What is organizational change?
Organizational change is the process through which a firm or business changes a key aspect of its structure, such as its culture, the operational infrastructure or supporting technologies, or its internal procedures. The process of guiding organizational change to a successful conclusion is known as organizational change management, and it typically consists of three main phases: preparation, implementation, and follow-through.
There are two main two types of organizational change. These consists of: Adaptive modifications are subtle, gradual adjustments that organizations make to respond to needs that change over time. To carry out corporate strategies, managers typically fine-tune and make little tweaks and adjustments. Leadership may add, remove, or modify processes at any time.
An organization upgrading its computer operating systems from Windows 8 to Windows 10 is an illustration of an adaptive transition.
Related: Causes of organizational change
Compared to adaptive changes, transformational changes are more extensive. They frequently involve simultaneous changes to the organization’s mission and strategy, team or company structure, employee and organizational effectiveness, or business procedures. These modifications frequently need a significant amount of time and effort to implement due to their size. Transformational changes are frequently sought in response to outside influences, such as the appearance of a disruptive new rival or problems affecting a company’s supply chain, though this isn’t always the case.
The adoption of customer relationship management software (CRM), which all departments are expected to understand and use, is an illustration of revolutionary development.
Many changes will fall somewhere between adaptive and transformational on the spectrum. For this reason, managers need to understand that the change process must be tailored to the unique challenges and demands of each situation.
Related: What are the four types of organizational change?
Importance of organizational change
Companies that are better able to adjust to change that occurs organically are more likely to reap the rewards of implementing a “positive change strategy” and achieve outstanding achievements.
The following are some importance of organizational change:
Companies may soon find themselves behind the times and lose ground to rivals if they don’t undergo organizational change. To stay up with the rapidly evolving and expanding technology landscape, they must evolve and adapt. Ideally, businesses should be able to change and adapt quickly. Rigid work conditions can stifle creativity, which fosters the development of new ideas. Organizations must understand that practice, policy, good, or service must be useful now and valuable in the future.
Increases skill development
The ability of an organization to foster new talents and specialties will benefit the entire company, as well as its employees, who will become far more talented and well-rounded team members. Employees that consistently execute the same tasks will never have the opportunity to demonstrate their abilities or learn something new to contribute to the business. People will never learn new talents if they consistently do the same thing. Growth and development of skills go hand in hand with organizational change and shifting organizational culture. Employees will be compelled to pick up new skills to stay relevant in the modern workplace.
Development of People
Although convincing workers to accept change can occasionally be challenging, those who can do it with a positive outlook will benefit greatly from using new tactics in their personal development. The most valued personnel are frequently those who can recognize the advantages of change; not only will they grow personally, but they will also set up circumstances in which the firm will naturally expand along with them.
Related: Organizational Change: 8 Reasons Why People Resist Change
Businesses will continually identify and cultivate new company ideas and possibilities if they have the flexibility to accept change. Any organization that wishes to go into new markets as a result of the new working methods would benefit from having excellent change management tactics. This could either be by getting involved with other companies to expand or simply by new contacts, which leads to sales growth.
Process of organizational change
1. Get the company ready for change
An organization needs to be ready logistically and culturally to pursue and implement change successfully. To attain the optimum commercial outcome, cultural groundwork must be done before delving into logistics.
The manager’s main goal during the planning stage is to assist staff in recognizing and comprehending the need for change. They increase awareness of the organization’s many difficulties or issues, which act as catalysts for change and foster discontent with the present situation. To reduce friction and resistance later on, get this initial buy-in from the staff members who will assist in putting the change into practice.
2. Create a change plan and vision
Managers must create a comprehensive and practical plan for implementing change once the organization is prepared to do so. The strategy should specify:
- What strategic objectives does this adjustment assist the organization in achieving?
- Key performance metrics What will constitute success? What metrics must be changed? What is the starting point for the current situation?
- Project participants and the team: Who will be in charge of implementing the task of change? Who must approve at each crucial stage? Who will be in charge of execution?
- Project scope: What specific procedures procedures will be used in the project? What is not included in the project’s scope?
