Positive Change in Successful Organisations

Positive Change in Successful Organisations

It is almost cliched to say that change is the only constant. Yet most of the large organisations today have kept pace with changes in the industry to stay relevant. While in retrospect it is easy to see how the organisational leadership saw the need to change at the right time, it is not always easy for even the best of the leaders to foresee the need for change. Take for instance the example of Kodak. From being one of the most successful organisations, to completely disappearing from the landscape, the organisation has seen the entire life-cycle. There are other organisations too, such as IBM that have witnessed significant decline in growth and yet somehow salvaged themselves from completely vanishing. On the other hand, there are also organisation such as Phillips that have constantly reinvented themselves to stay relevant to the business.

When an organisation is doing well, leaders as well as the employees do not see any need for change. In fact achieving success after years of  hardwork makes people really resistant to change. Once they find the secret of success, organisation wants to adopt the template to ensure success after success. However, in a business environment that is so dynamic, it is very important to understand that the need to change. 

While, bringing about change in the organisation may be the responsibility of the top leadership, it is also equally important to design structures and process in the organisation that make it easier for people across levels to sense the need for change. Structurally this is possible when the organisation and the context in which it functions is seen as a system with permeable boundaries. This means that the organisation pays close heed to what is happening outside the organisation and accordingly makes changes to adapt to the dynamic landscape. Internally too the boundaries between teams and functions need to be permeable. This does not mean that the division of work gets diluted. It only means that there is enough scope for transfer of information and resources across the various groups in an organisation. Job rotations and forming cross functional teams are one way of doing this.

Another important aspect is to be aware of the assumptions and the purpose of the business. While the core of the business may not change, the assumptions must be in-line with the current realities. For instance, the purpose that Kodak's leadership must have in mind would be to provide the people with a means to capture their memories on paper. But the assumption that the market would not change was misleading. Thus once the leadership is clear about the purpose, they must reflect whether the assumptions that underlie the vision represent the current business realities. The process underlying this rethinking of assumptions involves exposing people to new possibilities through generative questions. 

Finally, an organisation must be tolerant of new ideas. Often large stable organisations may resist new ideas and the culture may be shaped in a manner that it rewards people who are consistent performers and don't rock the boat. While it is great to have stability, intolerance of new ideas can lead to missing out on new ideas.The power of being open to new ideas and giving people a chance to take calculated risks have been demonstrated to give great results at both Google and Microsoft. This also entails recognizing that the outliers may not always be disruptive and may actually have valuable inputs. 

Keeping these few principles in mind, it becomes easy to make sense of the need to change. The next challenge then lies in deciding what part of the system should be focused upon to drive home the need for change. For most organisations, a focus on one or more of the areas mentioned below would help in bring about change successfully. These are explained below:

1. Challenge the  Assumptions: For the deepest change to take place, the core assumptions that drive the business need to be challenges. For instance, when Microsoft acquired Nokia, they reinvented the brand by challenging the assumption that  a Nokia phone really needed a third OS when there were already two extremely power OS available to the buyers. As Nokia shifted to Android, the business picked up significantly. This change in assumption reflected the new business realities in which the same provider need not necessarily provide both the hardware and software.

2.Challenge the technology: Technology has to be an enabler to support the business operations. The classic example of result of not paying importance to technology is the emergence of online platforms for movie distribution. In face of rapid wave of technology upgrade, most movie distributors did not shift to online model. Netflix as a new player challenged the technology and disrupted the business of not just its competitors but also created a completely new business model.

3. Challenge the way of Management: Finally, in large companies there is often a legacy way of doing things. It becomes difficult to completely turn around these ways. However, at Starbucks, the leadership team did exactly this to reinvent the organisation after the economic depression of 2008. They completely changed the way the Cafes functioned, operations at the store as well as the way the supply chain was managed. With shifts in the way of management, the organisation returned from the brink to emerge as a large global organisation that today sets the rules for the beverages industry.

Thus even the best organisations need to change continually. Challenging assumptions, technology and management helps create positive restlessness and the need to move to a new goal. However, change can be daunting in such organisations because this would require making shifts in the absence of a looming threat. Without such a visible compelling reason to change, the consultant must navigate to galvanize organisation to see an envisioned future that is better than the current reality.