When times get tough and people are being laid off, remaining workers become very fearful. However, in 2020, the company has significantly invested in high-margin drive-thru pickup lanes that it calls Chipotlanes. These drive-thru lanes exist primarily for mobile pickup orders, which means more customers can be served in a short amount of time, and it caters to customers concerned about COVID-19 because they dont have to go into the store. In 2015, Google announced a reorganization and the creation of its Alphabet holding company to solidify its lead as one of the worlds most successful tech innovators and expand into new industries. Dubbed WSJ2020, the reorganization was announced as a plan to move away from outdated editorial processes and shift the focus from print to digital. For much of its history, IBM had been one of the worlds top manufacturers of computing machines, computer equipment and mainframes. Net sales remained relatively unchanged at $3 billion compared to the same period last year. By looking at examples of other companies that have successfully embraced organizational change initiatives, you can get a better idea of what successful change management looks like and use that information to inform your own internal initiatives. Under the new structure, the company will be organized into four key business segments, a move that is intended to position the company for global expansion, more technological innovation, and the creation of more diverse content for its audiences. Many companies must reinvent themselves to survive and prosper beyond the Great Restructuring, and in many cases that transformation is already underway. 7. Disney creates theme park magic and movies that captivate both young and old, and it is also taking steps to compete with the likes of Netflix and Amazon in direct-to-consumer streaming. Schultz then reinvented the company again when he returned as CEO in 2008. 2. By continuing on our website, you agree to our use of cookies for statistical and personalisation purposes. As a result of the comprehensive balance sheet restructuring, iHeartMedia's debt has been significantly reduced - from $16.1 billion to $5.75 billion. 3. 3. To stay on top of all the news impacting your small business, go here for all of our latest small business news and updates. "Our strategic plan was to sell more of what we had," Baker says. Theres no one size fits all strategy that every company can use to make organizational change a breeze. A Western Union office in Lisbon, Portugal. Today, the Starbucks app is the most regularly used loyalty rewards app among major restaurant chains. The tech giant was stagnant and rife with internal wars between major departments that often viewed each other more as competitors than partners within the same company. But the company wanted them to try anyway. The announcement also makes Payless the first of at least 14 companies that sought bankruptcy protection since the start of 2016 to successfully complete the legal restructuring process. Otherwise, your competitors will leave you in the dust. Eventually, Reddit became wildly popular and was bought by Cond Nast, the owner of 20 other brands and media like Vanity Fair, Vogue and The New Yorker. Smith first proposed the idea behind FedEx in a writing assignment for one of his classes at Yale University, for which he earned a C. During the first two years in business, the company accumulated enormous amounts of debt due to rising fuel prices and was at the edge of bankruptcy. Since debuting as the Computing-Tabulating-Recording Company more than 100 years ago, IBM has undergone major transformations. But at the same time, it wasnt. Learn more. No one knows what the future holds, but these real-world examples prove that reorganizations work and can help companies achieve their long-range strategic goals. , Contributor, started as an online retailer for physical books, reinvented itself and what it was best known for, 2020 decision to split into two companies, changed the entire entertainment landscape, convinced the owners of Starbucks to sell it, How to Write a Business Plan for Inventions. Probably the most well-known turnaround success story is the rise of tech company Apple. Firms have allocated insufficient inventory across customers to create a win-win situation, addressed dipping service levels with partners and improved end-to-end cost to serve. Slack, a popular business collaboration and chat application, began as a company called Tiny Speck that made a computer game called Glitch. By 2005 business was booming Netflix was shipping out a million DVDs daily. Here are 10 examples of companies that successfully reinvented their business. The companies on the list have infused a higher-purpose calling into the culture, and this helps guide big decisions and give clarity to everyday tasks. When funds dwindled down to just $5,000, Smith decided to fly to Las Vegas and gamble with the last of the money in an attempt to double it. This year, Neiman Marcus and J.C. Penney joined the ranks of some of the biggest retail bankruptcies on record, including Sears, Toys R Us and Circuit City. For much of corporate America, the past year has brought a wave of successes massive mergers, record stock . The company established itself as an independent carrier, unveiled a new logo and eventually merged with Northwest Airlines to create the worlds largest airline. The company estimated that it would incur pretax charges of approx. Now, Apple is one of the most well-known and valuable companies in the world, raking in almost $300 billion in revenue each year. How BA boosted its profits by reducing personnel and upgrading its fleet: To increase profits, King decided to restructure the entire organization by reducing its workforce from 59,000 to 39,000, eliminating unprofitable routes, and modernizing the fleet. The Best Examples of Organizational Change: Examples from Industry Giants, Digital transformation and technology upgrades, Solving internal problems with organizational structure and bureaucracy, Expanding the company to reach new audiences, Organizations cant skip organizational change, either, as change is, Even after the phenomenal and long-lived success of Windows and Office