Virtually all of the Silicon Valley tech giants can serve as excellent illustrations. After all, most of them have undergone explosive growth and extensive change.
Below, we’ll look at 3 of the biggest names in the tech industry.
But before we do, let’s cover a few basics.
Organizational Change 101: A 1-Minute Primer
Organizational change can be categorized in a few different ways, depending on who you ask.
The categories below are useful because they are straightforward and understandable. And we can use them as tools to learn from the examples that come later.
- Strategic – A business changes its fundamental business approach, strategy, and tactics
- Structural – A change in the organization can include hierarchical change or even a shift towards a different type of business structure, such as a “flat” structure
- Developmental – Optimizing workflows and processes, such as through the adoption of digital technology, robotic process automation, and so forth
- Cultural – This change revolves around cultural change or behavioral change
Changes can occur as a result of various factors, internal, external, or both. Such causes can range from downsizing to mergers to digital adoption.
In many instances, an organization will undergo multiple types of changes at once.
An acquisition, for instance, could simultaneously cause all 4 types of changes mentioned above.
Below, we’ll see how these categories play out in real-world situations.
3 Examples of Organizational Change
The first example is of an organization that has expanded exponentially since its inception, and only continues on its upward track.
Google is one of the largest, fastest-growing companies in history. As such, it is undergoing continuous change.
Google’s most recent, ground-breaking restructuring was the emergence of its parent company, Alphabet.
A few years ago, Larry Page announced that Alphabet would be the parent company behind its subsidiaries, including Google, Nest, Fiber, Google X, and Calico.
This restructuring allowed Google to maintain brand integrity, while its owners could pursue other, unrelated business objectives.
However, even after this split, Google itself continues to grow and undergo constant reorganization.
Knowing that almost 70% of change efforts fail, Google team members put their heads together and did some research. They wanted to avoid that fate.
They studied a variety of change management models, from Lewin to ADKAR.
However, because these models required an end goal to aim towards — and because Google didn’t have an end goal — the search giant created its own change management model.
Google’s model revolved around 4 questions:
- Why – The reason for the change
- What – The vision for the change
- Who – Those impacted
- How – How the change will be executed
According to Think with Google, this model has greatly helped employees understand and implement change. It has also helped the company avoid unnecessary change.
A somewhat painful example of organizational change can be found in Yahoo.
When Marissa Mayer took over as CEO in 2012, she faced a daunting challenge. The stodgy old company had no vision, no direction, and no apparent future.
Her fight to save the company often earned her scorn from employees and the public alike.
Examples of her controversial initiatives include:
- After her appointment, she immediately brought in her own people and ousted many of the existing managers
- A ban on telecommuting, which met with a great deal of friction and ridicule
- A performance review system that placed employees on a bell curve — those at the low end were to be fired
- She overhauled Yahoo properties multiple times during her tenure
Despite some claims that she made some improvements to Yahoo traffic and its core apps, most agreed that her changes did much more harm than good.
After her 4 roller coaster years in the CEO’s chair, Verizon finally purchased Yahoo and Mayer left the company.
Microsoft’s third CEO, Satya Nadella, has been pushing for cultural change ever since his appointment in 2014.
Microsoft’s cultural shift is changing business as usual. pic.twitter.com/KQaCVzEjqG
— CNET (@CNET) August 20, 2018
In an interview with McKinsey, Nadella explained his reasoning.
According to him, “for a successful company, you will have to overemphasize [creating] the right culture so that you can continue to cultivate new capabilities and new concepts.”
Nadella acknowledges that Microsoft is an old company and that all ideas run out of steam at some point.
This shift, he hopes, will give the company some new juice.
Since his appointment, Microsoft has undergone a number of changes that extend beyond culture. For instance:
- Microsoft now embraces open source
- Its revenue exceeded $100 billion for the first time in 2018
- His investments in cloud technology put Microsoft neck and neck with Apple and Amazon for being the first $1 trillion company
Great contrasts have been made between Nadella and his predecessor, Ballmar, who stifled innovation and change.
These examples of organizational change are just a few of the many that can be found in Silicon Valley.