventium and Innosight, identified 8 firms from a range of industries that have created outsized returns and growth through a ‘dual transformation’. This means they have:

  • Transformed their core business to ensure it can thrive in an increasingly competitive environment;
  • Whilst simultaneously creating new growth engines in new markets.

The Australian Transformation Champions outperformed their ASX 200 peers from 2014 through to 2018 by a whopping seven times. An investor who had taken positions in the Champions in January 2014 would have realised a total shareholder return (TSR) of 209 per cent by January 2019, compared to just 32 per cent from the ASX 200 index.

This report explores the strategic drivers and capabilities that distinguish the
Transformation Champions and concludes that they:

  1. Are successful at dual transformation.
  2. Demonstrate digital dexterity.
  3. Are adept at pursuing growth through inorganic means such as M&A or
    strategic partnerships.
  4. Smartly structure to break the dilemma of disruption.
  5. Make and fund clear strategic choices.

Through an in-depth look at the eight Champion firms, as well as insights from executives leading and driving the transformations, this report provides lessons and inspiration for other companies seeking to navigate disruption and create new growth engines.


Even in an era of digital disruption, it is possible to outperform the market no matter whether you are a digital entrant in a hot, growing segment or a legacy industrial company in a seemingly stagnant market.

Research by Innosight and Inventium has identified eight Australian Transformation Champions that have turned disruption from a threat into a growth opportunity. In doing so, these firms have not undertaken one big monolithic change, but instead have created outsized returns by simultaneously reinventing their core business whilst, in parallel, creating successful new growth engines to serve new markets. This is not the incremental change often ascribed as transformation, but true change in substance or form transformation. The caterpillar has become a butterfly.

To better understand the dynamics of this type of transformation, all ASX 200 companies were scrutinised across three key categories:

  1. The degree to which they had repositioned their core business.
  2. The degree to which they developed meaningful new businesses.
  3. The resulting financials (revenue growth and stock performance).

The first phase of research identified 39 companies that had undertaken this form of dual transformation over the past 10 years. The second phase narrowed the list to 15, with the eight Champions selected based on a final round of qualitative and quantitative tests.

These firms have substantially outperformed the broader market over time. Between January 2014 and January 2019, they achieved a 25 percent average annual total shareholder return (TSR).

This is a stunning result compared to the broader ASX 200, which achieved an average annual TSR of only 6 percent in the same timeframe. This means an investor who had taken positions in Champions in January 2014 would have realised a TSR of 209 percent by January 2019. In contrast, the ASX 200 index returned just 32 percent returns to investors in the same period.

The eight firms are not ranked. Listed in alphabetical order, Australia’s Transformation Champions are:


The gaming machine provider and casino manager has branched into the growing market of social and digital gaming.



Traditionally focussed on fuel refining, this company is now pursuing a retail strategy including a café business with outlets not necessarily attached to petrol stations.



The mining and engineering services business has acquired facilities management
company Spotless to diversify its offerings and secure its place in the integrated
facilities management market.


This packaging company has entered a new market in visual communication solutions,
providing end-to-end services from creative solutions right to the point of distribution.

qantas-logo-png-transparent (1)

The national carrier has deftly mitigated its risks by transforming Qantas Loyalty, its frequent flyer and business rewards programme, into a cash generation machine.


This leading residential real estate portal has broadened its remit beyond advertising by launching a portal through which it can offer aligned products such as financial services, home loans and lifestyle content.

Seek_com_au_logo (1)

This global, online employment marketplace has extended its footprint to not only
offer only job search functionality, but also provide education services.


The online travel agency (OTA) has transformed from a consumer-focussed business to a B2B offering by providing hotel room aggregation and intermediary services to other OTAs.

Notably, the Transformation Champions are quite diverse. The oldest company—Orora—is 159 years old, whilst the youngest—Webjet—is a mere 21 years old. The largest—Caltex—has revenues of over 21 billion, whilst the smallest—Webjet—has revenues of 300 million. In addition, there is mix of product-oriented and service-oriented offerings in both B2B and B2C markets. Their diverse experiences, described in profiles below, offer lessons for a wide range of companies seeking to undertake transformation.


This first-ever report on transformation in an Australian context has identified five lessons for Australian businesses.

1. Transformation champions are successful at dual transformation

The eight Transformation Champions pursued a specific approach to innovation known as ‘dual transformation’. These businesses were able to successfully follow a two-track transformation process that concurrently:

  • Made their existing businesses more resilient (Transformation A).
  • Created a new business to drive growth (Transformation B).

These two transformations reinforce each other and are linked by a specific set of capabilities. This capabilities link (The C) enables the business to draw on the unique skills it has built servicing its existing market to develop an advantage in its new markets.

