To stay at the top of their game, companies must embrace organizational change successfully, despite how tough it may be. According to a recent survey from McKinsey & Company, more than half of companies undergoing digital transformation encountered slowed progress during the transition. There are various reasons for derailment, including vague corporate goals and business strategies, lack of commitment towards the new set of organizational goals, misaligned cultures and strategies, and poor resource management. Less than half of the companies could regain their business momentum and achieve their corporate goals as they managed to address the challenges. Let’s dive into some great examples of organizational change to uncover what companies did and how they managed to pull through it.
Toyota’s Success Story
One of the most well-known successful transformation stories is the Toyota Production System (TPS) – the philosophy which organizes manufacturing and logistics at Toyota. TPS is known as “lean manufacturing”, created by its founder Sakichi Toyoda, his son Kiichiro Toyoda, and Toyota Chief Engineer Taiichi Ohno. The main focus of TPS is to eliminate waste in manufacturing processes, ensure minimal inventory, and pivot when improvements are required. TPS has made Toyota a top-notch international automotive producer, leading other companies to adopt this lean operating approach.
Meanwhile, there are other examples of organizational change which weren’t so successful. There are various reasons for this failed transformation, including the inability to satisfy customers needs, being outperformed by competitors, neglect of employee input upon developing new business strategies, and unclear organizational vision and mission. Let’s take Motorola as an example.
The Fall of Motorola
Motorola was once the biggest mobile phone manufacturer. Still, its market started to decline when Motorola missed the disruptive innovation due to an over-focus on sustaining improvements in its legacy products. As a result, Motorola lost its throne in the mobile market as its competitors offered more advanced affordable features that satisfied the market demands.
From the above business transformation stories, it is clear that Toyota has done something right. It demonstrates the importance of organizational change for companies to stay on top of the game.
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- Adam Hartung 2014, Motorola’s Road To Irrelevance – Focusing On Its Core, Forbes, viewed 2 August 2021, <https://www.forbes.com/sites/adamhartung/2014/08/06/motorolas-road-to-irrelevancy-focusing-on-its-core/?sh=45cd758e442a>
- Hans News Service 2019, Why Motorola Failed, The Hans India, viewed 2 August 2021,<https://www.thehansindia.com/my-voice/why-motorola-failed-514187>
- Robert C. Byrd Institute West Virginia’s Manufacturing Technology Center n.d., Lean Manufacturing Made Toyota the Success Story It Is Today, RCBI at Marshall University, viewed 2 August 2021, <https://www.rcbi.org/updates/lean-manufacturing-made-toyota-the-success-story-it-is-today/>
- Startup Sapience n.d., The Rise and Fall of Motorola, Medium, viewed 2 August 2021, <https://startupsapience.medium.com/the-rise-and-fall-of-motorola-f4a20646b47f>
- TINYpulse n.d., Organisational Change Done Right: Examples From the Giants of the Industry, TINYpulse, viewed 2 August 2021, <https://www.tinypulse.com/blog/3-examples-of-organizational-change-and-why-they-got-it-right>