Signs an Organization Needs a Change

It is human to resist change. Some neuroscientists believe that parts of the brain are hardwired to avoid change, releasing the stress hormone whenever a person is confronted with a new environment, concept or practice.

Yet, change is often good for business. To reduce the fear and anxiety around launching into a business change, leaders can learn how to read the cards for signs of a necessary change.

Some changes are obvious, such as the acquisition of a new company or a long-term leader stepping down. But when it comes to issues that affect the well-being of your organization, it’s best to be proactive.

Failing to plan is planning to fail, after all. So keep an eye out for more subtle potential challenges. If you take initiative and meet them on your terms, these obstacles can turn into opportunities.

Here are some good indications that an organization is in need of serious change and what changes tend to be the best for business.

#1. Leaders’ Prioritize Value for Shareholders

Companies need to be able to maintain the price of their stock, and they need to maintain other ethereal value for shareholders, like loyalty, credibility and trust. However, shareholders probably shouldn’t be leaders’ number-one priority.

Companies that put most of their energy into generating value for shareholders are likely overlooking other extremely important elements of building and running a business. In fact, a McKinsey study found that businesses become more agile when they shift away from the concept of creating value for shareholders and toward one of working with stakeholders to leverage available opportunities and resources.

Let’s take a look at some of the world’s greatest and most desired companies right now. How did they get there? Obviously for many reasons, but they have certain things in common, and whether we like it or not, their incredibly fast growth tells us they have made a lot of right decisions.

We think it’s safe to say that their business models have grown out of the energy created by the founders and people who work there. Every single employee plays its part and wants to be a contributor in making the world better. As a consequence, they make money. A lot of it.

It can be difficult for business leaders to stop prioritizing shareholder value, but it is important for leaders to recognize that prioritizing other aspects of a business will ultimately manifest as value to shareholders.

For example, leaders might focus on attracting highly talented and principled employees or developing a workplace culture fueled by passion. Ultimately, when a business thrives, the shareholders are bound to benefit, so leaders can shift their energy to more meaningful priorities.

#2. The Company Structure Has Been the Same for Years

As digital tools and services have become more available to more consumers, businesses have been compelled to adopt new systems for reaching their target audience and providing products and services.

Over the past several decades, digital transformations have been relatively slow and steady, but because the pandemic radically altered consumer behavior, more businesses are finding it almost impossible to operate without updating their processes to enhance their digital capabilities.

Many companies rely too heavily on traditional business structures, which are unlikely to remain viable in the coming years.

Market disruption is not a passing trend; it is the new status quo that smaller, younger, more digital companies will effectively replace the products and services of slower and more traditional enterprises. Business leaders need to anticipate shifts in the consumer landscape and alter the business strategy accordingly.

Adopting a digital organizational design is merely the first step toward developing a new company structure. Enabling this kind of dynamic workforce, the organization needs to be agile, and operate as a living organism.

We can all agree the world has taken on a new pace, and we find it hard to keep up with everything the way we used to. There just is not enough time for the traditional structure to work anymore.

Business leaders should examine every aspect of their business, paying especially close attention to their corporate culture. Leaders and their workforce need to align their processes, values and goals with each other and with their consumers to ensure that they remain relevant into the future.

#3. Leaders Stay Updated on Their Workforce

At first glance, this might not seem like a good reason to initiate organizational change. After all, for leaders to be effective, they need to know who their employees are and what they are doing, right?

The flaw lies in just how updated leaders strive to be. Leaders who devote too much time and energy to overseeing their workforce are likely causing disruptions, stress and other issues impacting employee productivity, which means a change is imperative for the company to thrive.

Business leaders who have a hovering habit often struggle with issues of control, and employees who lack autonomy and agency are much more likely to leave. Because most leaders’ top priority should be cultivating a talented team, leaders need to mitigate the urge to micromanage and give their workers space.

Future leaders need to have capabilities to spot and develop talent. Their passion should lie in creating talent in all team members, including the ones who are not necessarily considered talented.

Again, it might be valuable to alter the culture of the company to change leader behavior and ensure employees have the ability to make decisions and be productive without oppressive oversight.

Conclusion

Change isn’t easy, but it is often necessary. Leaders who recognize these signs in their own organizations might consider enrolling in a leadership and change online course, which will give them the right tools and techniques for navigating their business to excel in the face of change.

Also every Organization transformation is unique, it is a best practice to never become complacent in the evaluation of your culture. You need to understand what is possible, what others are doing and what can be before you decide whether some form of the change within organization would make your business even more effective.