The concept of dual transformation emerged from the doctoral research of Clark Gilbert, an advisor to Innosight who served as CEO of a media company from 2008-2015 then President of a U.S. university since 2015. Dual transformation fuses Gilbert’s framing with lessons Innosight has learned from its field experience advising companies around the world on this topic.

Pursuing a path of dual transformation produces discrete outcomes: it allows a business to hold onto its leading competitive position in fast-changing markets and at the same time, build a new engine of growth.

Webjet is an example of this. Facing increasing competition from competitors such as Expedia and declining margins, online travel agency Webjet adopted a dual approach towards transformation. In its core flight booking business, Webjet improved its value proposition to the customer by expanding its offerings from flight bookings to include higher margin ancillary services such as travel packages, car hire, insurance and hotels.

To pursue new growth, in 2013 Webjet simultaneously launched a new B2B wholesale bed bank business, WebBeds. Today, WebBeds’ earnings comprise more than half of Webjet’s total earnings.

Reflecting on this dual approach, John Guscic, managing director of Webjet told us, “We were not comfortable we could displace well-funded global companies that were established and well-entrenched. So, we looked at the skills we had to see where else we could apply them to achieve success. We looked to the B2B hotel space. It was massively fragmented, and we knew that with the skills we had, and what we could acquire through our existing relationships we would be able to build a better mousetrap than existed in market currently. Webjet was built on the idea of delivering convenience and choice efficiently, and those tenets work equally well in the B2B world.”

2. Transformation champions demonstrate digital dexterity

These Transformation Champions are using digital technologies not just to streamline operations, but to pioneer powerful new interfaces with customers and to create new business models.

Seek, for example, is leveraging technology in its core business such as predictive analytics and AI to improve the odds of successfully placing job seekers in jobs. Additionally, automated notifications it introduced three years ago led to 2.5 million additional job applications.

Qantas has also embraced digital technology to both streamline operations and launch new business models. In its core airline business, Qantas is leveraging technology to increase fuel efficiency through advanced analytics. In its loyalty business, Qantas is leveraging analytics on its data to launch Red Planet, a customer insights and marketing business. CEO Alan Joyce said at the CAPA World Aviation Summit in Helsinki back in 2015, “big data is turning into a pot of gold for Qantas”, describing it as Qantas’s “biggest opportunity”—with 12.3 million frequent flyers and more than 30 years of consumer data, the group is sitting on a treasure trove of unique assets.

Another example is Aristocrat. In 2012 Aristocrat started creating a business in the high-growth digital gaming market. This allowed it to shift the company’s focus from a stagnating, one-off machine sales model to a recurring revenue model for digital gaming machines. CEO and managing director Trevor Croker, who was the former chief digital officer, summarized this move by saying, “We forged a growing digital footprint over the last five years to leverage further value out of our proprietary content in social casino, to foster further diversity in our earnings base and increase our exposure to fast-growing markets.”

3. Transformation Champions are adept at pursuing inorganic growth such as M&A or strategic partnerships

M&A has played a role in nearly every Champion’s transformation story, by accelerating access to new customers, markets or capabilities. Various studies of corporate M&A suggest the value it creates is at best mixed, but these Champions have built muscle around their M&A capabilities to successfully and repeatedly form strategic partnerships and make acquisitions.

Downer EDI is a demonstration of this. As part of its strategy to enter the services business and diversify away from its roots in mining and engineering, it acquired Spotless, an integrated facility services company for $1.3 billion. Through this acquisition Downer has become a leading end-to-end integrated services provider with the ability to cross sell its capabilities across all service lines.

Additionally, in April 2019, Seek invested $142 million in two global online education businesses, FutureLearn and Coursera, to Group of brokers analysing stock martek perfprmance on their monfurther strengthen its education business and increase its pool of career seekers in its core business. Commenting on the FutureLearn transaction, CEO Andrew Bassat said in a public statement, “Technology is increasing the accessibility of quality education and can help millions of people up-skill and re-skill to adapt to rapidly changing labour markets. We see FutureLearn as a key enabler for education at scale.”

Finally, REA Group has moved into financial services and home financing by acquiring mortgage broking company Smartline and forming a strategic partnership with National Australia Bank to develop an integrated property search and financing platform. Chief Strategy Officer and CEO of its Asian business Henry Ruiz summarised the rationale for this M&A as follows, “If you look at the M&A that we’ve done historically, it all aligns to the purpose, which is changing the way people experience property. We need to provide a really compelling consumer experience. That’s the air we breathe.”

