Do You Know All 5 Types of Organizational Change?
Change is a fact of life.
Think about the seasons. Every year around this time, summer fades into autumn. The temperature drops and the leaves change colors, eventually falling from the trees. But not all types of organizational change are so routine or graceful. Change might be as inevitable as the shifting weather — but that doesn’t mean that there aren’t ways to ensure a successful organizational change in your company.
What is organizational change management?
Organizational change management refers to an event or program that a business or enterprise wishes to initiate, which causes significant disruption to their daily operations. There can be a variety of factors that lead to change within an organization.
A major challenge is reducing the potential for friction and resistance to change by ensuring all employees understand why change is important to the company’s future. Yet, ignoring the need for change can be far more threatening to your business than the change itself.
Why is change important for an organization?
In today’s dynamic world, change is not just a fact of life, but essential for survival. New organizational developments and priorities happen so quickly (thanks to COVID-19 & the digital transformation revolution) that if you’re not up-to-date, you’re slipping behind. Trends and technology evolve, which means that customers’ needs will constantly be changing. Information is transmitted faster and companies that can’t deliver on speed will lose out to those that can.
Whether it is installing a new software platform, reorganizing your business to make it more streamlined and efficient, or adapting to customer needs, it is essential as a business to ask yourself why as a leader change is imperative to your organization.
While it can be disruptive at first, organizational change will ultimately improve productivity among your employees and therefore boost sales success. The goal of any business is to delight its customers. If customers are changing, a company must learn to adapt.
With every change comes the opportunity to learn. To prepare your staff adequately for new developments, employers must assess the skills and tools their employees already have and look for gaps. Down the line it will be easier to identify which areas should be a top priority for training.
The 5 Types of Organizational Change
With organizational change strategies, companies can avoid stagnation while minimizing disruption. Preparation is integral for success, especially during a change effort. However, one can’t prepare without knowing what type of change is occurring. The first step is to understand what change management models exist and then figuring out what best suits your company or team.
Here is a list of 5 types of organizational change companies undergo.
1. Organization Wide Change
Organization wide change is a large-scale transformation that affects the whole company. This could include restructuring leadership, adding a new policy, or introducing a new enterprise technology.
Such large-scale change will be felt by every single employee. However, as the dust settles, you can begin to see improvements. Organizational change can be a sharp indicator in understanding how long-held policies have become outdated or reflect a company’s transforming identity.
Achieving a successful organization-wide change demands comprehensive planning and communication throughout the organization. Whether the results are positive or negative are dependent on your organizational change strategies and their execution. For software specifically, a digital adoption solution is an essential tool for implementing company-wide changes.
Harvard Business Review Analytics Services published their evaluation of The State of Digital Adoption 2021, further showing the effects of proper implementation and adoption on the success of complete organizational digital transformation.
2. Transformational Change
Transformational change specifically targets a company’s organizational strategy. Companies that are best suited to withstand rapid change in their industry are nimble, adaptable, and prepared to transform their game plans when the need arises.
Strategies to guide transformational change must account for the current situation and the direction a company plans on taking. Cultural trends, social climate, and technological progress are some of the many factors leaders must consider.
According to a study from MIT Sloan Management Review and Deloitte, maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, into their transformation strategies. Meanwhile, less-mature digital businesses are focused on solving discrete business problems with individual technologies.
However, given the rapid pace at which digital technology evolves, companies will be better positioned to succeed if they incorporate digital adoption platforms into their transformation strategies.
3. Personnel Change
Personnel change happens when a company experiences hyper-growth or layoffs. Each of these types of organizational change can cause a significant shift in employee engagement and retention.
The threat of layoffs evokes fear and anxiety among staff members, and leaders should expect that employee morale will suffer. Nevertheless, the company must move forward. It is important to display genuine compassion and motivate employees to continue to work hard through difficult times.
While mass hiring has better implications for a company, it is not without its challenges. Hiring en masse is a sign of growth, which makes companies susceptible to cultural changes and disorganization.
Employing new staff means training them and providing ongoing support. Welcoming an influx of employees is great, but the work is cut out for those in management. If the transition is not handled correctly, it can cause chaos, inefficiency, and ultimately deter further growth.
4. Unplanned Change
Unplanned change is typically defined as necessary action following unexpected events. While unplanned change cannot be predicted — it can be dealt with in an organized manner.
For example, the hurricanes that battered the U.S. early in the fall of 2017 caused thousands of residents to evacuate and seek temporary shelter far away from home. Following this emergency, those affected began the long process of restoring normalcy to their lives.
