Beyond Restructuring: How Organizations Respond to Societal Change
What Penn State, Colby College, and a new alternative to college reveal about societal recalibration and organizational transformation
By William W. Towns, Ph.D., MBA | October 14, 2026
Pennsylvania State University's recent recommendation to close 47 undergraduate degree programs offers an important opportunity to examine a challenge facing organizations across nearly every sector: What happens when society changes in ways that disrupt the assumptions upon which our institutions were built?
Penn State's recommendations follow a comprehensive review of 403 undergraduate academic programs, student enrollment, workforce demand, and institutional priorities. Nine of the programs recommended for closure currently have no enrolled students, while the 47 programs collectively enroll approximately 1.1% of Penn State's undergraduate population. The recommendations remain subject to established academic review and approval processes, and the university has committed to supporting affected students through degree completion.
The recommendations are understandable within the context of higher education's changing environment. Declining enrollment in certain disciplines, demographic shifts, rising operating costs, changing employment expectations, governmental policy changes, and technological innovation are forcing universities to reconsider how they allocate resources and fulfill their missions.
But I am less interested in whether Penn State should close these particular programs than in the larger organizational challenge its experience illustrates. When societal conditions change, how do organizations determine whether they need to adjust their existing operations or fundamentally redesign how they create value? This is a central question in my research on what I call the Societal Recalibration Cycle and organizational transformation.
Disruption Is Often the Result of Societal Change
Organizations do not operate independently of society. They are created within particular social, economic, technological, and institutional environments. Over time, they develop structures, capabilities, processes, and operating models that reflect the conditions in which they were established.
Universities, for example, have traditionally organized education around academic disciplines, degree programs, departmental structures, faculty expertise, and credentials earned over a prescribed period. These arrangements have served society for generations. But the environment in which universities operate is changing.
Students are reconsidering the economic value of degrees. Employers are reevaluating the skills and credentials they require. Artificial intelligence is transforming how knowledge is accessed and applied. Demographic shifts are changing the composition of prospective students. And new educational platforms are expanding the ways people acquire knowledge and professional capabilities.
Consider the emergence of the Horowitz Andreessen Academy. As reported by The Wall Street Journal, the venture capital firm Andreessen Horowitz is backing an unaccredited, two-year educational alternative emphasizing artificial intelligence, entrepreneurship, and project-based learning.
Whether this particular model succeeds remains to be seen. But its emergence raises an important question: What happens when organizations outside an established industry begin offering fundamentally different approaches to fulfilling needs that traditional institutions have historically served?
At the same time, established universities are experimenting with their own responses. As Dr. Liz Doe Stone describes in a recent Forbes article, Colby College, under President David A. Greene, is pursuing an ambitious effort to reconsider liberal arts education by integrating artificial intelligence across disciplines, investing in science and technology, strengthening the humanities, and expanding experiential learning.
These developments illustrate different responses to a changing educational environment. One challenges traditional institutional arrangements from outside. The other seeks to reimagine their possibilities from within. Neither establishes a universal solution. Both demonstrate that assumptions about how higher education should be organized and delivered are being reconsidered. None of these developments independently renders the traditional university obsolete. Collectively, however, they challenge some of the assumptions underlying its organizational model.
This is what my Societal Recalibration Cycle seeks to explain. The cycle examines how changes in data and insights, disruptive technology, public perception, political conditions, and optimism interact to reshape the environment in which organizations operate.
These forces do not necessarily unfold in a predictable sequence. They operate simultaneously, influence one another, and continuously change the conditions under which institutions create value.
For higher education, technological innovation may change employer expectations, which in turn influences student perceptions of particular degrees. Those perceptions can affect enrollment, institutional finances, public policy, and the willingness of students, families, and funders to invest in different educational models.
As these conditions evolve, established institutions can experience a growing disconnect between how they are organized and what their environment increasingly requires. What was once a source of institutional strength can become a source of organizational rigidity.
Academic departments built around specialized disciplines may struggle to support interdisciplinary learning. Traditional degree structures may be poorly suited to professionals who need continuous education. Institutional budgeting and governance systems may reinforce established programs even as student expectations change. The resulting disruption is not necessarily evidence of poor leadership or organizational failure. It may be evidence that the environment has changed faster than the institution's operating model.
Responding to Disruption Is Not the Same as Responding to Societal Change
This distinction is critical. When organizations experience disruption, their first response is often directed toward its most visible symptoms. Declining enrollment leads to program consolidation. Falling revenue leads to cost reductions. Changing customer behavior leads to revised marketing strategies. Technological competition leads to new investments in digital tools.