4. Transformational champions smartly structure to break the dilemma of disruption.

The Transformation Champions have successfully combined unique and difficult-to-replicate capabilities with entrepreneurial energy to create growth. Crucially, they have been selective in leveraging assets and capabilities such as brand, distribution and accumulated know-how to ensure the new growth engines are not inhibited by legacy ways of doing things.

Black business people using laptop in corner officeInnosight co-founder and Harvard Business School professor Clayton Christensen noted in his seminal book, The Innovator’s Dilemma, that the decision-making and resource allocation models that successful companies build over time cause them to tend to reject or respond too late to disruptive technologies. Australia’s Transformation Champions have effectively flipped the innovator’s dilemma by leveraging just enough capabilities to gain an advantage over their competitors, but not so many capabilities that, by definition, their ability to do something new is constrained.

John Guscic of Webjet noted they overcame this dilemma through leadership alignment around the purpose. He told us “We did borrow resources from the core business, but in the main, there were few issues as the management were completely behind the vision of extending Webjet into the B2B space due to the obvious potential.”

And Caltex is leveraging its existing fuel distribution and franchise network and assets to enter the convenience retail business. As CEO Julian Segal told The Australian in 2016, “We understand in today’s world that people have very little time and convenience, so whether it be food they need to eat on the go, get delivery of parcels they couldn’t collect, or pick-up dry cleaning, many, many aspects of today’s life that consume significant time can be easily resolved by our very convenient location capabilities.” It also has plans to expand its café business to locations not only based at service stations.

In another example, Qantas leveraged its frequent flyer programme and existing customer base to launch the Qantas Loyalty business in 2007. The airline says two-thirds of all frequent flyer points in its loyalty scheme are now earned from members spending on the ground rather than from booking flights. The loyalty division made $372 million in profits in 2018—almost as much as Qantas made from its international airline business, which was $399 million.


Henry Ruiz from REA Group described the challenge of choice as follows, “We have more ideas than we can execute, and many of the ideas that are floating through actually are very credible ideas”. However, REA Group and the other Transformation Champions understand that strategy isn’t what you say, it’s what you do. This requires companies to make tough choices so they focus on the highest potential markets and opportunities.

An example here is Aristocrat. A victim of the financial crisis of 2007, in 2008 Aristocrat saw its share price plummet 60 percent on the back of an annual loss of $158 million. This forced its former CEO Jamie Odell Croker to make tough calls to focus the business on markets that could produce recurring revenue. Current CEO Trevor Croker reflected on this period, telling us “We had to make clear choices and cut all distractions to invest in our most promising opportunities.”

Making clear choices is the first hurdle. The second is to increase the odds of success by allocating the necessary funds. Innosight frequently observes in its work around the globe that those companies that are prepared to ring-fence and dedicate substantial funds to the pursuit of uncertain opportunities outside their core business are the ones that out-perform their peers. One Champion that has demonstrated this is Orora. Brian Lowe noted “In 2015 Orora put aside $45 million for growth projects. This figure was subsequently increased to $75 million and around $53 million has so far been spent on driving innovation.”


The Innosight-authored book Dual Transformation, argues that the best time to start transformation is when times are good, because leaders have the capacity to handle the twists and turns that naturally accompany a transformation journey. In contrast, by the time a company faces a burning platform, it is often too late.

We understand that the word disruption often invokes fear. But Australian companies that embrace possibility can turn the innovator’s dilemma into the innovator’s opportunity. This mindset is epitomised by REA Group. Henry Ruiz told us, “We never stand still. We have a growth mindset and we’re always open to finding a new data point that indicates whether we could improve or change if the market has shifted, which helps us better serve customers.” By adopting a growth mindset all Australian companies can become transformation champions and own the future, rather than be disrupted by it.

While the eight examples here are inspiring, it is intriguing to observe many prominent Australian companies did not make it through even the first cut shortlist in this research. There’s no doubt Australian companies face increasing competition, in many cases from deep pocketed global entrants, while others are having to confront a tougher regulatory environment.

We believe, however, that most of Australia’s companies are in the enviable position of having the necessary runway to apply the lessons of these eight pioneering companies.

In any case, Australia’s Transformation Champions provide a practical path to turn threat into opportunity. Some have proactively pursued transformation and some have been reactive, and some are further along their transformation journey compared to others. We can conclude then 1) that the common elements of their dual transformation strategies can be used in diverse settings and 2) whatever the circumstances businesses aspiring to transform face, they must first determine and align around a robust strategy.

Each of the eight Champions has done this, with the reward being an accelerated journey to create the next version of themselves. Brian Lowe of Orora reflected on what he has learnt as a leader through their period of growth and supports this conclusion by saying, “Certainly making sure that we have very clear alignment through the organisation in terms of the strategic direction of the business has been really important.”

