However, it’s the decision to infuse a higher purpose into the culture, one that guides strategic decisions and gives clarity to everyday tasks, that has propelled these companies to success. hbspt.cta._relativeUrls=true;hbspt.cta.load(443262, '211817e1-cddd-4833-a221-8d4591462397', {}); Standardize customer service after new chairperson taking charge. In the end, what truly paid off for Google (now Alphabet) was the long-term vision Page had for the company, which drove him to lead a change management initiative for the good of his organization. Well, that’s exactly what Google did when it became Alphabet. Microsoft's organizational transformation and new purpose. Organisational Transformation is more likely to succeed when the organisation is willing to accept the change — which in itself is more likely if the planned change is integrated well with existing organisational control systems and culture. After being named CEO in February 2014, Satya Nadella undertook a major restructuring of the tech giant to eliminate its destructive internal competition. His communication effort arose a sense of urgency within the company and prepared them to embrace change. To make this happen, their current digital transformation journey includes becoming a customer experience organization, laying the foundation to achieve their goal of connected enterprise. We always urge you to read the methodology carefully. Every company needs to embrace organizational change if they want to stay at the top of their game. Yahoo. ORGANIZATION AS FLUX AND TRANSFORMATION 2. organization as flux and transformation • Gareth Morgan viewed an organization as part of the ebb and flow of the whole environment, with a capacity to self- organize, change and self-renew in line with a desire to have a certain identity. When the firm now known as Ørsted divested its oil and natural gas businesses and began phasing out coal, that created a giant earnings gap that urgently needed to be filled. “It had to be a radical transformation; we needed to build a new core business and find new areas of sustainable growth. Without a sensible vision, a transformation effort can easily dissolve into a list of confusion and incompatible project and can take the organization in the wrong direction or nowhere at all (Kotter, 1995). This means that every Alphabet’s company is now responsible for its own expenditures and income. At its best, business transformation is a move to own the change that is sweeping an industry. Organizational change is a long journey, one that doesn’t really ever end, and there’s a lot you still need to learn. The course focuses on skills managers need to adapt to current sweeping changes in the nature of work and the workforce, in business organizations and their roles in society, and in the institutions that interact with work, particularly the labor market, community and family-centered groups. While both products are very successful, the stagnation put the company in a dangerous “comfort” zone. By looking at examples of other companies that have successfully enacted organizational change initiatives, you can get a better idea of what successful change management looks like — and use that information to inform your own internal initiatives. British Airways is the largest airline in the U.K. as a result of merging with four other companies. Through its Tencent Education business unit, the firm is now developing educational content and services for individuals, schools, and education management. Over the course of two years, Lord King had replaced over half of the company’s board. The tech giant was stagnant and rife with internal wars between major departments that often viewed each other more as competitors than partners within the same company. All of this growth helped Tencent become the first Asian company to surpass $500 billion in market valuation. And on top of that, the oil crises of the 1970s shrunk the airline’s customer base, which, in tandem with its huge staff, resulted in massive financial losses. Microsoft products and platforms would no longer exist as separate groups. But the company wanted them to try anyway. The #1 company, Netflix, is a case in point. Imagine growing so much that you need to break yourself apart to work better? This level of staffing was — even then — viewed as precariously oversized. But the chairperson always communicated honestly and frequently to manage the change. As of today, Microsoft’s restructuring is still in progress. Page broke up Google into different companies, all of them owned by a new umbrella corporation called Alphabet. Think that sounds unbelievable? Projections for the year 2030 showed that 70% of the world’s GDP would be based in water-stressed regions, California and Southern India being prime examples. Alphabet is about businesses prospering through strong leaders and independence.”. Within 10 years, the airline reported the highest profits in its industry: $284 million. For us to be hugely successful we have to be a focused passion brand. “Our strategic plan was to sell more of what we had,” Baker says. In the early 2000s, when Douglas Baker Jr. became its CEO, Ecolab was an 80-year-old firm growing 10% annually by selling industrial cleansers and food safety services. Siemens moved beyond a purpose of maximizing shareholder value to a mission of “serving society.” This transformation began in 2014 with a plan called Vision 2020 that called for harnessing technologies such as AI and the Internet of Things. Fortifying this new view, the Business Roundtable last month released a statement signed by 181 CEOs stating that serving shareholders can no longer be the main purpose of a corporation; rather, it needs to be about serving society, through innovation, commitment to a healthy environment and economic opportunity for all. He repaired the airline’s image by bringing in a new marketing expert and hiring Colin Marshall as the new CEO in 1983. We looked at the shift to combat climate change, and we became one of the few companies to wholeheartedly make this profound decision, to be one of the first to go from black to green energy.”. Page sits at the top as CEO of Alphabet, with Google co-founder Sergey Brin as president, and long-time Google exec Eric Schmidt as chairman (who left Alphabet in 2020). That’s why strategic transformation may be the business leadership imperative of the 21st century. Google splits up under the Alphabet umbrella. Being a “giant” company isn’t always good. Each of these companies developed new-growth businesses outside its traditional core which have become a significant share of the overall business. When Marissa Mayer took over as CEO in... Microsoft. It was all connected, to an extent. To increase profits, King decided to restructure the entire organization by reducing its workforce from 59,000 to 39,000, eliminating unprofitable routes, and modernizing the fleet.