products, Microsoft was, As a result, innovation was being thwarted by a, After being named CEO in February 2014, Satya Nadella undertook a, Reinventing productivity and business processes, Prior to the restructuring, employees had been lacking a positive sense of purpose, with the result being low morale and weakened, And thanks to Nadellas initiative, all Microsofts employees are following a common goal that brings, As of today, Microsofts restructuring is, After dominating a plethora of hi-tech projects, Google co-founder, Page sits at the top as CEO of Alphabet, with Google co-founder Sergey Brin as president, and long-time Google exec Eric Schmidt as chairman (who. In Hulus case, its reorganization and growth may make it more attractive to potential buyers. Instead, all employees would start focusing on a limited set of common goals and bringing them all together. Start with your business strategy. Rather they improve a company's ability to handle its most important decisions. McDonald's was blamed for making America fat, and Apple was nearly bankrupt. In 2010, the reorganized GM made aninitial public offeringthat was one of the worlds top five largest IPOs to date and returned to profitability later that year. Hulu has built up over 20 million subscribers to date, and with its recent reorganization (and possibly a new parent), it may be well poised to continue its growth in profitable areas such as original programming. Bridal chain Alfred Angelo was one of several companies driven to bankruptcy in 2017. Established: 1875. Privacy Policy | Legal Notice | Language Access, Collectively Speaking: Age Determines Collectibility, Brown & Joseph named 2021 Annual Awards of Business Excellence Honoree, Brown & Joseph/Altus and Paragon Merger Announcement. Ecolab, #16 on our list, is a prime example. The latest company to announce layoffs is movie and event ticketing platform BookMyShow, which has said that 270 employees out of its total workforce of 1450 in India and globally will be impacted. You can opt out anytime. In 1928 the company was purchased by Collett E. Woolman and began to expand rapidly in South until its service was terminated in 1930. How Microsoft optimized its processes and unified its teams: After being named CEO in February 2014, Satya Nadella undertook a major restructuring of the tech giant to eliminate its destructive internal competition. In 1993, the company posted a staggering $8 billion quarterly loss. Identify strengths and weaknesses in the current organizational structure. Judith Aquino. During this time Schultz took back control of the company and sent out a message to all employees on his first day back: The company must shift its focus away from bureaucracy and back to its customers.. The technology companies on our list also discovered ways to infuse purpose into their organizations as part of their fundamental change. Infusing a higher purpose into the company called for pushing decision making out from the center to every business unit, so that managers and rank-and-file employees feel they have a stake in future success. Giving employees accountability leads to 10x company growth. For the third round, the following companies were selected as the Transformation 20 and ranked by a panel of management experts (see judges). The approach failed, but as users of the site began to post whatever videos they felt like uploading, the founders embraced the idea. Complex, convoluted and business critical, managing your supply chain successfully is no mean feat. Larry Page made clear his thinking when the launch of Alphabet was announced, explaining that the reorganization would free the employees to concentrate more productively and happily on their own mission without having to be concerned about Google overall. Toshiba. Google-owned streaming video service YouTube is among the most visited websites globally, with billions of videos being consumed there daily. Every company is unique, so the reasons to enact organizational change are essentially endless. Launch your company restructure and adjust as necessary. While some can successfully restructure and reorganize, others fall into the trap of relying on bankruptcies to bide time. Most of the individuals affected were salaried, rather than production workers, illustrating the companys willingness to make cuts in areas other than frontline production. Chipotle has long been known for its counter-service approach, where customers walk in and order custom burritos, bowls, tacos and other items. However, if handled correctly, rock bottom could serve as the first stepping stone a company needs to begin climbing back up to the top. So, if you want to increase your chances to enact change successfully and transform your companys life forever following these best practices will help you manage organizational change smoothly and with less resistance: Following these practices will help you approach organizational change properly. Projections for the year 2030 showed that 70% of the worlds GDP would be based in water-stressed regions, California and Southern India being prime examples. So, in order to save serious troubles in the future, Page decided it was time to deconstruct the entire conglomerate. He renamed the firm rsted after the legendary Danish scientist Hans Christian rsted, who discovered the principles of electromagnetism. Total company sales were $34.8 billion compared to $33 billion for the same period last year. In the early 2000s, when Douglas Baker Jr. became its CEO, Ecolab was an 80-year-old firm growing 10% annually by selling industrial cleansers and food . Corning, a world leader in glass, ceramics and industrial material manufacturing, initially found success in the mid-to-late 1800s by mass-producing glass for Thomas Edisons light bulbs. In a blog post, Page wrote this: Fundamentally, we believe this allows us more management scale, as we can run things independently that arent very related. At a very high level, we can see some of the fruits of Nadellas ideas by looking at Microsofts stock price. This decision should come as a great relief to secured lenders and suppliers to companies that have successfully passed through a restructuring and have resumed "business as usual".