Watch Scott Anthony on the Transformation Champions




While it’s still a leader in gambling machines, Aristocrat has become a dominant force in social and digital gaming through a serious of strategic acquisitions. It’s fitting current CEO and managing director Trevor Croker was the gaming stalwart’s former chief digital officer.

A victim of the financial crisis of 2007, in 2008 Aristocrat saw its share price plummet 60 percent on the back of an annual loss of $158 million. The company put this down to a delay in hotel spending as a result of the downturn.

Straightened times called for a new approach and its former CEO Jamie Odell embarked on a turnaround strategy, shedding costs and focussing the business on markets that could produce recurring revenue.

The $1.3 billion acquisition of Video Game Technologies was part of this push, allowing the business to access revenue from player spending on machines, in addition to selling gambling machines.

Aristocrat has been investing in digital businesses since 2012, especially those in the high-growth social gaming markets. Its purchase of social game platform Product Madness has given it exposure to people playing digital casino games.

It also entered the growing mobile game market with its $500 million acquisition of Plarium and its $1.2 billion takeover of Big Fish Games to create an integrated, world-leading gambling company.

Its new strategy has paid off. Last year revenue increased 48 percent in reported terms and to an all-time high of more than $3.6 billion and around two-thirds of revenue now comes from recurring sources. The share price has also risen substantially, with Aristocrat shares reaching an all-time high of $31.74 in 2018.

Chief executive Trevor Croker explains since the company kicked off its first business turnaround programme in 2009, a constant mantra has been focussing on what it can control to drive transformative growth in the core.

“There’s nothing unique or particularly revelatory about how we’ve gone about it—and there were no shortcuts or silver bullets. It starts with an absolute requirement to grow share. That’s been a constant throughout, up to this day,” he explains.

To grow its share of a generally flat and competitive market, it has invested in talent and product innovation.

“We also put the customer at the centre of everything we do, including through rigorous segmentation and a portfolio approach to be as targeted as possible,’ Croker explains.

His advice to other businesses focussed on transformation is to make clear choices.

Reflecting on Aristocrat’s transformation, he told us, “Over time, as our turnaround was completed, this approach has continued to deliver for us as we have continued to transform and grow our core.”

“In the last three years, we’ve doubled our staff numbers and materially increased our market presence, taking share and driving more growth through entry into strategic adjacencies and a deepening focus on customer, innovation, collaboration and leveraging our scale.”

Croker says the business has also been prepared to deploy its balance sheet to accelerate our transformation through M&A, for instance its purchase of VGT to enter a 100 percent recurring revenue, land-based market in the US, with complementary skills and capacity to grow under Aristocrat ownership.

Additionally, its acquisition of Product Madness allowed it to enter the digital market and create a new channel for commercializing its content, while also creating a toehold in an entirely new market and growth engine.

Furthermore, buying the Plarium business allowed it to consolidate its leadership position in the social casino market, create entry points into the broader social games category, and acquiring scale and core digital skills that will be key to ongoing growth.

Says Croker: “Various smaller acquisitions in the land-based business has bolstered our systems and service offer, as a strategic investment in customer stickiness and relationships.”

Its core business has also been rebuilt to be significantly broader and based on recurring revenue, in place of one-off sales that are dependent on operator capex budgets.

“Since our turnaround”, Crocker Says, “we’ve been very focussed on delivering not only superior but also sustainable returns, ironing out historical volatility and ensuring we can perform over the long term.”

Rows of Casino Slot Machines with Shallow Depth of Field. Las Vegas Gambling Theme.

Croker acknowledges there have been challenges along the way, including finding creative, technical and customer-facing staff, achieving the right ROI and oversight processes to underpin investments. Managing regulatory approvals and speeding up the development process have also required work.

Aristocrat has a flexible development model that allows it to access third-party developers and have tailored arrangements with creative studios to ensure everyone is as engaged and motivated as possible.



As a business that was once solely synonymous with fuel, Caltex has pursued a novel strategy to diversify its operations away from the more volatile parts of the energy supply chain and instead build a significant presence in retailing. The result has been much more stable revenue.

Until 2015 Caltex was 50 percent owned by US energy giant Chevron. But as part of a process to shed non-core assets when the market was in decline, the US business sold its stake in its Aussie outpost.

At the time Caltex was also suffering under stagnating revenue and a changing fuel market. The petrol and diesel markets had peaked and biofuels and natural gas were taking their place. At the same time, electric vehicles were on the rise, threatening its main source of revenue.

A decision to dramatically change the business mix helped turn around the company’s fortunes. Over the past five years, Caltex decided to focus its strategy on its two connected businesses, its core fuels and infrastructure, and its new growth engine convenience retail.

