The above quote has been variously attributed to Stephen Hawking, Albert Einstein and even the Dalai Lama. Whether any of those people actually uttered those famous words isn’t really important – but the accuracy of the sentiment certainly is.
Likewise, in business, you might paraphrase the quote to state: ‘a measure of commercial success is found in any organization’s ability to change’.
That’s the key – because companies and corporations that don’t react to changing standards and trends in terms of technology and customer expectation will soon find themselves bested by their competitors; those who see change and adaptation management as crucial.
Adaptation vs change
The difference between adapting and changing is important to understand. Adaptation can be seen as passive, whereas change is actively driven by the person or organization making the changes. It’s one thing to adapt to customer preferences, yet another to change the mindset of the customer to where the service provider or organization would like it to be.
Below, we’re going to look at some of the challenges involved in corporate change management and look at a couple of organizational development examples.
For example, low or zero-alcohol beverages are now becoming a commonplace preference amongst younger people in the first world, so bars, restaurants and clubs are making these drinks more widely available, alongside ‘traditional’ alcoholic offerings. That’s adaptation to a shifting market, due to forces largely beyond the control of drinks manufacturers.
However, changing people’s attitudes in order to actively encourage them to drink less alcohol is an uphill battle. Rather than responding to an already ongoing trend, the organization pushing changes, as opposed to simply going along with them, can dominate in their marketplace, so long as they succeed in their efforts.
Accordingly, the most successful organizations are those that combine change with adaptation - in effect pushing on an already half-open door. A good commonplace example of this is the drinks manufacturer Guinness, who have managed to produce a product so good that their zero-alcohol alternative pint is said even by many hardcore drinkers to be indistinguishable in taste and texture from the original product.
Adapting to a trend, then reinforcing it through proactive change, is a formula for success that any company would do well to foster. In the case of the brewery, their marketing can reflect their adaptation to cater to a younger customer base, whilst attempting to change some of their older alcohol-loving customers to try an alternative, even if it’s only occasionally.
As organizations change, so must employees, but tread carefully…
Organizational change management needs to consider the needs of employees together with those of customers. Sudden and highly disruptive changes cause burnout in employees, and if it happens more than once, people will vote with their feet and start looking for new jobs with competitors faster than you can say ‘I quit!’.
Accordingly, change management needs to be performed with the tacit permission of employees. If employees feel ‘vested’ in organizational change, they actively embrace and enact it. Conversely, change thrust on workers against their will makes them demoralized, and uncooperative, and at worst they might proactively sabotage new systems and practices out of frustration and simple spite.
Thus, organizational development must align not only systems, culture and processes with the company’s strategic objectives, but with employee engagement, and above all, customer desire. Let’s take that example of the drinks industry again.
If overnight, the CEO of Acme Booze Inc decides that 90% of the company’s products will be alcohol-free (as opposed to the current 10% level), that move will certainly satisfy all the company’s teetotal customers. This might be enough to boost sales, but much of the existing customer base will disappear, and the brand name forever tainted in the eyes of many consumers.
The upheaval in changing so rapidly in order to create new products might well cause most employees to quit as their worlds would be turned upside down in days. It doesn’t matter if you’re manufacturing cars or brewing beer, new social media marketing strategies would need to be implemented, standards and products changed, and production lines dismantled and rebuilt. It doesn’t bear thinking about.
But if the CEO is a visionary who understands change management, they will gradually instill amongst the workforce an attitude that the company is no longer a brewery, but a drinks manufacturer that produces sophisticated soft drinks, and also brews beer.
In this way, workers start to understand the new company ethos and take it on board willingly as things change gradually. Within a couple of years, 50% of Acme’s products could be alcohol-free, and the processes and culture required for a rebrand would be considerably less disruptive.
Changing gradually gives time for those who don’t accept the changes to seek new pastures if the fresh culture isn’t for them. But this is fine because people don’t suddenly quit when gradual change is forced upon them, they either join in (to a greater or lesser extent) or raise their objections through normal workforce feedback channels.
In the final analysis, companies don’t need employees working for them if their personal standards and goals don’t align with their employer’s.
The mechanics of making changes
The practice of organizational development (OD) should include a thorough, top-down initial audit of daily problems and challenges within the company.
Appropriate teams should then interact with each other (not separately!) to design interventions to address those challenges, thereby gradually implementing change initiatives, preferably one at a time where possible, whilst carefully and empirically evaluating their impact.
The reason for this ‘one at a time’ process of change makes it very much easier to assess the consequence of changes against Key Performance Indicators (KPIs). For example, imagine that our drinks manufacturer has decided to incept the sensible change management strategies we’re discussing here, and performs the initial audit of issues to be addressed.
If the production line has to be retooled to take account of different sized bottles, and labeling has to be changed more regularly due to an extended product range, how does this affect the overall productivity of the organization?
