Organizational Transformation: Definition, Elements and Tips

Organizational transformation is the process of changing a company to better achieve its objectives. Depending on the organization’s needs, a transformation strategy could look like restructuring a company with new leadership, implementing a new business strategy, addressing problems with organizational culture, or initiating digital transformation to optimize company efficiency and reach.

Organizational transformation helps companies adapt to changing markets or circumstances to gain a competitive advantage. For example, when the COVID-19 pandemic began, the companies that successfully implemented digital transformation to facilitate remote work maintained operations better than companies that failed to adjust.

Organizational transformation also benefits organizational culture—a collection of guiding practices and core values that determine employee engagement, productivity, and overall company success. In companies with strong organizational cultures, employees might prioritize productivity, which can result in high performance.

Here are a few elements that make organizational transformation possible:

• A change management plan: A change management plan is a roadmap for how a business prepares and supports its employees as it transitions. Following a change management model not only ensures that employees execute changes seamlessly, it also maximizes the advantages gained from those changes.
• A clear vision: For a successful change initiative to take place, employees must understand and agree with the end goals. The management team should clearly communicate the purpose for organizational transformation, generate excitement for the initiatives, and provide clear directions for implementation.
• Strong leadership: Create a change management team made up of a diverse group of organization-wide change leaders. Employees can sense if leadership fails to follow the company’s mission statement or stated values. Therefore, leaders should exhibit the ideal organizational behaviors and promote shared values. They should willingly discuss the culture and ensure that employees have a voice. Leaders set the tone of an organization, and if they exhibit the qualities of a healthy culture, it can inspire team members to do the same.

If you want to implement an organizational transformation, here are a few tips to consider:

• Assess your organization's current state. Business transformation begins with identifying an area of improvement. Ask yourself if new behaviors, new technologies, or new leadership would help the organization better align with its goals and values.
• Consider all stakeholders. Enhance the sustainability of your change process by involving customers, third-party suppliers or distributors, and all other organizational partners. Consider the input of these parties when developing the change management plan, and ensure everyone has a shared vision. The more excitement and inspiration that the transformation process generates, the more successful it will be.
• Focus on the employee experience. Since change processes affect employees, successful transformation efforts should optimize the employee experience by addressing aspects of the organization’s culture, structure, or methodology that need improvement. Consult with human resources personnel to determine common complaints from employees, address patterns of high turnover, and brainstorm ways to improve employee satisfaction.

Get the MasterClass Annual Membership for exclusive access to video lessons taught by business luminaries, including Howard Schultz, Chris Voss, Robin Roberts, Sara Blakely, Daniel Pink, Bob Iger, Anna Wintour, and more.