Organizations are full of stories. There is of course the daily gossip about serious matters such as your colleague’s latest fling, or the weather that is never quite behaving how it is supposed to; too hot, too cold, too dry, too wet.

But then, there are also the lingering tales of heroes and heroines, of battles and victories, of risk, sacrifice, and of loyalty and trust. These stories often go back many years and might not actually be fully based on true facts. They nevertheless capture what an organization is about, what has mattered most, and what people consider the strength of the organization to be – it’s what people identify with.

Agreed, this is a strange opening for a piece on technology-driven change, yet I would like to make the case that it cuts to the core of the problem. Technologically driven change, particularly in well-established firms, is not actually (just) about the tech. Below I will argue that it requires a serious look in the mirror to find out whether this new company profile ‘is still us’? And if it isn’t, how can managers and staff make their peace with, move on and rewire. 

Over the last five years, we have worked on a number of research projects with colleagues in Germany, the UK, and France aiming to understand how radical transformation and renewal of well-established and mature organizations come about. These studies were conducted in a wide range of industries, such as Chemicals, Robotics, Automotive, Food, Property Development but also IT.

A recurring explicit and partly implicit theme has been the notion of identity. Below, I will share three challenges that emerged from these studies:

A symptom that the question “is that still us” has not quite been answered yet, is when technological change, such as initiatives of digitalization, is farmed out to a separate part of the organization. While this is done with the intention to transform the firm and might actually mark an important first step, it also provides a short-term comfort blanket for the rest of the organization. In this case, there is the risk that technological change is not yet to be part of what people identify with as they look ahead.

The question “is that still us” might also be answered with an ‘over-confident, yes. The identification with past successes may result in shared and deeply ingrained assumptions about what the company is good at and that this carries on into the future. It gives people confidence in the competitiveness of the firm and thus influences how management teams, for instance, judge (or misjudge) market dynamics and their own level of control. This risks that radical changes and necessary conversations to do with the very purpose of the company are postponed with severe consequences for future competitiveness. 

Finally, the question “is that still us” may be answered with an uncertain ‘no, and we don’t have a clue what we are right now’.

For technological change to be successful, it needs to go beyond sprinkling digital fairy dust across the organization. It might affect every corner of the organization; its processes, products, services, customers, and revenue models.

However, before this new picture emerges, people have to endure substantial ambiguity, and for quite some time the future shape of the firm might not be quite tangible. While this uncertainty exists on the level of the firm, it also exists on the level of individual roles. In order to avoid losing key talent, companies need to carefully manage this phase of flux, which does not yet give people the bigger picture to identify with going forward.   

Technological change, like any radical transformation of a company, casts its look into an uncertain future. Yet, the examples shown above highlight the need to also look into the proverbial mirror in order to reflect on how past organizational identity influences how we see this future, how this identity influences the activities put in motion to get there, and whether this identity needs to change for the organization to transform successfully.

So, next time people tell stories about the organization, you better listen carefully. It might not just be gossip after all. 

Martin Friesl is Professor of Strategy and Organization Studies at Otto-Friedrich-Universität Bamberg and Adjunct Professor at NHH. He is affiliated with the RaCE research project.



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