For its core business, it focusses on a “protect and grow” strategy. Caltex reduced its exposure to the unpredictable refinery sector by turning its Kurnell site into an import facility for Asian fuels, with refining now comprising 25 percent of its operations, down from 65 percent. Concurrently, it moved much more aggressively into fuel distribution and marketing, buying up its Caltex franchises in a $150 million spending spree.

At the same time, Caltex placed its bets on the growing convenience retail space, and developed a clear strategy to capture market share, which it calls “Freedom of Convenience”. Speaking to this strategy, CEO Julian Segal commented in Australian Financial Review, “We’re certainly not interested in a business that will generate $100 million or $200 million revenue, we wanted something that could generate $3 billion to $5 billion so we really have a growth platform there…” Petrol and convenience [retail] is only generating $1 out of $5 in convenience as a whole, so the scope is significant if we get outside the current offering—by expanding the offering you should be able to get significant revenue.”

Caltex also acquired the Nashi chain of coffee and sandwich shops and has plans to establish these in high street locations, not just alongside petrol stations.

Now, 35 percent of its EBIT is derived from convenience retail, with the rest—65 percent—coming from its fuels and infrastructure business.



Now a leading integrated end-to-end facility services provider, Downer’s history in mining and engineering goes back to 1933 in New Zealand. Its 2017 opportunistic acquisition of facilities management business Spotless allowed it to diversify its operations away from the typically cyclical mining and resources sectors.

The strategic about-face it performed with the Spotless acquisition has allowed Downer to better weather fluctuating commodity prices and the end of the mining investment boom through new and uncorrelated revenue sources. Commenting on the Spotless deal, CEO Grant Fenn told The Australian Financial Review, “This strategy with services will be a winner, we’re very confident of that… This business should be predictable. Our aim is to make Spotless that way.”

Spotless has so far been the cherry on a cake of acquisitions spanning 20 years, with this strategy allowing the business to enter a number of adjacencies and new services including rail, utilities, transport and communications. Acquisitions include:

  • Road contractor Technic Group
  • Road maintenance firms Bitumix and Emoleum
  • Rail business EDI
  • Infrastructure maintenance business Excell
  • Utilities operators Tenix
  • Construction firm Hawkins

This has created a leading Australasian provider of integrated engineering and construction solutions.

Importantly, with Spotless, Downer is able to mitigate any over-concentration to which it’s exposed in the mining and construction areas and diversify its offering into the public sector areas of health, education and defence.

The synergies it can now exploit across the entire group have allowed it to form a truly integrated service provider able to sell its entire offering across its portfolio of aligned businesses.



The plastic packaging business is being made over into an end-to-end visual communication solution provider, providing services right from creative solutions to distribution.

Spun out of global packaging company Amcor in 2013, Orora makes fibre, glass and canned beverage packaging. Its relatively newly-minted status as a stand-alone entity has allowed it to run its own race free of the strictures of its larger former parent.

Since the demerger, Orora has made numerous investments to bolster its operations and drive earnings:


  • $100 million investment in Australasian fibre packaging assets.
  • $42 million investment in its glass bottle manufacturing capacity.
  • $20 million customer-backed dairy sack line.
  • $45 million Global Innovation Initiative fund to improve manufacturing processes and develop new products.

Then, in 2017 it created a new business to pursue a different market. Orora Visual is a US-based end-to-end display marketing company formed by combining a number of acquisitions:

  • $77 million acquisition of POP merchandiser IntegraColor.
  • $44 million purchase of retail display firm Register Print Group.
  • $54 million acquisition of commercial printers The Garvey Group and Graphic Tech.

Brian Lowe is the Group General Manager for Orora Fibre Packaging, the largest division in the business with the biggest innovation agenda.

Lowe says Orora’s transformation journey started when it de-merged from Amcor and listed on ASX. “From there, it was about Orora forming its own identity. We inherited a business and asset base and we needed to grow from there, drive efficiencies and explore opportunities in the future. So that was the start of the journey and it’s been successful to date.”

Since then, earnings and cash flow have flourished, with around $650 million invested in initiatives to diversify the portfolio and enhance growth opportunities. Low explains the business follows three strategic pillars that guide its future.

“One is organic growth, investing in existing operations, particularly off the back of core customers. We’ve made several investments in new sites and facilities that support existing customers.”

“The second is bolt-on acquisitions, largely focussed on our North American business where we’ve expanded our geographical footprint. We have started from a relatively low market share so it’s a sound business model on which to expand.”

“The third pillar is about adjacencies; trying to find new markets and acquisitions. The business that has evolved to become Orora Visual in North America is a prime example of where we have entered a new market segment and made a number of acquisitions to establish ourselves in that market.”

