Organisational Change: What Is It?

It may be challenging for decades-old organisations to shift cultures, but there will always be a way if there’s a will to embrace change. Here we identify the five most significant examples of organisational change.

1) Digital Transformation

Digital transformation integrates digital technology into various aspects of a business, from changing its daily operation to delivering value to its customers. As a result, it changes how organisations welcome their new customers onboard. Introducing Artificial Intelligence (AI) into your service, transitioning to the cloud system, or integrating a new Customer Relationship Management (CRM) strategy into your businesses are some of the several prime examples of digital transformation.

2) Reshaping Your Role

As organisations adopt innovative products or solutions to enhance their efficiencies, employees may experience a change in their roles. Due to automation and cost reductions, reassignments, layoffs, or outsourcing may occur at the workplace. Consequently, it becomes more challenging for Human Resources to ensure high employee satisfaction.

3) Onboarding New Leaders

Changes in senior leadership happen for various reasons, including business growth, expansion, maturity, slow down or decline. Thus, introducing a new leader, whether it’s a new CEO or Business Development Manager, may help shift gears to focus on improving its product, operation, and even productivity. In other words, new leadership may allow companies to achieve their business goals sooner than targeted.

4) Organisational Restructuring

While changes might further enhance businesses to a certain extent, they might be detrimental to the employee experience due to stress and uncertainty resulting from leadership shakeups and redesigns. Thus, employee disengagement, declining productivity, and misaligned company culture may occur during the transformational process. Hence, a ground-up restructuring of the organisation and its process may be the best move forward if done diligently and intentionally with all stakeholders’ buy-in.

5) Merger and Acquisitions

Companies may undergo merger and acquisition processes, whether it’s to expand business operations or to lower production costs. When two different business cultures are combined, both parties must adjust their business strategies to achieve their new corporate goals mutually.

An organisation of the future is the one that truly understands the changing dynamics between the business, its people and customers, and the ability to handle continuous change by being agile and adaptive to the market environment.

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Examples of Organisational Change

To stay at the top of their game, companies must embrace organizational change successfully, despite how tough it may be. According to a recent survey from McKinsey & Company, more than half of companies undergoing digital transformation encountered slowed progress during the transition. There are various reasons for derailment, including vague corporate goals and business strategies, lack of commitment towards the new set of organizational goals, misaligned cultures and strategies, and poor resource management. Less than half of the companies could regain their business momentum and achieve their corporate goals as they managed to address the challenges. Let’s dive into some great examples of organizational change to uncover what companies did and how they managed to pull through it.

Toyota’s Success Story

One of the most well-known successful transformation stories is the Toyota Production System (TPS) – the philosophy which organizes manufacturing and logistics at Toyota. TPS is known as “lean manufacturing”, created by its founder Sakichi Toyoda, his son Kiichiro Toyoda, and Toyota Chief Engineer Taiichi Ohno. The main focus of TPS is to eliminate waste in manufacturing processes, ensure minimal inventory, and pivot when improvements are required. TPS has made Toyota a top-notch international automotive producer, leading other companies to adopt this lean operating approach.

Meanwhile, there are other examples of organizational change which weren’t so successful. There are various reasons for this failed transformation, including the inability to satisfy customers needs, being outperformed by competitors, neglect of employee input upon developing new business strategies, and unclear organizational vision and mission. Let’s take Motorola as an example.

Related: Change and Disruption: Fight It or Embrace It?

The Fall of Motorola

Motorola was once the biggest mobile phone manufacturer. Still, its market started to decline when Motorola missed the disruptive innovation due to an over-focus on sustaining improvements in its legacy products. As a result, Motorola lost its throne in the mobile market as its competitors offered more advanced affordable features that satisfied the market demands.

From the above business transformation stories, it is clear that Toyota has done something right. It demonstrates the importance of organizational change for companies to stay on top of the game.

This article was originally published on necole.tech.

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