A company’s ability to embrace organizational change plays an important role in the initiative’s success. However, according to McKinsey & Company, 70% of organizational change initiatives fail because of bad management or poor implementation.
As shown by these results, implementing organizational change is challenging. It requires vision, a significant budget, and a customized strategy to deliver the desired results.
The strategy used to implement organizational change depends on the company’s position, market, and current needs. Because of these variables, one strategy will not fit every business.
However, seeing how other companies successfully implemented organizational change can be beneficial. This includes why the process worked and how it can apply to your own company.
Discover some reasons and methods to successfully manage organizational change and a relevant real-world example.
Reasons to Implement Organizational Change
Effective organizational change impacts a company’s structure, strategies, culture, policies, technology, or core values. The goal is to improve performance and company growth.
Common reasons for organizational change include adapting to market changes, upgrading technology, and solving problems related to company structure and bureaucracy. Other reasons include improving processes and procedures, expanding to new audiences, and launching a company rebranding campaign.
Organizational change is required for company survival. This helps the company stay competitive.
Methods to Implement Organizational Change
- Have a realistic, tangible vision for the change. Determine what you want your company to look like. This helps create a roadmap for success.
- Embrace change management. Use the right change management model to overcome employees’ resistance to change.
- Request ongoing team and employee feedback. For instance, use pulse surveys to show employees their voices are heard. This elevates employee engagement in the change process.
- Use the proper tools. The right tools can help you keep track of your project and communicate with employees. This reduces potential problems down the road.
- Manage the project with strong leadership. Effective thought leadership helps move the company forward.
- Regularly communicate. This increases the success of your project.
Microsoft had significant internal issues with its organizational structure. It struggled to keep up with other companies dominating the search and software markets.
Internal competitions existed between major departments. The lack of partnerships was creating a toxic environment and preventing business growth.
When a new CEO took charge in 2014, they began restructuring the company. The CEO decided the products and platforms would exist as one group. This united the employees by having them focus on a small set of common goals.
Two years later, the CEO merged the original research group with the Bing, Cortana, and Information Platform teams to create a new AI and Research Group. This united thousands of engineers and computer scientists to focus on artificial innovation across all product lines.
The CEO also updated the mission of the workforce. This provided a positive sense of purpose that resulted in increased employee engagement and morale.
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