Organizational change is often driven by the economy
Economic downturns, mergers, reorganizations, natural disasters, war, disruptive global and workforce trends, technological change, and industry upheavals impact organizations and their employees at the visceral level. (View Economic Drivers Video)
Organizations like to focus on the positive when developing strategic plans based on the best business and economic scenarios, yet it is often the negative economic surprises that drive organizational change. After over 30 years in business, I recently developed a retrospective of the primary global, national and regional economic drivers covering over 50 decades. It is gripping to review the succession of economic downturns, mergers, reorganizations, natural disasters, war, disruptive global and workforce trends, technological change, and industry upheavals which impact organizations and their employees at the visceral level. (View Economic Drivers Video)
Aside from the cathartic experience of remembering all that occurred economically over my career and life, I realized that it was these economic events, trends and situations that drove many of the changes in organizations, including my own consulting firm. Change happens for a reason – innovation, cultural preferences, competitive landscape, customer/client needs, government regulations, and yes, economic realities! It is the latter that tend to be unexpected and can change all the other parameters that precipitate organizational change.
One economic event that had the most dramatic impact on my business was the demise of Enron in 2003. That infamous bankruptcy impacted millions of people and thousands of businesses worldwide causing:
- Layoffs & Business Closures
- Massive Pension Losses
- $60 Billion Investment Losses
- Stock Market Decline
- Capital Flight
The immediate impact rippled across the economic landscape globally. As a result, businesses, investors, and employees had to change a myriad of career, financial, personal and business strategies, goals, and plans in order to survive and move forward. In the aftermath of the Enron collapse, the trust between business leaders and employees, customers, investors, and the public in general was undermined so profoundly that the effect lingers today. This is one example of how a single economic event can change everything.
While it is smart to plan one’s career and business based on known conditions and realities, it would be stupid to ignore the potential economic pitfalls that can occur to change one’s current reality and future vision. And when economic drivers occur, those who have the resiliency to adapt and change accordingly are the ones who cut their losses, succeed in the long run, and thrive to experience the next inevitable economic driver. Risk mitigation is big business, but in addition to contingency plans, insurance, and scenario planning, individuals and businesses do well to develop policies and processes for change management and a culture that fosters resiliency, adaptability, and courage.
By Sheryl Dawson
CEO, Dawson Consulting Group