Learning & Development

Organizational Change in The Era of Compressed Transformation

Being an effective and inspiring leader today is different from before the pandemic. Executives must now juggle increasingly nuanced expectations from employees while responding to urgent and complex global events.

organizational culture

As leaders guide their companies through uncertainty, they are also facing the “Great Resignation” as voluntary turnover in the workforce continues to spike. A study from Microsoft this past March found that 41% of the global workforce would consider leaving their current employer within the next year, and the U.S. Bureau of Labor Statistics reports that 4 million Americans quit their jobs in July 2021. Leaders are now faced with a dual challenge: how to retain their talent while delivering on their business goals in the face of global crises.

Meeting the Challenge Head On

While there is no singular solution to solving these strategic tensions across different companies, here are some steps to help business leaders meet these challenges head-on.

The diagnostic phase: Identify behaviors and practices that will deliver the biggest impact.

The COVID-19 pandemic is not the root cause of the “Great Resignation” but rather the catalyst for many people to reevaluate their work. These issues have been bubbling up for years, and solving for them requires organizations to look inward and identify what in the system is failing to meet employees’ needs. There are various organizational dimensions that must be analyzed, including:

  • Purpose: Purpose-driven work has become increasingly important when it comes to retaining employees who want to feel as though they are making a contribution to something that matters, especially for younger generations of workers. Ask yourself: What is the purpose and direction of my organization, and how is that reflected in each function?
  • Agency: Similarly, a lack of autonomy and agency at work can lead to underperformance and resignation. If employees feel as though they are not trusted to perform the job they were hired to do, they might feel their job is undervalued. Think: How are our employees’ contributions recognized and rewarded?
  • Connection: Employees often look for personal connections with their colleagues and managers and value a culture of care and empathy in the workplace. Evaluate: Is there a strong commitment to building relationships and connections across my organization?

Identifying which areas are lacking across an organization’s structure and culture may seem, on the surface, to be the simplest part of reorganization. In reality, turning a critical eye inward is often the most difficult. It is important to remember that these issues are not simply the result of ineffective leadership but rather the organizational system as a whole. To drive change, companies must first understand the barriers standing in the way of delivering effective support for employees and, therefore, of future growth.

The design phase: Build cross-company collaboration.

After the diagnostic, leaders can design systems and frameworks to solve for the most important challenges. There are two contrary trends that are often faced by leaders seeking to create a more connected organization.

  • Trend one: Building a more integrated, collaborative system of operations to increase the value of synergy across all facets of the organization and markets. The need for a more global organization is achieved by building horizontal systems to promote high-value collaboration, aided by shared technology, data platforms, and cloud-based systems.
  • Trend two: Empowering localized decision-making to foster a closer connection to the consumer. This approach creates smaller, more accountable teams within the larger system that act with degrees of autonomy from one another. It can also lead to a sharpening of boundaries between different business units and geographies within the organization.

These conflicting strategies are driven by complex strategic forces in today’s business environment. Both can motivate employees. The first fosters cross-boundary communities, and the second drives empowerment. Therefore, they must be employed thoughtfully, and the tension between the two must be acknowledged. If members of leadership do not create clarity for their employees—through clear roles and accountabilities, trade-off and decision-making criteria, structured networks across organizational boundaries, and metrics that make collaboration rational and easy—employees may lose confidence, feel frustrated and confused in their role, and become disconnected from colleagues. All of these sentiments are driving forces of the Great Resignation. 

This shift must therefore be led by leadership teams at all levels. Specific tools leadership teams can use to implement this change include the implementation of organization wide forums to promote collaboration and an investment in technology to make engaging with cross-company teams and departments seamless.

The Execution Phase: Model new behavioral expectations through senior leadership

When it comes to shifting the culture of your company, you cannot rely on simply setting new guidelines and expecting your employees to follow them. Employees and consumers increasingly expect transparency and genuine commitment from leadership and will no longer accept what they perceive as superficial commitments. In “Networked, Scaled, and Agile,” Greg Kesler, Michele DiMartino, and I discuss the importance of well-designed metrics, rewards, and accountabilities for creating a system that helps run the operating model of a company and drives the right degree of collaboration. The goal is to create an organizational system that not only delivers on the strategy but also creates a work environment that allows employees to collaborate with purpose and clarity. A thoughtful combination of mechanisms that make new behaviors easy and rational, combined with clear behavioral expectations, can enable leaders to lead change together.

Act Now, Thrive Later

The current trend of resignations triggered by the COVID-19 pandemic is unlikely to be the only of its kind in the coming decades. It signals that organizations need to be designed not only to execute on complex strategies but also to connect and motivate employees. Good diagnostics, intentional design to connect across boundaries, and leaders who are enabled to model new behaviors are the keys to compressed organizational change.

Amy Kates is an organization designer. She advises CEOs of corporations, nonprofits, and government leaders around the world. Her focus is on building dynamic organizations that are the best in their industry and provide great work environments. In addition to consulting, she has co-authored five of the leading books in the field and teaches at Cornell University.