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What Is the Future of Organizational Transformation?

Organizational Transformation

Organizational transformation and agility are necessary in the fast-paced digital economy, and they will only become more relevant in the coming months and years.

This is especially true during the pandemic, which will significantly reshape the post-COVID era.

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Below, we’ll explore organizational change, organizational transformation, and the role that they will play in tomorrow’s business landscape.

The Importance of Organizational Change and Transformation

The digital economy thrives on speed and innovation – and innovation fuels disruption and change.

Those changes to the marketplace then compel businesses to change as well – and companies that fail to keep up will often lose market share to competitors who are willing to adapt.

Organizational change, therefore, is often necessary, but it is also worth distinguishing between organizational change and organizational transformation.

Organizational change refers to changes in specific aspects of a business.

Examples of organizational change include:

  • Changing a company’s strategy or mission
  • Reassigning teams or restructuring specific parts of a business
  • Making changes to a product or service

Organizational transformation, on the other hand, refers to overarching changes that fundamentally alter the organization itself.

Here are a few characteristics that define organizational transformation:

  • Multiple interdependent organizational change projects that affect the very nature of the organization
  • Complete shifts in business models and strategies
  • Major organizational restructuring

Organizational transformations are often a response to existential threats.

That is, organizations transform when the company’s very existence is under threat. During the digital age, technology-driven transformation often impacts entire industries – for some companies, transformation is the only way to survive such disruption.

As we’ll see below, however, the pandemic may drive even more transformation in the near future.

Organizational Transformation in the Next Normal and Beyond

During the digital age, as we have seen, organizational change and transformation are crucial for success.

Yet we are facing several other major economic changes that will likely drive more organizational transformation around the world:

The COVID-19 Pandemic

The coronavirus pandemic has affected the world in profound ways, creating a financial crisis that is unprecedented in our lifetimes.

To cope with the business disruptions that have resulted from this crisis, many businesses have been forced to initiate organizational change in many areas.

A few commonly implemented changes include:

  • Implementing remote working policies
  • Adopting new digital tools, such as cloud computing or digital adoption platforms 
  • Adding new health and safety measures in the workplace
  • Cutting costs and improving organizational resilience
  • Pivoting product and marketing strategies

The uncertainty of the pandemic’s economy will remain in effect for some time, and as the economy changes, companies will need to change with it.

Once the pandemic ends, however, the world will be entering a new paradigm, which will drive even more changes in the economic landscape.

The Next Normal

The next normal, a term coined by McKinsey, refers to the new global paradigm that we will be entering in the near future.

According to the firm, the post-COVID era will bring about several major changes to the business landscape, such as:

  • Shifts in customers’ and employees’ expectations
  • Changes to governments’ role in public health
  • A new regulatory environment
  • A different competitive landscape

These types of changes will require significant changes for many organizations.

Given the depth and breadth of these economic changes, some organizations will need to invest in major transformation initiatives.

Yet pandemic is not the only transformative trend on the horizon – soon, technology will propel us into a completely new era.

The Fourth Industrial Revolution

Digital technology represents only one aspect of what has been called the fourth industrial revolution.

Though digital will form one pillar of this revolution, other technological building blocks will prove essential – biological and physical technologies will also work interdependently with digital technology to revolutionize the world from top to bottom.

New and as-yet-undiscovered technologies will play a role in reshaping the next normal, such as:

  • Autonomous vehicles
  • 3D printing
  • Genetic engineering
  • Blockchain

These types of technologies will result in the formation of new industries, the commoditization of old ones, and the reshaping of the global business environment

Innovation, change, and transformation, therefore, will become even more necessary as we progress towards this new reality.

How to Prepare for the Post-Digital Future

The paradigm changes that lie ahead are not insignificant, as we have seen.

Organizational change and transformation will perhaps become mandatory the more progress that we make.

Digital technology, the machinery that runs the modern enterprise, will continue to become more and more important – in fact, companies that lack digital maturity may be excluded from the post-COVID economy.

Therefore, top priorities going forward should include:

  • Digital adoption
  • Digital transformation
  • Organizational agility
  • Enterprise change management
  • Organizational resilience

By maintaining a robust IT function and by staying adaptable, it will be far easier to stay successful as the economy transitions into a post-digital, post-COVID paradigm.

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Digital Adoption Team

A wonderful team of Digital Adoption, Digital Transformation & Change Management Experts.