Organizational Renewal

Organizational renewal focuses on how an organization can experience growth, learning, rebirth, and resurrection through crisis awareness. Organizational renewal does not ignore the fact that those who violated laws and policies precipitated the crisis. The primary focus, however, is on moving forward to manifest an organization that is better equipped to avoid and manage crises than it was prior to the difficulty. Thus, a discourse of renewal can serve as the primary narrative inside and outside the organization, can compete with accusatory narratives, or can complement the critical or accusatory narrative. This forward-looking, or prospective, discourse of renewal has been studied in a range of crises, such as organizational accidents, recalls, terrorism, and natural disasters.

When organizations encounter crises, questions of accountability, responsibility, and blame are inevitable and often dominate the postcrisis public discussion. When matters such as culpability dominate the discourse, the result is often a bitter exchange among organizations and their stakeholders. In contrast, organization renewal transcends this linear linking to offer an alternative to the retrospective focus where blame and censure are paramount. This entry provides an overview of the concept of organizational renewal, gives examples of renewal, and describes common features of organizational renewal.

Overview

In a general sense, organizational renewal can be described as a development process that moves organizations to higher stages of resilience and responsibility. Organizations that fail to advance to this higher level following a crisis risk reenacting the same failures that precipitated the crisis. From the perspective of organizational renewal, crises reveal exceptionally important weaknesses that threaten the stability of the organization. The primary function of the discourse of renewal is to connect or reconnect the organizational learning process to an organization’s core values. This learning process can then expose fallacious assumptions or unforeseen vulnerabilities and help build consensus, cooperation, and support toward changes that resonate with the organization’s core ethics. In many cases, a discourse of renewal can fundamentally reorder the organization down to its core purpose. To do so, organizations establish the importance of the past in the present and dedicate their energy toward a better future. Ultimately, this emphasis on core values and organizational change enables organizations to re-create themselves.

The renewal process is initiated from within the organization to fortify, rebuild, and improve the organization. For consumers and other stakeholders outside the organization, a discourse of renewal can also generate goodwill within the larger community or society. This goodwill ideally is a function of strong community networks or positive relationships that are developed through relationships nurtured by the organization before the crisis. A long-standing reputation of ethical conduct and fair treatment of customers, suppliers, and communities can foster support for an organization following a crisis. Sometimes this goodwill develops solely as a consequence of the crisis. Organizations with limited visibility prior to a crisis can garner community support through a highly visible effort to care for employees, compensate victims, and rededicate their efforts to rebuild and improve as a result of the crisis. Similarly, in those cases where relationships before a crisis have not been positive, there may be an outpouring of sympathy and support for organizations facing crises not of their own making, such as terrorism, natural disasters, or catastrophic technical malfunctions. In any case, goodwill can facilitate and bolster the organizational renewal process.

Examples of Renewal

The discourse of renewal functions best in organizations with strong and credible leaders who immediately, publicly, and sincerely commit themselves to the renewal process. Without this commitment, organizations can easily regress into a discourse of blame and denial that fails to learn from the crisis and reconnect with the organization’s core values. For example, Malden Mills and Cole Hardwoods are two organizations that successfully engaged in a discourse of renewal. The facilities of both organizations were incapacitated by separate, accidental fires. In both cases, the organizations had strong, visible leaders who immediately pledged to rebuild and to maintain their workforces. Both leaders announced their plans for immediately rebuilding while the facilities were still in flames.

Odwalla provides a view of how organizational renewal functions in the long term. In 1996, the juice maker faced a crisis stemming from an E. coli outbreak caused by its unpasteurized apple juice. Tragically, the outbreak caused a child’s death and made 60 other children seriously ill. The company immediately initiated a recall, communicating openly and honestly with consumers, cooperating in a federal investigation, expressing genuine sorrow for the harm caused to the children, and publicly committing to be an industry leader in product safety. The key lesson revealed by the Odwalla crisis was that juice processors could no longer rely on the naturally acidic nature of their products to kill harmful bacteria such as E. coli. Odwalla initiated flash pasteurization as an industry standard for all juice products.

