Organizational change is required to meet new customer needs. Climate change drove the world towards adopting green technologies. It led to the development of green transport solutions like electric cars, trucks, trains, and planes. But we know that change makes people, organizations, and institutions uncomfortable. We like routine, and a set work environment. Rapid changes are still more difficult for individuals and organizations to adapt to.
Most digital transformation projects, mainly in the public sector, fail because the workforce is resistant to change and is prone to sabotage these projects internally. Barack Obama’s initiative in reforming Medicaid failed to endure beyond his term as US President because of internal agency resistance. Ideology differences between Republicans and Democrats added fuel to the fire. Medicaid reform became known as Obamacare, and the Republicans opposed the program when they came to power in the US.
When I was researching a book on US Government Digital Strategy that I wrote for a client, I came across dozens of automation projects across nearly every US State where project failure was noted to have occurred. As a result, huge sums of public funds got wasted, and public dissatisfaction with government services continued unabated.
On the other hand, if a change becomes a normal occurrence, many of the questions about adapting to change disappear. IT outsourcing companies like Tata Consultancy Services, Accenture, Infosys, and Cap Gemini are a few examples. These companies thrive on learning new technology solutions and supporting clients with trained people that help them implement these new technologies within their corporations. Each major technology innovation leads to organizational changes within these IT outsourcing companies. New units focused on specialist new technology solutions are created with attendant compatible business processes.
Organizational changes must also be made within the recipient client companies that have decided to induct new technologies within their corporations. Business processes are modified. The workforce is pushed to retrain itself. Resistance to change is common. Those who willingly or unwillingly go through the change survive, and those who refuse either quit or let go.
There are instances in which organizational change is thrust upon a company because of market conditions. Most startups’ failure is attributed to their inability to withstand the reality of the market and make inevitable changes after they go public. These startups thrive when they are getting external funding rounds from investors looking to make a killing from their investments. You will notice Founders’ exits each time a company goes public and lists on the public stock market. Exits are also seen when larger companies acquire startups. Flipkart, for instance, saw exits in senior management when Walmart acquired them. Instagram CEO wrote a whole book on his saga as a Founder of this iconic brand. He finally exited, unable to adapt to the changes and restructuring introduced by the Facebook founders.
The Airbnb founders, however, have stayed together, and the company has continued to thrive. The company instead underwent organizational design changes to meet growing customer needs. Twitter is going through a cathartic change with its acquisition by Elon Musk. Companies survive and thrive when they embrace organizational change dictated by changes in business conditions and customer demand.
An organization under threat of survival may be forced to introduce rapid changes. If the fire-fighting mode continues for an extended period, in such organizations, change also becomes routine. The organization, in these cases, starts expecting changes and learns to exist in conditions of instability and rapid change.
Frequent changes will, however, stunt growth. The stability of business processes is missing in these organizations. The organization is constantly in a war-fighting mode. Its workforce behaves like soldiers expecting and preparing any moment for the unknown to occur. Organizational growth will occur when policy, process, and systems are stable. But change is essential for growth, renewal, up-gradation, and performance excellence. Organization and business growth lie in the balance.
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