Orora has also made selective acquisitions in the Australasian market, but it is new market segments in North America where the business has really expanded in different directions.

Lowe explains this journey has been fully embraced by the whole organisation. “Our board has close oversight over strategy and supports the direction we have pursued in driving transformation. Ensuring we have really good communication with all stakeholders has been important to get alignment in the business in how we identify opportunities and execute strategy.”

Growth is partly funded from the balance sheet, with a certain amount set aside for acquisitions. In 2015 Orora put aside $45 million for growth projects. This figure was subsequently increased to $75 million and around $53 million has so far been spent on driving innovation. A portion of these funds has been invested in digital printing technology in Orora’s market-leading fibre business.

“We’ll continue to make funds available for new products, equipment and process innovation, separate to funds we provide to invest in transformation.”

Lowe explains Orora has also reinvested in its core business, “We’ve invested more than $120 million over the last four years in an asset refresh programme in our fibre business. This is about ensuring we are improving our equipment’s capabilities to drive efficiencies, service quality and ability to meet the capacity needs of our customers today and tomorrow. That is a critical part of the journey.”

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Beset by all the usual challenges airlines face including big swings in fuel costs and exposure to the economic cycle, iconic airline Qantas suffered its first $1 billion loss in 2013. It had to switch things up to survive in a rapidly changing airline market where new international players were entering Australian skies and low-cost alternatives were nipping at its feet.

Enter CEO Alan Joyce and his then-controversial turnaround strategy. He took a scalpel to the business, using technology to strip $2.1 billion in costs.

The airline has achieved an aggressive cost-cutting programme that has resulted in a 15 percent reduction to its workforce. Retiring older aircraft ahead of schedule, simplifying its maintenance procedures, consolidating maintenance centres and reduced operational costs in every department have slashed expenses. At the same time, it has restructured its existing fleet, changed its layout from 22 configurations to 6 configurations over five aircraft type, achieving the simplicity needed to reduce aircraft maintenance costs.

Joyce also pursued revenue-raising strategies. For example, Qantas reconsidered its historic, but relatively less profitable European routes in favour of opening up Asian routes with higher margins.

But its coup de grâce was to make its Qantas Loyalty programme a separate entity.

Qantas Loyalty operates as a subsidiary company of Qantas with its own CEO. Qantas considered a sale or partial sale of the Qantas Loyalty business in 2009 but the plan was eventually shelved. Qantas Loyalty is one of the airline’s shining lights, providing constant profits over the years, including during its horror year of 2013.

Where once the airline points it sold were a balance sheet item, the company has pursued a new strategy selling airline points to its corporate and bank customers, which they in turn distribute to customers as a reward for their loyalty or spending. The loyalty division delivered about $300 million in profits in the backdrop of its disastrous financial results of 2013/14. It is predicted to deliver $500-600M EBIT by 2022, growing at a target CAGR of 7-10 percent in earnings from FY17-FY22. Qantas Loyalty is now a highly diversified business across financial services, health and wellness, retail, and data and marketing, and has been predicted by Bank of America to be Qantas’ biggest contributor to profit by 2020.

Qantas Loyalty now has 12.3 million members—about half the Australian population— and produces a steady revenue stream for Qantas. As Joyce said in News Corp Australia, “Qantas’s diversification, launching its own advertising agency, Red Planet, and travel card product, would help ensure its future by making it less reliant on the cyclic nature of the aviation industry.”

The group’s next foray is into digital advertising, with Qantas intending to sell data associated with the loyalty programme.


REA Group

This leading global digital property advertising company has tripled revenues over six years, substantially boosting its core operations with a unique financial services play.

REA Group operates leading real estate advertising platforms in Australia and Asia, as well as having significant investments in property websites in the US and India. The Group’s brand realestate.com.au has the largest and most engaged audience of property seekers in Australia. It started its transformation journey in 2016, creating a completely new platform that provides inspiration to people wishing to add value to their homes. The platform provides video and written content from partners such as decorators and renovators. This has generated new revenue streams that are supporting the company’s bottom line.

It is leveraging its property listings database and extensive customer base—according to its 2018 annual report the site achieved 72.4 million average monthly visits in that year—of prospective homeowners to provide home financing solutions.

At the same time, it has made substantial technology enhancements to its offering. It has created a cloud platform to capture customer data and introduced a digital tool for real estate agents, Agent Edge, which helps them better run their business. REA Group has also created a virtual reality app to allow people to immerse themselves in the properties on their platform. 

A huge adjacent step for the company is its foray into financial services, a new growth engine for REA Group. It has acquired the mortgage broking company Smartline and also has an arrangement with big four bank NAB to develop an integrated property research and financing platform.

