What does organizational transformation mean?
Many corporate leaders are considering organizational transformation. In order to boost organizational productivity and corporate culture, clever managers are continuously seeking new chances. During periods of transition, such as the ones we have encountered due to the pandemic, this effort is of the utmost importance. It is also when organizational transformation becomes an important component in determining longevity.
If your company is at a crossroads between being stagnant and being sustainable, then organizational transformation techniques are the way to go.
Your employees are the first and most important people who are impacted by any kind of transformation. Human resources must play a pivotal role for this reason.
Below, discover how human resources may make a difference in the success of your organization’s transformation.
So, where does the term “organizational transformation” fit into the corporate world? Organizational transformation, according to ORG, is a strategic approach to moving your company from where it is now to where it needs to be in the years to come. This transformation is often necessary to solve an issue or make a long-overdue adjustment.
The objectives of an organization’s transformation might be multi-faceted and in line with those of the company as a whole, including:
- Streamlining and improving business operations by modifying current procedures and routines
- Revamping the business ethos
- Modernization through data
One aspect of digital transformation is being abreast of and even ahead of technology trends. By cutting down on expenses and increasing efficiency, any business may gain a competitive edge through the use of the correct technology.
To successfully transform a company, one must be nimble enough to respond to changes in the industry, technology, and the workforce, and to change course as required. In order to get everyone from A to B, the company’s culture needs to be flexible while still holding fast to its distinctive principles.
As an example, a company may realize that its high staff turnover rate is a direct result of the overwhelming amount of work that employees are required to do. In response to this trend, the company’s upper management and HR department have decided to implement sweeping changes to the way employees are structured and compensated, as well as new technological tools to make formerly labor-intensive processes more efficient. The company becomes a more efficient and fruitful workplace as a result of everyone’s hard work.
The departure of a key client or a sharp decrease in income are two further causes that could prompt a company to undergo a transition.
Just how important is it to prioritize organizational transformation?
There are numerous reasons why organizational transformation is essential. It’s crucial to the success of the organization and the results of the business.
Every company goes through development and transformation cycles, so now is a good time to assess current performance and map out future goals.
Some important areas that are affected by organizational transformation are:
Improvements in performance
Using antiquated organizational structures and methods, how effective is your business? In order for a firm to reach its full potential, this is usually the part of the business that requires the most transformation. 53% of leaders claim that moving to a team-based work style has significantly improved performance, according to Deloitte research.
Values held by employees
Is the culture of your business a true reflection of what people in the community, buyers, and workers actually experience? If that’s not the case, how can you bring your company’s culture in line with its fundamental principles?
When HR is able to measure the right metrics, they can pinpoint issue areas like excessive turnover, low motivation, and declining work quality. A cultural revolution can help with all of these.
Effect on the market
An organization’s focus should be on creating a revolutionary influence on the market it serves if it wants to thrive in unpredictable times. In terms of the company’s commitment to social responsibility and its efforts to equip its people for a brighter future, this can involve setting a high standard.
An edge over the competition
Transformative thinking can help any company get an edge in the market. Businesses who are known for their strong brands, ethical practices, and good management will be the ones to beat. If you want to know when and what needs to change, an evaluation is a great place to start.
Managerial shifts within organizations
In your company, how is change handled? It is inevitable that a business will undergo changes, and human resources is well positioned to help others adapt. With this information in hand, you may assist staff in overcoming their aversion to change and successfully implement a new organizational paradigm.
Process of organizational transformation
For an organization’s transformation to be a success, what are the necessary elements?
There are three steps to a successful organizational transformation, according to Kurt Lewin’s famous Change Management Model. Lewin is a German-American psychologist. The following are the steps:
Step 1: Unfreezing
At this point, the organization’s leadership has successfully planted the seed of doubt that something needs to change for the better.
There are two parts to this process: first, admitting that change is necessary, and second, promoting new habits that will replace the old ones.
Right now, human resources is very important for finding and sharing data that shows a need for change. When morale is low and turnover is high, for instance, it could be time to shake things up in the company’s culture.
With the backing of upper management, this propels productivity- and profit-driven transformation.
Step 2: Transitioning
Having gone through this lengthy process, the organization has overcome any resistance to change. Desired new behaviors trump unwanted old ones.
Organizational frameworks are fluid, with frequent changes in leadership and the reallocation of responsibilities between departments. In order to guide employees through a particular change action, specialists, mentors, and role models are required. During this time, there is usually training for new technologies and ideas, which gets everyone excited about learning new things and moving forward.
When it comes to keeping things clear, conveying change, and handling any resistance, human resources plays a major role.