While having a planned strategy is vital, the plan should also take into account any unknowns or potential obstacles that can appear during the implementation process and necessitate agility and flexibility to overcome.
3. Put the changes into action
Once the plan has been made, all that is needed to bring about the necessary change is to carry out the procedures stated therein. The nature of the endeavor will determine if this entails modifications to the organization’s structure, strategy, systems, procedures, employee behaviors, or other elements.
Change managers must concentrate on motivating their staff to take the essential actions to carry out the initiative’s objectives while also acknowledging any immediate successes. In addition, they should try to foresee potential obstacles and take steps to avoid, get rid of, or lessen them once they are found. For team members to remember why change is being pursued, the organization’s goal must be reiterated throughout the implementation process.
Related: Organizational change, types and ways to ensure successful organizational change
4. Integrate Changes Into Organizational Culture and Procedures
When a change initiative is over, change managers need to stop a return to the previous situation or status quo. This is crucial for organizational change involving corporate operations like workflows, culture, and strategy development. Without a sufficient plan, employees risk reverting to the “old way,”, especially during the transitional phase.
Backsliding is made more difficult by integrating changes into the company’s culture and procedures. It is important to think of new organizational structures, regulations, and reward programs as tools to make change stick.
5. Evaluate Results and Progress
A change initiative’s completion does not necessarily imply that it was a success. Business leaders can learn whether a change endeavor was successful, unsuccessful, or had mixed results by doing analysis and evaluation, or a “project post mortem.” Additionally, it may provide insightful information and lessons that can be used for the next change initiatives.
Consider the following:
- Were project objectives met?
- If so, is it possible to duplicate similar success elsewhere?
- What went wrong if not?
Steps of organizational change
1. identify the change and match it with organizational objectives
Although it may seem obvious, many businesses fail to take this initial, crucial step. To ensure that the change will move your company on the proper path strategically, financially, and morally, it is one thing to express the necessary change, but quite another to carry out a critical evaluation against organizational objectives and performance targets. The value of the change, which will quantify the effort and inputs you should invest, can also be determined with the help of this stage.
- What needs to change, are there any?
- Why is this modification necessary?
2. Identify the effects and those impacted
As soon as you are clear on your goals and the reasons behind them, you should assess how the change will affect different organizational levels. Review the impact on each business unit and how it flows to the individual through the organizational structure. With the use of this data, a plan will begin to take shape for where the most assistance and training are required to lessen the effects.
What are the effects of the modification, specifically?
- Who will be most impacted by the change?
- How will people react to the change?
3. Create a communication plan
Even though all employees should be included in the change process, the prior two steps will have identified which workers need to be informed of the change immediately. Establish the best channel of communication with the group or person to get them on board. A timeframe for how the change will be gradually conveyed, important messages, and the communication channels and mediums you plan to use should all be included in the communication strategy.
- How will the change be announced?
- How will comments be handled?
4. Offer efficient instruction
Now that the change message is out there, your employees must understand they will receive formal or informal training to provide them with the information and skills necessary to function effectively while the change is implemented. A variety of online microlearning courses, a blended learning strategy that includes in-person training sessions, or on-the-job coaching and mentoring are all possible forms of training.
- What attitudes and abilities are necessary to produce business results?
- What delivery techniques for training will be most successful?
Related: Organizational change process: Step-by-step guide
5. Establish a framework for support
Giving employees a support system is crucial for helping them emotionally and practically adjust to the shift as well as develop the behaviors and technical abilities required to accomplish the desired business goals. You may want to think about offering assistance, such as counseling services, to help individuals deal with the situation because some changes may lead to layoffs or reorganizations. A mentorship program or an open-door policy with management that allows questions to be raised as they come up could be established to assist staff in adjusting to changes in how a function is conducted.
- Where is assistance most needed?
- What forms of assistance will be the most useful?
6. Track the evolution of the change
A framework should be established to monitor the changes’ effects on the business and make sure that chances for ongoing reinforcement to develop skills are available. Additionally, you should assess the efficacy of your change management plan and record any lessons learned.
- Did the modification help the company achieve its objectives?
- How well run was the change management procedure?
- What could have been done to make things better?