Organizational Change; Lessons Learned from Three Companies That Succeeded

Organizational Change; Lessons Learned From

 Three Companies That Succeeded

Anthony Cevera

University of The Incarnate Word

Abstract

This paper will walk us through three companies who realized that changes needed to be made; Mircrosoft, Google, and Toyota. We’ll discuss the internal and external forces that compelled the senior leadership at these companies to implement change, and their capacity to change. All of the companies we’ll reflect on shared certain traits and issues, which we’ll compare and contrast against the eight dimensions of organizational change highlighted in chapter 2 of Judge, William Q. Jr. (2012). Focusing on Organization Change. Saylor Academy.

        Before we jump into the articles on the organizational changes that Microsoft, Google, and Toyota went through, we should first define what organizational capacity for change is. Organizational capacity for change (OCC) is a dynamic, multidimensional capability that enables an organization to upgrade or revise existing organizational competencies, while cultivating new competencies that enable the organization to survive and prosper. (Judge, 2012, p.18) In lamens terms, OCC is an organization’s ability to adapt to internal and external forces that could potentially threaten the company’s ability to exist.

        Leaders face an ever-increasing pressure from external forces to produce results. Today’s customers are smarter consumers than they have ever been. They have all the info they need to make educated purchasing decisions at their fingertips. With the explosion of technology, the newest market disruptive product is only months out and can wreak havoc on industry participants like an F5 tornado. Where leaders use to plan their go to market strategies 5 years out, has now shrunken to 2 years or less in some cases.

        Internal forces like business unit silos or ineffective middle managers can also play a major factor in whether organizations have the capacity to change. If siloed business units are more interested in competing against each other, rather than executing on the corporate vision and culture, it hampers the organization's ability to prevent and or react to needed organizational changes.

        We also need to define the 8 dimensions of change, which we’ll be comparing and contrasting our 3 companies situations.

        The 8 dimensions as defined by Judge, 2012, p20-24.

1. Trustworthy Leaders-  A trustworthy leader is someone who is not only perceived to be competent in leading the organization but also perceived as someone who has the best interests of the organization as their priority. 
2. Trusting Followers-  The overall level of trust held by the employees of the organization.
3. Capable Champion – Individuals (Change Champions) who’ve been identified and developed to lead change initiatives.
4. Involved Middle Management -  Are pivotal figures in shaping the organization’s response to potential change initiatives, so their involvement is crucial to organizational capacity for change. They are the tie-in between top executives and front-line employees.
5. Systems Thinking - the rules, structural arrangements, and budgetary procedures that facilitate or hinder an organization-wide.
6. Communications Systems – These are communication systems such as e-mail networks, face to face meetings, telephone calls, and corporate announcements that focus on the conveyance of the value and importance of proposed organizational changes.
7. Accountable Culture – The degree to which an organization holds its members accountable for results.
8. Innovative Culture - an organizational culture that emphasizes the importance of organizational change and innovation is a third infrastructure dimension.

The first company we’ll look at is Microsoft. When new CEO Satya Nadella took over Microsoft in 2014, he faced both internal and external pressures that were hampering the growth and harmony in the organization. Microsoft had been facing extreme pressure from other companies that were eating away at their market dominance. Nadella had two goals when he took over; 1) Maintain what Microsoft was good at, which was build new technology. 2) Get the company’s teams to work together rather than hold each other hostage. (Weinberger, 2017)

For the purpose of this paper, we’ll focus on Nadella’s second initiative. Microsoft, like a lot of other large technology conglomerates, grows their product portfolio through acquisition. This leads to a lot of in-fighting, siloed thinking, and competition amongst the product teams and business units. In order to combat and change this way of thinking, Nadella did something that was extremely unpopular with top executives. In one of his first executive retreats, where the company invites its top 150 executives to the mountains for brainstorming and go to markets strategy discussions. He decided to invite the founders and executive leaders of the companies which Microsoft had acquired the previous year. This was very controversial with a lot of tenured Microsoft executives, as they often had a lot more tenure than the ones just acquired. Nadaella’s second controversial move was to have these executives go see customers all together. This was met with a lot of resistance, as the executive that Nadella was insulting them by insinuating that they didn’t know their customers.