These responses may be necessary and appropriate. But they do not necessarily address the underlying societal changes responsible for the disruption. Organizations can become more efficient at operating a model that is becoming less aligned with the environment around it. This creates the possibility of an institutional paradox: the operation may be a success, but the patient still dies. An organization may successfully reduce expenses, consolidate operations, or improve productivity while continuing to lose relevance.
Consider Higher Education
If fewer students enroll in a particular degree program, an institution might conclude that the program is no longer financially sustainable. That conclusion may be correct, but it does not explain why students are no longer enrolling. Have the capabilities associated with the discipline become less valuable? Are students pursuing those capabilities through different educational pathways? Have employers changed how they evaluate qualifications? Or has the university's traditional method of packaging and delivering that knowledge become less attractive? Each explanation suggests a different organizational response.
A university might appropriately discontinue a degree while simultaneously recognizing that the knowledge and capabilities associated with that degree remain essential to its future. The challenge is distinguishing between an offering that has lost relevance and an organizational model that no longer effectively delivers its value.
An organization can successfully respond to disruption without successfully adapting to the societal change that caused it.
That is the distinction between restructuring and transformation. Importantly, restructuring and transformation are not mutually exclusive. Restructuring may be a necessary component of transformation, particularly when institutions must release resources, eliminate duplication, or create capacity for new investments. The critical question is whether restructuring represents the entirety of the organizational response or contributes to a broader strategy for adapting to changing societal conditions.
From Societal Recalibration to Organizational Transformation
My Organizational Transformation Framework provides a way to connect these two challenges. The Societal Recalibration Cycle helps us understand how changes in the broader environment can create misalignment between organizations and the societies they serve. The Organizational Transformation Framework provides a disciplined approach for determining how organizations should respond to that misalignment.
The relationship between these frameworks is important because not every disruption requires the same organizational response. Some challenges can be addressed through operational adjustments. Others require restructuring existing capabilities. Still others demand a more fundamental reconsideration of the organization's strategy, operating model, and relationship with its environment. The challenge for leadership is determining which response is appropriate.
That determination begins with understanding the societal changes producing the disruption, rather than focusing exclusively on its organizational consequences.
Within my broader Continuous Change Leadership System, four interconnected leadership activities organize this work: DIAGNOSE, REDESIGN, ALIGN, and MOBILIZE.
Together, they provide a structured approach to interpreting changing conditions, reconsidering organizational models, building stakeholder alignment, and mobilizing the resources necessary for durable transformation.
DIAGNOSE: Understand the societal shift, not just the organizational symptoms
The first task is to identify what has actually changed. For a university, declining enrollment is an important performance indicator. But it is not, by itself, a complete diagnosis.
A deeper assessment examines changes in student behavior, employment markets, technology, institutional legitimacy, educational alternatives, and the public's expectations of higher education. This is where the Societal Recalibration Cycle becomes particularly useful.
Rather than treating declining enrollment as an isolated institutional problem, leaders can examine how multiple societal forces are interacting to change the relationship between students, employers, educational institutions, and the value of academic credentials.
The emergence of alternatives such as the Horowitz Andreessen Academy, for example, does not establish that traditional higher education is failing. It does, however, provide a signal that some educational entrepreneurs and investors are reconsidering how advanced learning should be organized and delivered.
Such developments deserve examination alongside traditional institutional performance measures. Diagnosis also requires distinguishing between temporary fluctuations and structural changes.
The purpose is to determine whether the institution is experiencing a problem within its existing model or a problem with the continued relevance of that model. Without this distinction, organizations risk designing solutions around symptoms rather than causes.
REDESIGN: Reimagine the organization for the emerging environment
Once the nature of the disruption is understood, leaders must determine what organizational configuration is best suited to the environment taking shape.
For universities, redesign could involve rethinking the relationship between academic disciplines, professional education, research, credentialing, and lifelong learning.
Consider the approach being pursued at Colby College under President David A. Greene. Rather than treating artificial intelligence exclusively as a new field requiring a standalone academic major, Colby is emphasizing the integration of AI-related capabilities across disciplines while maintaining its commitment to the humanities, creativity, and liberal arts education.
As described in Forbes, the college is making approximately $500 million in science and technology investments while having expanded its humanities faculty by roughly 30%. Its Davis Institute for Artificial Intelligence, established in 2021, provides an institutional platform for integrating AI into a broad liberal arts education.