Step 3: Refreezing
An organization’s transformation is complete when the changes have settled in and become the standard. Along with a new set of principles and standards, all employees and leaders incorporate behavioral modifications.
When employees are having trouble, managers and HR collaborate to provide coaching. The new organization has a promising future.
The function of human resources and corporate executives in bringing about organizational change
In what ways may HR experts and company executives aid in the development of their respective organizations? According to studies, leaders and (high-ranking) HR personnel play a crucial role in bringing about long-term transformation. Eighty percent of human resources experts think that senior management is essential for a successful organizational transition.
Organizational leaders, including those in human resources, have an important role in fostering change for the better.
Give it a try:
- Carrying out one’s plans with precision
It’s critical to know why the change is happening, where you want it to go, how it will affect the company’s results, and when you’ll know it’s a success. A well-defined goal increases the likelihood of a successful transition by over 80%, says BCG.
In order for executives and employees to grasp the “why” behind the change, it is necessary to develop and communicate a clear purpose, vision, and set of objectives. Furthermore, it encourages their support for the change.
For instance, ConsumerCo, a globally recognized brand, saw a rise in its stock price after appointing new executives to formulate and convey the company’s future vision and objectives.
- Comprehensive change management
No silo can accommodate transformation. Rather, it has to be an all-encompassing strategy that takes into account different parts of the company for it to work.
For instance, if you want to revamp your processes to be more collaborative and agile, you should think about how it will affect your company’s structure, the technology you’re employing, and any talent gaps that could emerge.
When undergoing organizational transformation, Genuity employed this approach, which prioritizes respecting the work that has already been done as well as the reasons for and significance of that work for each individual.
- Formulating an approach and a blueprint
Make a plan for how you will change the company. Remember to begin with the final goal in mind and work your way backwards through the entire company. Having a strategy with a schedule makes the process of transformation more tangible and aids in staying focused.
For the sake of argument, let’s pretend you’d like to raise X% in employee satisfaction, performance, and productivity by replacing inefficient workplace technologies with newer, more efficient platforms. In your planned sequence of events, you will conduct preliminary tool research, send requests for proposals, meet with vendors for demos, choose and purchase the appropriate tool, install it, and train your staff to use it.
- Setting priorities
Changing everything all at once isn’t feasible. Rather than trying to juggle too many priorities, focus on the things you really need to do first. For instance, instead of introducing three new technologies to the office all at once, adopt them in stages.
Along the way, the transformation strategy can also undergo some changes. If that’s the case, take stock, make adjustments to the strategy, and rethink your priorities.
- Participation of leaders and interested parties
For a process to be successful, it is crucial to involve the important stakeholders. Find out who they are right from the start, and make sure they know their part in the transition and why it’s happening. To top it all off, effectively outlining roles and duties can result in a 70% boost in transformation success.
- Spreading the word about how great the change is
Keep the change process open and honest. Throughout the company, not only to the important stakeholders. If there is opposition to the change, it will be less of a problem to overcome.
Create a strategy for formalized communication; include all relevant details, such as the new company’s structure, in it. Give your staff a chance to voice their questions and concerns and make sure the conversation is two-way. You may set up brief one-on-ones or a town hall meeting, for instance.
- Maintaining harmony at the top
It is critical to have complete consensus amongst all executives regarding the change’s objective and scope. When differences of opinion arise, it’s important to discuss them openly, find a solution, and adjust the strategy accordingly. Do not put it off until after the fact; act now.
- Making the transformation process centered around the employees
Your organization revolves around its employees. Prioritize their requirements and keep them updated on the status of the transformation. Like Accenture did for one of their clients, this may also involve rearranging teams and removing outdated, inefficient hierarchies that hinder progress.
Getting employees on board and increasing the likelihood of success during organizational transformation and beyond requires an employee-centric approach.
- Assessing development
Find out what you’ve accomplished thus far, what lies ahead, and whether you need to change course with its guidance.
Utilize data, collect input from staff and consumers, and monitor the efficacy of this long-term transformation. Your objectives should guide the metrics you choose to track your development.
Using the previous example as a guide, you can track software adoption over a set period of time, along with improvements in employee satisfaction, performance, and productivity, if you’re working on updating your workplace tools.
- Building a solid foundation for peak performance
For VF, an apparel firm, building a high-performance management team was key to changing the industry. The program, which over 200 managers took part in, improved results across the board for all brands and regions. They have integrated this into their high-performance culture.
Now it’s your turn
Organizational transformation, when executed well, improves both performance and corporate culture. Having said that, transforming an organization is no easy feat. That is why, in order to succeed, businesses must focus on their employees while breaking it down into smaller portions, setting goals, and having a clear vision and strategy.
