How One Company Achieved a Bold Transformation—Despite Major UnknownsSKIP TO CONTENTHarvard Business Review LogoHarvard Business Review LogoOrganizational transformation|How One Company Achieved a Bold Transformation—Despite Major UnknownsSubscribeSign InLatestMagazineTopicsPodcastsStoreReading ListsData & VisualsCase SelectionsHBR ExecutiveSearch hbr.orgSubscribeLatestPodcastsThe MagazineStoreWebinarsNewslettersAll TopicsReading ListsData & VisualsCase SelectionsHBR ExecutiveMy LibraryAccount SettingsSign InExplore HBRLatestThe MagazinePodcastsStoreWebinarsNewslettersPopular TopicsManaging YourselfLeadershipStrategyManaging TeamsGenderInnovationWork-life BalanceAll TopicsFor SubscribersReading ListsData & VisualsCase SelectionsHBR ExecutiveSubscribeMy AccountMy LibraryTopic FeedsOrdersAccount SettingsEmail PreferencesSign InHarvard Business Review LogoOrganizational transformationHow One Company Achieved a Bold Transformation—Despite Major Unknowns by Chengyi Lin and Michael Y. LeeJanuary 23, 2026HBR Staff using AIPostPostShareSaveBuy CopiesPrintSummary.   Leer en españolLer em portuguêsPostPostShareSaveBuy CopiesPrintThe mood in the room was tense. It was 2020, and the executive team of a company we’ll call Pharma Global (PG)*, the non-U.S. division of a leading pharmaceutical company, had gathered in Frankfurt for their annual retreat. For two years, they had debated a bold transformation—one that would fundamentally change how decisions were made, flatten the organization, and empower employees. Yet, despite endless discussions and extensive analysis, they had failed to make the leap.Chengyi Lin is affiliate professor of Strategy and a leading expert on digital transformation at INSEAD. His research and teaching explore the strategic impacts of digital technologies, such as AI, and drivers of innovation for global and multinational organizations.Michael Y. Lee Michael Lee is an assistant professor of organizational behavior at INSEAD. Follow him on Twitter: @yanche.PostPostShareSaveBuy CopiesPrintRead more on Organizational transformation or related topics Organizational change, Leadership, Organizational decision making and Decision making and problem solvingPartner CenterStart my subscription!Explore HBRThe LatestAll TopicsMagazine ArchiveReading ListsCase SelectionsHBR ExecutivePodcastsWebinarsData & VisualsMy LibraryNewslettersHBR PressHBR StoreArticle ReprintsBooksCasesCollectionsMagazine IssuesHBR Guide SeriesHBR 20-Minute ManagersHBR Emotional Intelligence SeriesHBR Must ReadsToolsAbout HBRContact UsAdvertise with UsInformation for Booksellers/RetailersMastheadGlobal EditionsMedia InquiriesGuidelines for AuthorsHBR Analytic ServicesCopyright PermissionsAccessibilityDigital AccessibilityManage My AccountMy LibraryTopic FeedsOrdersAccount SettingsEmail PreferencesHelp CenterContact Customer ServiceExplore HBRThe LatestAll TopicsMagazine ArchiveReading ListsCase SelectionsHBR ExecutivePodcastsWebinarsData & VisualsMy LibraryNewslettersHBR PressHBR StoreArticle ReprintsBooksCasesCollectionsMagazine IssuesHBR Guide SeriesHBR 20-Minute ManagersHBR Emotional Intelligence SeriesHBR Must ReadsToolsAbout HBRContact UsAdvertise with UsInformation for Booksellers/RetailersMastheadGlobal EditionsMedia InquiriesGuidelines for AuthorsHBR Analytic ServicesCopyright PermissionsAccessibilityDigital AccessibilityManage My AccountMy LibraryTopic FeedsOrdersAccount SettingsEmail PreferencesHelp CenterContact Customer ServiceFollow HBRFacebookX Corp.LinkedInInstagramYour NewsreaderHarvard Business Review LogoAbout UsCareersPrivacy PolicyCookie PolicyCopyright InformationTrademark PolicyTerms of UseHarvard Business Publishing:Higher EducationCorporate LearningHarvard Business ReviewHarvard Business SchoolCopyright ©2026 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

The atmosphere within Pharma Global’s (PG) Frankfurt-based executive team was characterized by palpable tension during their annual retreat in 2020. For two consecutive years, the team had engaged in extensive deliberations and analytical explorations concerning a proposed, transformative shift within the organization. This ambitious plan centered around a fundamental restructuring of decision-making processes, a deliberate flattening of the hierarchical structure, and the fostering of increased employee empowerment. Despite this prolonged and exhaustive engagement, the team had, until this point, failed to execute the necessary changes, indicating a significant obstacle preventing them from moving forward with the planned transformation.

The core of the analysis, presented by Chengyi Lin, an affiliate professor of Strategy specializing in digital transformation at INSEAD, highlighted the critical role of uncertainty and ambiguity in hindering organizational change. Lin’s research focuses on the strategic consequences of digital technologies, particularly artificial intelligence (AI), and the drivers of innovation within global and multinational organizations. He emphasized that organizations often struggle not because of the magnitude of the change itself, but rather due to the lack of clarity surrounding the future state. The team at PG, deeply entrenched in a traditional, siloed structure, was particularly vulnerable to this phenomenon. The proposed transformation demanded a shift in mindset – a willingness to embrace the unknown and to operate with a degree of experimentation, something that contradicted their established norms and ingrained behaviors.

Lin’s assessment revealed a disconnect between the stated goals of the transformation and the underlying assumptions driving the team’s resistance. The executives were operating under the belief that a simple top-down implementation of the new structure would automatically yield the desired results. They hadn't sufficiently considered the psychological impact of structural change on individuals and teams, nor had they developed the requisite processes and tools to support the new, more decentralized decision-making model. The fear of losing control, combined with a lack of trust in their employees’ judgment, fueled a deeply ingrained resistance to relinquishing authority.

Michael Y. Lee, an assistant professor of organizational behavior at INSEAD, contributed to the understanding by pointing out that the resistance wasn’t simply about the structural changes themselves but was intrinsically tied to the team’s comfort level with risk. He suggested that the executives were operating with a bias towards certainty, a tendency that is exacerbated in complex environments. This bias led them to overestimate the level of information available and to underestimate the potential for unforeseen consequences. The team’s reluctance to experiment and its premature attempts to impose solutions before fully understanding the complexities of the problem deepened the resistance.

The analysis underscored the critical need for a more adaptive and iterative approach. Rather than attempting a sweeping, declarative change, the team needed to cultivate a culture of continuous learning, experimentation, and feedback. This involved developing more robust mechanisms for knowledge sharing, establishing clear metrics for measuring success, and creating a supportive environment where employees felt empowered to challenge the status quo. Moreover, it demanded a profound shift in leadership – a willingness to lead by example, to demonstrate trust, and to actively solicit input from all levels of the organization. Ultimately, the successful execution of the transformation hinged not solely on the design of the new structure, but on the commitment of the executive team to foster a truly agile and adaptive culture.