What interests me about this approach is not simply the adoption of a new technology. It is the possibility of rethinking how established academic capabilities can be combined to create value in a changing environment.
A traditional humanities program, for example, might experience declining enrollment even as the capabilities it develops become increasingly important in a world shaped by artificial intelligence. The humanities do not necessarily become less relevant because AI can perform increasingly sophisticated analytical tasks.
Their relevance may change as institutions reconsider how ethical reasoning, creativity, historical understanding, communication, and human judgment interact with technological capabilities.
Rather than viewing the choice exclusively as preserving or eliminating an existing academic program, redesign invites institutions to consider how its underlying capabilities might contribute to new interdisciplinary offerings. The question becomes not simply which programs should survive, but what new combinations of knowledge, capabilities, and educational experiences could create value.
This requires organizations to reconsider more than their products and services. They must also examine how work is organized, how decisions are made, and how institutional resources are deployed. The objective of redesign is not to preserve the institution as it exists. It is to preserve and advance its purpose by reconsidering how that purpose can best be achieved.
ALIGN: Ensure the institution can support its redesigned model
Even well-conceived transformation strategies can fail when organizational systems remain tied to the previous operating model. Universities may embrace interdisciplinary education while maintaining budgets, faculty incentives, governance structures, and administrative processes that reward spheres of excellence.
Organizations may invest in artificial intelligence while retaining workflows and management practices designed for an entirely different technological environment. Alignment requires examining whether strategy, resources, talent, governance, culture, and performance measures support the redesigned organization.
This is another reason the Colby example is interesting. Integrating AI across academic disciplines is not simply a matter of introducing new courses or providing students with access to technology. It requires considering how faculty expertise, institutional investments, curriculum development, research priorities, and educational experiences work together.
Colby's broader investments in research opportunities, internships, faculty development, and partnerships beyond the campus illustrate how educational redesign can extend beyond the classroom. The broader lesson is that an organization cannot fully implement a new strategy while relying exclusively on systems designed to sustain its previous operating model.
Alignment also requires confronting the institutional tensions that emerge when established structures and professional identities are challenged. Transformation becomes difficult when an organization attempts to operate a new model through systems that continue to reinforce the old one.
MOBILIZE: Build the capacity to move from institutional intention to action
Organizational transformation is ultimately a collective undertaking. University leadership cannot redesign higher education independently of faculty, students, employers, alumni, and the communities institutions serve.
These stakeholders provide essential perspectives on how societal expectations are changing and what new forms of institutional value may be possible. Mobilization involves more than communicating a strategic plan. It requires developing shared understanding, building coalitions, establishing accountability, and assembling the resources and capabilities necessary to implement and continuously refine organizational change.
For universities, this may require bringing together faculty from traditionally separate disciplines, developing partnerships with employers and community organizations, and creating opportunities for students to participate in shaping emerging educational models.
It also requires leaders to consider how financial capital, institutional relationships, human expertise, and public legitimacy can be brought together to support a redesigned organization.
Importantly, mobilization requires recognizing that transformation is not a single event. As societal conditions continue to evolve, institutions must retain the capacity to reassess their assumptions and adapt.
Why Artificial Intelligence Makes This More Urgent
Artificial intelligence provides a particularly revealing example of why organizational redesign must extend beyond conventional restructuring. For generations, universities have organized education around the acquisition, interpretation, and application of specialized knowledge.
AI is changing how people perform many of these activities. The strategic question is not simply how universities should incorporate AI into existing courses. It is how the expanding availability of sophisticated analytical and knowledge capabilities changes what students need to learn, how they should learn it, and what distinctive value universities should provide.
This may create new opportunities for disciplines that are currently experiencing enrollment pressures. Philosophy, history, sociology, organizational studies, and other fields offer important foundations for understanding ethics, institutions, human behavior, and social consequences.
These capabilities may become increasingly relevant as organizations confront the challenges of deploying AI responsibly.
Yet the degree structures through which these disciplines have traditionally been delivered may not reflect how students or employers currently understand their value. That is precisely the kind of disconnect that requires deeper diagnosis and potentially significant redesign.
AI also raises questions about the university itself. In a world where sophisticated answers can increasingly be generated with a few keystrokes, the value of higher education cannot rest exclusively on helping students produce answers.
It must also involve developing the capacity to formulate meaningful questions, evaluate the quality of information, exercise judgment, and collaborate across disciplines to navigate complex social and organizational environments.
