Why most trading transformations fail – and how you can beat the odds

Your trading business has defined a bold new strategy and is poised to embark on an ambitious transformation programme to enable it. Yet, even with a clear vision and strong momentum, trading organisations seeking to transform their business face a harsh reality. More than half of all change programmes fail to achieve their goals. 

Transformation is rarely straightforward, especially in a space as complex and fast-moving as the world of energy and commodities. Those wishing to deliver successful business change must do so against a backdrop of market volatility, shifting regulations, and evolving customer demands. This makes transformation inherently challenging, as does the fact that their organisation’s expertise lies in trading, not delivery or transformation, meaning many trading businesses may lack the specialist competencies required to structure and deliver change effectively. 

Furthermore, operational and cultural differences can lend considerable friction around attempts to innovate and transform. When underlying business models, risk appetites, and incentive structures are not closely aligned, building and maintaining momentum throughout the delivery of change becomes difficult. This can place trading businesses at a disadvantage before transformation even begins.

Beyond these intrinsic challenges, trading transformations frequently falter due to several common pitfalls:

1. Limited strategic alignment. Too many organisations force transformations that neither naturally fit their business nor advance their core agenda. This ignores a crucial reality—each trading business is unique, and what spells success for one company could mean failure for another. Similarly, project managers may neglect the essential steps of securing the necessary sponsorship or aligning stakeholders around a shared vision for change. Without a common understanding of strategy, and the rationale behind it, at all levels of an organisation, it becomes far more difficult to guide transformation effectively and realise its intended value.
2. Misaligned technology choices. Capability and technology investments must align directly with strategic objectives. Without robust governance and upfront clarity, programmes risk veering off course in two critical ways:
   
   • Businesses invest in capabilities fundamentally mismatched to their needs—for instance, deploying real-time data platforms when their trading strategies do not require instant decisions
   • Vendor selection proceeds without clearly defining the decision criteria or linking these to strategy, leading to investment in systems that do not fully meet business requirements and create more problems than they solve.
     The central challenge lies in balancing architectural innovation with stability and reliability, ensuring technology choices genuinely support your organisation’s value generation model.
3. Competing priorities. Most organisations do not have the luxury of undertaking transformation in isolation. They will need to deliver large-scale change (which is inherently expensive) whilst remaining mindful of competing business priorities, including the need to reduce costs to remain competitive. This contradiction can also cause organisations to fall into the trap of selecting partners who offer the lowest cost, only to pay for it down the road when projects fail to deliver value, when change does not take hold, or when platforms are not fit for purpose.
4. Insufficient experience. Organisations routinely underestimate the specialised expertise needed to support large-scale transformation. They incorrectly assume that existing IT staff or business teams will be able to adequately support change initiatives, even when such efforts drastically exceed anything they have undertaken before. Without the right expertise—in the form of enterprise architects, experienced programme managers, and established governing bodies—transformation efforts lack the structural foundations needed to succeed.

The secrets of successful transformation

Trading transformation demands orchestration across multiple dimensions, with success hinging on close strategic alignment, operational rigour, and cultural evolution working in concert. The highest-performing programmes adopt a holistic approach, addressing these elements simultaneously rather than separately.

Across these dimensions, four priorities consistently separate successful transformations from failed ones:

1. Define your North Star, and align everyone around it. Success starts with a clear, communicable vision. Whether your goal is cost reduction, pivoting to a new business model, or operational improvement, your entire business needs to understand and rally around this vision. This clarity will be critical for sustaining momentum through the inevitable difficult points when stakeholders question whether the anticipated benefits warrant the organisational upheaval.
2. Remain realistic. It is crucial to know what kind of organisation you are, and what scale of change you are truly capable of taking on. Ambition is important – but you must be able to support this with the right capabilities, ensuring you have enough people with the relevant experience and skills to deliver the change you envision. By getting clear on these fundamentals, you can ensure your transformation is right-sized and right-scoped for your actual capabilities rather than your aspirational beliefs.
3. Pay attention to cultural change. Technology and process changes are visible and tangible. Cultural transformation rarely is, yet it can often be the determining factor between success and failure. Cultural adaptation and change management are often as critical as the operational restructuring itself. Organisations must consider how structural changes will cascade through every level of the organisation and impact their operating model, in order for change to be accepted and sustained over the long term.
4. Be disciplined about how you will deliver change. Organisations must have the right operational capability to execute, not merely strong strategic intent. This means establishing a robust delivery model, scoping and phasing work iteratively, right sizing your delivery organisation to match programme ambitions, and defining clear delivery methodologies. Where in-house capability gaps emerge, supplement with external teams that blend deep industry knowledge, demonstrable understanding of your business, and proven experience delivering enterprise change.  

Making transformation work for your trading business

Successful transformation requires more than a clear vision or bold ambition. Trading businesses need to think deeply and work hard to overcome the pitfalls and realise your desired commercial outcomes.

Crucially, the difference between success and failure often comes down to having the right support. Selecting a partner with lived experience of commodities trading and transformational change—one who works to understand your business and is not afraid to challenge you when needed—can help you drive transformation faster and further.

At Baringa, we have helped hundreds of trading businesses at every stage of their transformation journey, from sharpening strategy to delivering change in the best way for their business.

If you are ready to transform, we are ready to help you build the trading business of tomorrow. Please get in touch with our team to learn more.