Companies also experience unplanned changes. When a CEO suddenly leaves the company or a security breach occurs, chaos and disruption ensue. By setting basic organizational change strategies in place for these situations, organizations can minimize these unplanned risks and emerge as more adaptable and resilient.
5. Remedial Change
Leaders implement remedial changes when they identify a need to address deficiencies or poor company performance.
For example, financial distress is usually due to lackluster performance and requires remedial change. Other common examples include introducing an employee training program, rolling out new software, or creating a position to fix a pain point.
Other types of corrective action could include reviewing strategies that may have been in place for years but are no longer profitable. Issues stemming from leadership, such as a newly appointed CEO who turns out to be a poor fit for the company, might also call for remedial change. Although remedial change efforts must be tailored to the specific problem on hand, they still require effective organizational change strategies to be effective.
5 ways to ensure successful organizational change
Organizational change has many clear benefits but can lead to misalignment and company-wide confusion without proper implementation.
In order to execute organizational change with glowing results, take note of these five ways to ensure its success.
1. Set clear goals and develop a strategy
Organizational change often transcends multiple departments and job functions. A variety of stakeholders are involved to guarantee their interests are heard and met.
According to the Katzenbach Center, only 54% of change initiatives succeed. To achieve successful organizational change, clearly defined goals need to be set along with a digital strategy for how they’ll be reached. After all, how can you measure success if you don’t know what you’re aiming for?
A strategy helps determine the vision for what the company should look like after the change. It is the role of management to develop that vision by listening to the feelings and opinions of those who will be affected. This will encourage buy-in across the company and make sure the strategy is carried out as intended.
2. Overcoming resistance and staff engagement
Organizational change can often be difficult, especially if your employees don’t see anything wrong with the status quo. To them, the change may appear disruptive at best. There will be new technologies to learn and platforms to navigate. Worse still, if the initiated change automates many of their existing tasks, some employees may feel threatened.
Communication will be vital to getting your team on board. Survey their opinions on the status quo and the proposed changes in the planning stages; they will feel included in the process, fostering a feeling of buy-in.
Explaining to your employees why these changes are necessary and will improve their day-to-day may also allay fears and reduce resistance.
3. Offering management support
For organizational change to be successful, it needs to be adopted across the business, from C-level down to managers. The CEO may have a vision for the change, but it will be up to the rest of the business to execute it. That’s why it’s important to share that vision so that others know what their role will be in bringing it to fruition, and what will be required of them after the changes have taken place.
If management wants its employees to invest in change, they need to demonstrate commitment from an ecosystem of leaders throughout the business. Having a consistent message of why change is needed will help garner support across the board.
Management support can be in the form of documenting feedback throughout the process, updating employees on progress and next steps, and encouraging open lines of communication. All of these things will help your employees navigate their way through organizational change and even perform better.
4. Contextual learning for new technologies
It is inevitable that with any organizational change, there will be new tools to learn and understand. Learning is an ongoing journey and requires employers to provide contextual learning techniques.
Using outdated training methods such as classroom lectures is a single-use solution that doesn’t scale. Employees may watch or attend a lecture one time, and if the information isn’t clear or continuously refreshed, it won’t be retained. Contextual learning like a digital adoption platform helps employees by personalizing their training experience.
Using sophisticated algorithms and correlating data on factors such as their level of seniority, job function, and previous actions, these programs tailor training to the individuals’ needs. This comes in the form of pop-ups prompting the user with actions leading them to complete each step in the process while also providing deep insights.
Time that would have been wasted in the classroom can be spent learning on the job.
5. Invest in agility training
Organizational agility refers to being able to react quickly to changes in business operations, strategy, and even culture. However, agility is not innate within an organization; it must be learned.
Agility can take different forms, but there are three main steps to focus on when developing agility training. The first is to foster change management skills. These can be individual skills such as personal resilience and organization to more company-wide skills, like forcing clarity, networking, and coaching.
The second step is to train your team in productive time management. Knowing how to evaluate what is important versus urgent and how to prioritize tasks is crucial. Employees will be readily equipped to tackle changes within the organization or their daily jobs.
Finally, as mentioned above, offer continual learning and development. When organizational changes take place, there is a lot of information that needs to be acclimated. However, if learning is already habitual and employees are used to training within their workflow, these changes will seem far less daunting and more manageable.
Proper agility training enables your business to pivot when the need arises. Organizational change will become just another task as opposed to an insurmountable challenge. This is also important for organizational health.
Strategize and prepare for change
Various types of organizational change necessitate different actions. Companies that fare best amid transitional periods are adaptable and embrace change, even when circumstances are not ideal. Having basic strategies in place also helps guide transformation efforts, including those that are prompted by unplanned events. When it comes to organizational change, preparation is key.