Organizations have been forced to embrace change at a faster rate than ever in wake of Covid-19, digitalization, energy crises and many other disruptions besides. Many businesses will feel that they have become more agile as a result. There’s no doubt that change is one of the few things that is constant, and we must remain in a state of readiness for whatever comes next. But when these truths are applied to the complexities of an entire organization, the challenge is exponentially tougher, and more advanced strategies are required. That’s because organizational transformation applies to every aspect of operations, from customer service to sustainability and governance.
But what is organizational transformation, really?
Put simply, it is how a business is taken from its current position, to where its leaders desire it to be it in the future. It is a way of tackling and addressing current and future problems to make the organization more resilient, by looking critically at metrics, data, experts’ opinions. By collecting tangible information, a business can develop a strong idea of how to transform, and can avoid making unnecessary or poorly thought-out changes.
Critical Aspects of Successful Organizational Transformation
• Changes in the business should be aligned with the desired goals and outcomes
• Organizational transformation should result in positive changes to company culture
• It is a process through which you’ll discover new ways to work and more agile, scalable, adaptable processes that are optimized for the future
• It involves making changes to software, hardware, and all sorts of digital infrastructure and processes
Organizational Transformation and Digital Transformation
Anyone with a few decades of workplace experience will recognize how dramatically things have changed since the introduction of the computer, mobile phone, and internet. Workflows have been transformed, communication is faster, hierarchies are often simpler as a result.
Digital transformation has been the key to the incredible growth of thousands of businesses. Those that have been able to adapt the best and welcome technological developments have benefitted the most. Knowing which innovations to implement and recognizing novelties that should be avoided is a real challenge. But whenever an organization saves time and operating expenses, and improves efficiency through the use of technology, they position themselves for success.
Aside from productivity, employee retention is a major concern for employers. Digital transformation has the potential to help here, too, enabling new working practices that improve employee satisfaction.
Phases of Organizational Transformation
If organizational transformation was a quick, easy process, every organization would be doing it. But it can take months or years, depending on the desired outcomes. And there are bound to be obstacles on the route.
There are four recognized phases that most organizational transformation passes through.
Resistance
Change often faces resistance. The larger the organization the greater the chance that someone within it will fear that change threatens their position or that it will alter their preferred ways of working. In such cases, people may respond with resistance. Therefore, it’s vital that leaders clearly communicate the reasons for, and benefits of transformation.
Adjustment
Clearly communicating the reasons for, and benefits of transformation creates opportunities for employees to have their say in the adjustment of the organizational transformation. This both earns the support of employees and improves the outcomes of the transformation by considering the input and experience of a wider range of stakeholders.
Acceptance
Once the adjustment phase is successfully completed, resistance begins to ebb away. With goals, objectives, and a clear vision in place, transformation is able to gather pace.
Consistency
Transformation counts for nothing if it is not done in a sustainable way. Implementation must be consistent, all new practices and processes must align with the organization’s vision and mission.
Why is Organizational Transformation Important?
To become and remain successful, any organization must be able to look introspectively and identify things that can be done better. Acting on this self-knowledge will make the difference between being a leading organization and being one that gets left behind by the competition.
It is true that practically all businesses experience some kind of change all the time. But the tendency is to be reactive, responding ad-hoc to movements in the market, world events or moves by competitors. Organizational transformation allows businesses to act strategically, staying ahead of events and being the agent of change, rather than being at its mercy.
Areas that are Impacted Most by Organizational Transformation
Company culture
Does your company culture align with your values and those of the people you work with, and can more be done to bring them closer together and reap the benefits?
Performance efficiency
Can traditional models continue to function in the new business world, or is your business in need of modernization?
Competitive advantages
Organizational transformation can set your organization apart from others that look and work similarly. Consider ethics, sustainability, branding, and other ways that businesses set themselves apart.
Impact on the market
Serving the market well is a core objective of any business, but times of volatility and uncertainty can shine a light on the organization, set the pace for competitors, and attract better talent.
Adaptability and managing change
HR plays perhaps the biggest role in organizational transformation, guiding all other employees and departments through the required changes and breaking down resistance. We’ve explored this topic in more detail in our Industry Insights section.
Laying the foundations for a better future
We’ve outlined the importance of making business-wide changes to remain progressive, modern, and aligned with the world we live in. Your business can achieve the most ambitious goals by undergoing change and can reap far greater social and financial rewards than ever before. And it can be done in a responsible, sustainable way. Of course, challenges will be part of the package, with resistance, training, buy-in, adoption, and communication all being significant stumbling blocks.
Once all the obstacles have been overcome and the transition is made, your organization will have better foundations than ever before to serve the market and its employees.