This does not diminish the importance of disciplinary knowledge. In fact, sound judgment and meaningful inquiry depend upon it. But it does suggest that universities may need to reconsider how knowledge, human capabilities, and emerging technologies are integrated into the educational experience. Colby's approach provides one example of how an established institution is exploring this possibility.
What would a university designed around these priorities look like? And how different would it be from the university we know today?
The Challenge of Institutional Purpose
One important consideration must remain central to this discussion. Universities are not simply businesses responding to consumer demand. They are institutions with educational, research, civic, and public responsibilities.
Some academic disciplines may have limited immediate employment demand while making essential contributions to democratic life, scientific discovery, cultural understanding, and the preservation of knowledge.
As a professor who has the privilege of teaching at a globally recognized business school, I strongly believe that institutional transformation should not mean abandoning those responsibilities in pursuit of whatever is currently most profitable or popular.
Rather, it requires determining how an institution can continue fulfilling its purpose under changing societal conditions. This is an important distinction. Organizations sometimes confuse their purpose with the structures through which that purpose has historically been pursued.
A university's commitment to developing informed citizens, advancing knowledge, and preparing people for meaningful work does not necessarily require preserving every existing degree program or departmental configuration.
But neither should changes in enrollment automatically determine which forms of knowledge society should continue to cultivate. The strategic challenge is to distinguish between the institutional mission that should endure and the organizational arrangements that may need to change.
Penn State as a Window Into a Larger Transformation
Penn State's academic portfolio review is one example of the difficult choices confronting established institutions. Its recommendations may be necessary to strengthen financial sustainability, respond to student demand, and position the university for future investment.
The university's process may also create opportunities for more significant academic innovation and organizational transformation. The important point is that these possibilities should not be treated as mutually exclusive.
Institutions can responsibly discontinue existing programs while simultaneously reimagining how their capabilities can create value in the future. But doing so requires moving beyond the question of what should be eliminated to consider what should be created.
This is not a challenge unique to higher education. Hospitals, financial institutions, media organizations, government agencies, nonprofits, and corporations all face variations of the same dilemma. They were designed for environments that are changing. Their operating models reflect assumptions that may no longer hold. And their leaders must decide whether to optimize existing structures or undertake the more difficult work of organizational transformation.
The Question Is Not Whether Organizations Must Change, but How
Societal recalibration creates both disruption and opportunity.
It challenges institutions to reconsider what society needs, how value is created, and whether existing organizational models remain capable of delivering that value.
Organizational transformation provides a pathway for responding.
DIAGNOSE the changes taking place. REDESIGN the organization around the emerging environment. ALIGN institutional systems and stakeholders. MOBILIZE the people, capabilities, and resources necessary to implement and sustain transformation.
The goal is not change for its own sake. It is to ensure that institutions remain capable of fulfilling their purpose as the society around them evolves.
Penn State's recommendations remind us that institutional change often becomes visible through decisions about programs, budgets, and organizational structures. These decisions matter. They shape the resources available to institutions, the opportunities available to students, and the capacity of universities to fulfill their missions.
But the deeper organizational challenge is not simply determining what must change within an existing institution. It is understanding how the relationship between that institution and society is changing, and what those changes mean for its future.
This is why societal recalibration and organizational transformation must be considered together. One helps explain the changing conditions confronting institutions. The other provides a pathway for determining how institutions can respond.
When society changes, organizations must do more than decide what parts of the past they can afford to keep. They must determine what kind of institution the future requires them to become.
That is the central challenge of societal recalibration and organizational transformation.
Sources and Further Reading
Pennsylvania State University. "Final APPR Recommendations Shared Following Community Feedback, Assessment." October 12, 2026.
Liz Doe Stone. "Can Colby College Save the Liberal Arts?" Forbes, October 13, 2026.
The Wall Street Journal. "The Tech Elite Is Funding the Horowitz Andreessen Academy, a Two-Year Alternative to College."
Colby College. Davis Institute for Artificial Intelligence.
William W. Towns. Societal Recalibration Cycle and Organizational Transformation Framework.
About the Author
William W. Towns, Ph.D., MBA, serves on the faculty of Northwestern University's Kellogg School of Management and Medill School of Journalism, Media, Integrated Marketing Communications, and is affiliated with Northwestern's Energy and Innovation Lab. His research examines organizational transformation, institutional strategy, societal recalibration, artificial intelligence, and the changing relationship between organizations and society.
Learn more at www.williamwtowns.com.