Common Features of Organizational Renewal

Although a discourse of renewal is applicable to a wide range of organizational and crisis contexts, several characteristics are consistently present in the process. Previous research recognizes four common features in successful applications of a discourse of renewal: (1) organizational learning, (2) ethical communication, (3) a prospective rather than a retrospective vision, and (4) sound organizational rhetoric. Each of these characteristics is explained below.

Learning

Learning in response to crises is the foundation of organizational renewal. Crisis events unveil previously unknown or overlooked weaknesses and vulnerabilities. Before renewal can begin, organizations must identify, analyze, and transparently make a commitment to resolving these weaknesses and failures. At this stage in the renewal process, the organization’s leader or leaders illustrate how the organization is learning from the crisis, analyzing these lessons, and planning meaningful changes that will ensure that the crisis does not happen again or provide an improved capacity for addressing similar problems in the future. The learning stage in the discourse of renewal expresses the organization’s willingness to see the crisis as an opportunity for improvement rather than as a humiliating debacle to live down. Thus, a discourse of renewal seeks and embraces opportunities to re-create systems and structures in more logical, resilient, and effective ways.

Ethical Communication

As mentioned earlier, crises serve to reveal an organization’s core values in a dramatic and highly public manner. If, prior to the crises, organizations fail to act ethically, those failures will be publicly revealed in dramatic fashion during and after the crisis. If an organization egregiously violates ethical norms prior to a crisis, these violations can make engaging in organizational renewal improbable, if not impossible. Organizations that lack integrity before a crisis are unlikely to generate the level of trust needed from stakeholders, both within and outside the organization, to have confidence in a discourse of renewal. The organizations most likely to embrace organizational renewal would have instituted strong, positive value positions, such as openness, honesty, responsibility, accountability, and trustworthiness, with key organizational stakeholders before a crisis happens. These core values are paramount in all decisions made by the organization’s leadership throughout the renewal process. A minor lapse in these values preceding a crisis may be overcome by an organization; however, egregious and consistent violations likely cannot.

Prospective Versus Retrospective Vision

The entire renewal process requires a consistently prospective, or future-oriented, focus. Organizational renewal requires a persistent emphasis on rebuilding and a de-emphasis on issuing blame or fault. The temptation for organizations may be to respond to crises by blaming others and denying responsibility. These tactics are seen as a distraction during the postcrisis period for organizations engaging in a discourse of renewal. Instead, organizations committed to renewal concentrate their communication on the ultimate goal of rebuilding the organization so that it is more resilient to crisis, clearly focused on core values, and more committed to meeting stakeholder needs.

Effective Organizational Rhetoric

During the renewal process, organizational leaders serve as models for the attitudes and behaviors they seek to encourage in the organization’s stakeholders both internally and externally. Organizational renewal requires organizational leaders to actively and intentionally participate in rhetorically structuring an optimistic reality for their organizations’ diverse stakeholders. This inspired vision expressed widely and consistently helps inspire stakeholders to continue supporting the organization throughout the renewal process. As was described in the renewal examples summarized earlier, this rhetorical challenge for organizational leaders begins with the onset of the crisis. To meet this rhetorical challenge, organizational leaders must depict the crisis in a way that inspires, empowers, and motivates employees and rekindles trust and loyalty for customers and other stakeholders. Core values are essential in the development of this consistent message. The messages of leaders engaged in a discourse of renewal cannot be ingenuous or in any way manipulative. Rather, they must sincerely represent and enact the core values embraced by the organization. At its best, renewal rhetoric is capable of fostering cooperation and commitment while embodying and exhibiting the organization’s core values.

Conclusion

Crises openly display an organization’s values, and organizational renewal directly references these core values to generate support for rebuilding or reconstituting an organization. Values such as openness, honesty, responsibility, accountability, and trustworthiness are central to establishing the credibility of leaders and organizations before, during, and after crisis events. The essence of the renewal narrative takes a prospective, or future-oriented, focus, transcending a retrospective focus on blame. Following a crisis, organizational renewal concentrates on rebuilding and improving the organization. This form of discourse honors the past as part of the learning process while featuring a future vision of the reformed organization based on these lessons.