“Many leaders of big organizations, I think, don’t believe that change is possible. But if you look at history, things do change, and if your business is static, you’re likely to have issues”.
Lary Page
Introduction
Why is it necessary to transform your organization? It was one of the topics that jumped up regularly during the previous decade, beginning with the financial crisis in 2008 and concluding with the epidemic caused by COVID-19 in 2020. Based on what we’ve learned, firms need to change fast before it’s too late to rescue what has been left. Below are four common symptoms of failure that needs to be observed:
1. Falling financial earnings
Being trapped in an ineffective business model is a one-way ticket to disaster, given that earnings have continuously decreased and there are few ways to change things. If your falling incomes can’t be reversed by any other means, the time has come to change.
2. Falling in love with an outdated strategy
The preemptive strategic path is typically motivated by foresight, concern about the changing economic environment, and a desire to adapt before being forced to. However, there are occasions when you must take decisive and bold actions to change the business’s strategy before it is too late. In many cases, a newly appointed CEO will have more momentum and the opportunity to lead this transformation than an established CEO from within the company.
3. Major shifts in the structure of the industry
Changes go deep into how an industry works and how value is made and realized. It is comparable to the waves and the tides; you may attempt to compete with or swim against it, but fundamental structural changes will occur regardless of how you place your company in the market. A good illustration of this would be the steady transition from fossil fuels like oil and gas to renewable energy sources.
4. Dramatic changes in technology
Alterations in industrial structures can create rapid technological transitions, creating a faster transformational change to new ways of doing things. You may anticipate seeing many new businesses getting their feet wet, scaled-up companies giving you some hints about reshaping your business to adopt the latest changes. You can already see this happening in the transportation industry with ride-sharing, micro-mobility, and scooters, as well as in the tourist industry with sharing economies like Airbnb.
Finally, no firm is immune to change, and every organization should be well prepared for the unknown, which takes us to an important remark from Nassim Taleb, author of the New York Times best-selling book The Black Swan: “We know from chaos theory that even if you had a perfect model of the world, you’d need infinite precision in order to predict future events. With sociopolitical or economic phenomena, we don’t have anything like that”.
About the Author:
Loay Dirar, educates, writes, and advises on strategy development and implementation, as well as change management and risk management for major regional organizations in the Middle East and North Africa. He has 19 years of management experience, including ten years as a manager in multinational subsidiaries of organizations based in the Middle East and North Africa (MENA).