REA Group’s traditional business, online real estate advertising, has become Australia’s largest property marketplace, now with businesses in Asia, India and North America. The DNA of the company centres on how it digitises experiences and makes them engaging and immersive, says Henry Ruiz, REA Group Chief Strategy Officer and CEO of its Asian business.

“Five years ago we began to realise people were starting to come to us for more than finding a place to live. For example, we found they were searching for, then comparing and contrasting, properties with pools. After monitoring this trend, we talked to some of our consumers and discovered some people were imagining how a pool would look in their home,” he says.

Insights such as these helped define REA Group’s push into the lifestyle market, assisting it to capture a sector that’s much broader than homes for sale or rent.

“Digital technology has enabled us to look at behaviours across different markets and find innovative ways to apply them to the property sector.”

Ruiz says the business is always transforming. “We never stand still. We have a growth mindset and we’re always open to finding a new data point that indicates whether we could improve or change if the market has shifted, which helps us better serve customers. A lot of it is about galvanising a group of people that are skilled, understand digital, understand property and operate with humility—that is our culture.”

Prioritising projects is also an important part of REA Group’s approach to transformation. “We have more credible ideas than we can execute. The measure for us is meeting a market need that is time-sensitive and being pragmatic around delivering an experience in a way that satisfies, and ultimately delights, our customers.”

Helping people who are considering selling is a great example. “We thought people were really price sensitive; in that the price of their home was their number-one priority. But in fact, when it comes to selling your home, the biggest question is the real estate agent with which they should partner. Managing emotions, as well as maximising financial outcomes, are equally as important and that’s something with which trusted agents can help.”

REA Group is well down the path to expand its Off Market business, which provides a comprehensive view of the property landscape in Australia and Asia.

“Hong Kong is an example of where we’ve had to shift our thinking. There are very few single-dwelling properties and a lot of high rises, so we’re building websites that have all the relevant property and neighbourhood information for every building,” Ruiz explains.

REA Group has undertaken a number of acquisitions to help develop the business. For instance, it acquired a property data firm called Hometrack, which allows it to provide deeper information and insights to consumers and banks to help both make better financial decisions.

It also has plans to continue building the business in Asia. Ruiz cites Indonesia as an example. “It has the highest audience of Instagram users in the world and has an enormous population. Yet the way property is advertised is where Australia was 10 years ago. So the long term opportunity is enormous.”

“Some of our M&A activities are focussed on acquiring and integrating assets that allow us to realise benefits straight away, while others are long-term plays. Asia is a classic example of the latter.”

Seek_com_au_logo (1)


Seek has proven it’s prepared to pivot when it needs to, with outstanding results for both its core and new growth businesses. Seek’s traditional business is a leading global online employment market, which was a dominant player until it was unexpectedly disrupted by the entry of business social media platform LinkedIn to the market, as well as the arrival of new digital players including large US operator Indeed. LinkedIn was a threat given its huge reach compared to Seek, and Indeed has a much larger global footprint. Management recognised action was required in the face of these threats.

In its core business, Seek has switched the way it measures success from increasing the number of job seekers and employers on its site to lifting the number of successful matches between hirers and job seekers. It has also invested in predictive analytics and launched automated job notifications to applicants, which promoted more than 2.5 million additional job applications.

One of the most interesting aspects of Seek’s operations is its new growth engine—two businesses in the education industry. The first is Online Education Services (OES), an online programme manager that partners with universities to offer online degrees. Seek’s second new growth engine is Seek Learning, which provides job seekers with independent education and career insights to help them meet their career objectives. Both its core and its new businesses have allowed Seek to pursue a transformation pathway.

CEO Andrew Bassat explains transformation is in Seek’s DNA. “The board and management team are always thinking about how we can solve our challenges—it’s part of our mindset.”

Bassat says Seek recognised it needed to achieve scale and to stay ahead of the competition—this was both an opportunity and a threat.

“The Chinese market was our original growth engine and our biggest risk. This is now bigger than the Australian business. Entering the education market was in recognition we could do more with our core business. There’s enormous disruption in the education market and jobs are disappearing. So people need to re-skill through education and training and we have a role in this.”

Bassatt says the business has always been willing to take risks. “China is a good example. We entered that market in 2001 before we were even profitable, which happened in 2002. Growth has been funded from the existing business, although we have taken on some debt and done a small capital raising.”

Acquisitions have been a big part of the company’s strategy across the education and Asian and Latin American markets. “We tend to take a minority stake with a business initially to make it better, increasing our control over time.” 

Bassat says Seek intends to continue to take risks through acquisitions and says it’s important to have dedicated resources to make a successful transaction. “It’s hard to do this part time, you don’t do as good a job compared to when you have proper project resources.”

He stresses the business is not pursuing growth for growth’s sake. “It’s about building a good business.”



