Change management and organizational development are critical business functions, especially in the modern age.
Corporations, startups, and SMBs should all understand and develop these capabilities.
Here are a few reasons why:
- Organizational change is becoming more frequent in the digital economy
- Change management can mean the difference between success and failure
- Project ROI depends, to a large extent, on the effectiveness of change management
Below, we will cover the essentials of organizational change, organizational development, and change management.
Organizational Change, Change Management and Organizational Development: Key Concepts
Here are some of the must-know concepts related to change management:
Organizations are not static.
They change continually – sometimes gradually, sometimes quickly.
Some changes are intentional, and some are organic.
Organizational change typically refers to intentional, strategic changes that are initiated by the organization.
These changes can include changes to:
- Processes – Such as procedures, standards, operations, and workflows
- People – Cultural changes, hierarchical restructuring, and job duties, for instance
- Strategy – Including shifts to an organization’s missions, aims, and marketplace strategy
There are many different types of organizational change, which can all be modeled differently, depending on who you ask.
Reasons for these changes can include:
- Growth Opportunities – New technologies, customer demands, or market shifts, for instance, can compel organizations to initiate new changes
- Competitive Pressure – Competitors are another reason that push companies to transform
- Changes to the Status Quo – The digital landscape, for example, makes it necessary for every company to adopt new digital technologies and even change their business models
To name a few.
Organizational development is the study of successful organizational change.
During the last century, this discipline emerged as an approach to efficiently manage and guide organizational transformation.
Key concepts of organizational development include:
- Organizational Climate – Behavioral patterns, feelings, attitudes, and perceptions of the people within an organization
- Organizational Culture – The beliefs, assumptions, and ideas shared by the organization, which shapes and affects the organizational climate
- Organizational Strategies – The organization’s mission, purpose, and strategic aims within the context of the marketplace
In practice, these ideas help organizational development professionals systematically lead, manage, and optimize change efforts.
Change management shares many of the same goals, principles, and ideas as organizational development.
The ideas of Kurt Lewin, for instance, have proven instrumental in the development of both fields.
His model of organizational change helped inspire many of today’s most popular change management frameworks.
In practice, change management delivers business value by:
- Analyzing problems, risks, and change readiness
- Developing solutions and designing roadmaps for change
- Managing, optimizing, and possibly leading change efforts
These quick definitions can provide a basic introduction to change management.
However, change management, as with any other business discipline, is complex and sophisticated.
Understanding Organizational Change Management
This article just scratches the surface.
For more in-depth information, it is advisable to research change management topics, such as:
- Change frameworks
- Change management strategies
- Change management blogs
- Employee training and onboarding
- Change management certifications
- Digital change, such as digital transformation and adoption
The best place to start, of course, is the WalkMe change management blog.
Why Change Management?
We have covered some of the basic concepts around change management.
But the most pertinent question for many business professionals is ROI.
In other words – what is the business value of change management?
Here are a few reasons why companies invest in change management:
- Changes are necessary – but unmanaged changes frequently fail. High failure rates can be traced to a number of causes, such as bad leadership, poor communication, or lack of executive sponsorship. Experienced change professionals are aware of such obstacles and make plans to overcome such obstacles.
- Management improves project results, increases efficiency, and mitigates risk. Change management can improve results across the boards – decreasing costs, enhancing results, boosting engagement, and increasing ROI. Good management, in short, delivers better results.
- Effective change management helps align an organization with change projects and the workforce. Unmanaged changes can decrease organizational harmony. A change program, for instance, that isn’t synced with the company’s strategy can decrease alignment between departments and business functions.
- Change management aims to overcome resistance and other obstacles to change. Change is not barrier-free. Experienced managers know which obstacles tend to reoccur and they have strategies to handle those obstacles.
- Companies that can’t change will have trouble keeping up in the fast-paced digital economy. Change is a requirement, especially in today’s volatile marketplace. Innovation and disruption are fueling widespread digital transformation and organizational change. In such an environment, companies that can manage change well will be able to adapt, survive, and thrive.
The decision is usually not “Should we manage change?” but “How will we manage change?”
As we have seen, change management can deliver significant business value.
When assessing their stance on change management, companies should perform thorough cost-benefit analyses.