If the production line was changed AND the warehouse shelving reconfigured AND the range of bottles used expanded all at the same time, it would be difficult to assess what might be causing a lower production rate than expected. But if these changes are made one at a time, the cause-and-effect relationship is easy to establish.
It’s like making a stew, you don’t put in extra salt, more pepper, another teaspoon of chili flakes and minced garlic all at once. You add the salt then taste it. Is it OK? Great, then add the pepper. And so on…
On this note, it’s also important to remember that one team’s problem is another department’s boon. For example, Acme’s shift to zero alcohol products might mean mountains of work for the food technology and chemistry departments of the company.
But not having to pay government taxes on alcohol production would free up a huge workload for the accounting teams. Every change within an organization causes internal reactions, which, as in the laws of physics, are both equal and opposite.
Accordingly, organizational development techniques should include:
· Establishing frameworks to design an appropriate intervention.
· Careful design of learning management systems (LMS).
· Case studies of previously successful change management (from other companies is also fine).
· Definitions of relevant KPIs and how they’re measured.
· Flow charts outlining the consequences of change across the organization with positives and negatives highlighted across teams.
Real-world organizational development examples
All this theory is well and good, but only by studying what has happened in organizations that have ongoing change management strategies successfully ingrained into their company DNA can we see what techniques work best.
Naturally, the world’s biggest corporations aren’t going to publish absolutely everything that they did, when and how – such detailed information would certainly be commercially confidential, but a brief overview can provide some helpful insights.
Amazon – turning warehouse workers into computer whizzes
Amazon announced an initiative in 2019 to retrain a substantial percentage of its US employees. The cost of $700 million to upskill 100,000 workers by 2025, was meant to expand Amazon’s outreach into new areas of business. $700m amounts to spending around $7,000 per employee on around a third of the organization’s US workforce.
Amazon audited their employee numbers and unfilled vacancies, marrying this with the day-to-day problems they were encountering within the business. They concluded that the area that required the most upskilling was Information Technology (IT).
Consequently, the company centered on retraining promisingly talented people in contemporaneous fulfillment roles into data scientists, data mapping specialists, security engineers and solutions architects. The Wall St Journal reported at the time that Amazon was struggling to fill tech vacancies, with 20,000 positions open across the US.
Apparently, an Amazon spokesperson claimed that they weren’t worried about retraining workers into more highly skilled positions, because rather than leaving with their new-found skills, people tend to stick with employers that actively become involved in their professional development. In plain English that translates to ‘treat your people right and they’ll stick with you’. It appears to be a winning formula.
Starbucks’ green credentials
Worldwide coffee chain Starbucks have instigated a variety of environmentally friendly initiatives over the recent past. Such techniques include the reduction of single-use cups; instead selling insulated designer mugs that customers can keep as their own and bring them in to be filled up.
It’s like having your own car and a gas tank at a service station. The corporation has also promoted energy usage reduction and concentrated on selling only products that are environmentally friendly and don’t cause deforestation or unfair treatment of at-source supply workers.
This change management structure doesn’t specifically involve employees, aside from encouraging workers to turn lights off if possible and avoid food and energy wastage. But nowadays millennials, Gen X, Gen Z and even Boomers are keen on saving the planet whenever possible. The greener a company appears, the more respect it garners from customers and the healthier its bottom line performs.
Walmart – train more, innovate harder, perform better
Walmart at one time had a bad reputation for its online presence. When the company first started selling online in 2012, people searching for stuff they could easily find at other supermarket websites just didn’t turn up in simple keyword searches – a classic example being ‘cotton socks’ returning a page featuring cotton candy.
But in a well-managed example of organizational change, the retailer partnered with Microsoft to integrate machine learning and AI solutions running on MS cloud servers to considerably improve customers’ online shopping experiences.
To further enhance operations and cut costs, the retailer also outsourced their finance and accounting departments. By choosing its partners well, either by acquisition, subcontract or partnership, Walmart succeeded in their digital transformation projects.
In 2014, the Walmart app reached 14 million downloads in one month (more than trebling previous figures of 4m) after the launch of ‘Savings Catcher’—a facility that allowed customers to scan their receipts and compare Walmart prices to their competitors’ offerings.
If Walmart’s price was higher than the competitor on the day of purchase, customers would receive a gift card for the difference. Soon after, Walmart Pay, was released. The app was a mobile wallet that allowed for payment via the customer’s smartphone.
In summary, it can easily be seen that when strategic planning and organizational development is carefully considered, thoughtfully applied, actively monitored and comes with a good helping of common sense, great things can be achieved even by large corporations that might have previously suffered from being unwieldy.
In the final analysis, if you find out what your customers want, see if your workforce can become invested in providing it, and be prepared to change direction when necessary, everyone can make a fair profit and keep their brand reputation second to none.