Online travel agent Webjet’s annus horribilis was 2013, when it faced a 30 percent share price drop versus a 13 percent rise in the benchmark ASX 200 index. Management had to act, faced with a storm of competitive threats including the arrival of new digital players such as Expedia, stagnant growth and falling margins in its core online flight booking business. It has subsequently transformed its core operations and successfully entered an adjacent market.

Webjet overturned its traditional core online travel booking portal business by dramatically improving its value proposition. It began offering higher margin products such as car hire, travel packages and insurance. Subsequently in 2016, it acquired Online Republic, a business that allowed it to expand into the motor home and cruise holiday markets. In 2018, revenue from its ancillary businesses accounted for 27 percent of total revenues.

At the same time as it overhauled its core operations, Webjet started a completely new business, WebBeds, which allowed it to enter the B2B market by aggregating pools of hotel beds. This business, which was initially funded with resources borrowed from the core business, is now a global player in this market, supported by a slew of acquisitions including Sunhotels in Europe, FIT Ruums in Asia and a global business JacTravel. In 2018 transactions were in excess of $1.3 billion and WebBeds made up 39 percent of Webjet’s total revenues.

Commenting on why the business explored growth opportunities outside its core, managing director John Guscic, explains that had Webjet pursued a strategy to extend its market-leading online travel agency beyond Australia and New Zealand, it would have meant competing against well-funded, established, well-entrenched global brands, and they were not comfortable with that.

“We looked to the B2B hotel space, as some of our leadership had previous experience in that vertical. It was massively fragmented, and we knew with our skills and the skills we could acquire through existing relationships, we would be able to ‘build a better mousetrap,’” he says.

Guscic says it was easy to get the board and leadership team aligned because the vision and opportunity were clear and the prize significant. He also credits the company’s entrepreneurial spirit with its success.“

“As they get bigger, many companies lose the qualities that make them successful. Most companies and people become more conservative, and potentially become fearful of losing the success they have achieved. They attempt to take or retain more control as the business grows. But what we have tried to do is the opposite. We put our trust in our people. We decentralise as much of the organisation as possible so decision making is as close to the customer as we can get it.”

Webjet sets strict targets and objectives for the business. “We give them the resources and let the team go for it. One of the main lessons I have learned is nothing can replace trusting and empowering your team if you want to deliver an asymmetric outcome to your peer group.”


Scott Anthony 2017 - 400 x 400Scott Anthony, a senior partner at Innosight. Read Scott’s full biography.





Andy Parker - 2017- 400 x 400Andy Parker is a partner at Innosight. Read Andy’s full biography.





Pontus Siren - 400 x 400

Pontus Siren is a partner at Innosight. Read Pontus’ full biography.





RahulRahul Nair is a manager at Innosight. Read Rahul’s full biography.





Teng Yang (TY) TangTY Tang is an analyst at Innosight. Read TY’s full biography.





Special thanks to the Innosight analysts who helped with this report: Adi Jain and Rachel Lee


Global strategy consulting firm Innosight, co-founded in 2000 by Harvard Business School Professor Clayton Christensen, has a team of more than 100 people around the world. We collaborate with the world’s top companies to create and accelerate growth strategies. Innosight has a focus on the Australian market and helping Australian organisations undertake dual transformation.

Senior Partner Scott Anthony, who is based in Singapore, is the lead author of the seminal book, Dual Transformation: How to Reposition Today’s Business While Creating the Future, which underscores Innosight’s philosophies.

This Australian research follows on from the T10 research report that ranks the 10 global companies that have achieved the highest impact business transformations over the past 10 years.


Inventium is a leading Australian innovation consultancy. Its science-based methodology has helped more than 200,000 people become better innovators. It offers skill-building workshops, keynote addresses, consulting and assessment.

The business is skilled at creating a culture in which transformation thrives and its clients operate all over the globe.

RESEARCH methodology

Candidates for Australia’s Transformation Champions were identified by screening ASX 200 companies for businesses that had:

  • Achieved strategic transformation.
  • Impacted customers and the industry over the past decade.
  • Potential to sustain transformation over the next decade.

During the first phase of the research, Innosight consultants reviewed the ASX 200 companies and identified 39 companies that had undertaken strategic transformation over the past 10 years. The team reviewed each company and measured:

  • Financials (revenue growth and stock performance).
  • The degree to which the firm had developed meaningful new businesses.
  • The degree to which it had repositioned its core business.

During phase two, comparative metrics were used to select 15 companies for further analysis. Companies whose transformation story revolved purely around digital transformation, or that had achieved growth in only adjacent spaces without a significantly different business model, were removed from the sample to arrive at the final eight firms.


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