How to Model Change: 3 Types of Business Change

How to Model Change: 3 Types of Business Change
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How do you model change in business?

Well, it depends on the nature of the change.

Perhaps you’re acquiring a company … or perhaps you’ve been acquired.

Maybe you’re adopting a new software platform.

Or maybe you’re changing your revenue model.

In each of these cases, the way you model change will be different.

How You Model Change Depends on the Type of Change

The first step to modeling change, therefore, is to understand the nature of the business change.

It’s impossible to apply a people-driven change model to a process-oriented change model, for instance.

Below, we’ll look at 3 of the most common types of business changes. And for each change, we’ll explain the nature of the change, then look at examples.

Also, before we begin…

It’s important to note that many changes go hand-in-hand with one another.

A change in the company’s culture, for instance, may come as a result of a structural change.

Acquire a new company and expect cultural changes, structural changes, and process changes.

Of course, some change types are isolated.

Some types of process changes, such as ITIL (mentioned below), don’t impact the business structure itself.

That being said, let’s look at a few types of changes that can impact an organization.

1. Worker-Driven Change

The bottom line is that most types of change are fueled by people.

Take cultural change, for instance. Everyone is familiar with workplace culture, or company culture.

The culture of a company impacts various aspects of the business, such as:

  • The company’s atmosphere
  • How employees interact with one another
  • Workflows and work processes

The culture of a workplace can be high energy, low key, stressed, depressed, relaxed, casual, formal … the list goes on.

Changes to the company culture can occur for a variety of reasons, including:

  • Mergers and acquisition
  • Leadership change
  • Deliberate culture change initiatives

Though the cause of a cultural change can differ, one thing remains constant – cultural changes are people-centered.

Workers must change in order for culture to change.

Therefore, change managers use people-centric models for this type of change.

Specific blueprints have been designed to model change that centers around employees.

For example:

  • The Lewin Change Model examines such business changes in a 3-step process: unfreezing the status quo, transitioning to a new one, and re-freezing it.
  • Kotter’s 8-Step Change Model acts as an action plan or checklist, explaining how to envision, enact, and cement change.
  • Prosci’s ADKAR Model follows a 5-step process for engaging employees, enabling change, and reinforcing it.

The-Many-Uses-of-ADKAR-Infographic

Source: prosci

These change models are very well-known in the field of change management.

They’re excellent for modeling people-centered change.

But, as we’ll soon see, they don’t fit every single scenario.

2. Process Change

Many types of business change require people to change. They must learn new skills or adopt a new company culture or adjust to a new company structure.

However, not all changes are people-centric.

Certain types of changes, such as product changes or changes to services, don’t require big internal shifts.

For this example, let’s look at IT services management (ITSM).

A change to an IT service – such as adding or removing a function – doesn’t always require workers to change.

In many cases, these process changes are just “another day at the office.”

For such scenarios, focus groups, cultural training sessions, or team building exercises would be irrelevant.

Instead, you need a system for streamlining process changes.

In the case of ITSM, process change frameworks, such as ITIL, come into play.

Unlike people-centered change models, these frameworks are process-centric. They provide a set of procedures for changing services, products, and processes.

Using these changes, employees can easily request, implement, and evaluate process changes.

3. Business Model Change

Finally, we’ll look at a business model change.

Imagine that your business itself needs to change its revenue model, its value proposition, or its core product offering.

Adjustments to the business model – large or small – can mean multiple changes throughout a company.

Over the course of a company’s lifespan, it is not unusual for it to change its business model … even several times.

The result can involve:

Whether a company adjusts a small portion of its business model or changes it completely, the impacts can be widespread.

Naturally, it’s important to have strong change leadership and change management during such changes.

Conclusion: Managing Change Effectively Means Starting with the Right Model

We’ve seen 3 overarching types of business change: people-driven change, process-focused change, and business-focused change.

In many instances, transformations will entail multiple types of change simultaneously

Successfully implementing change begins with understanding the nature of the change.

Once you do, then you can apply a change model, institute a change process, and lead organizational changes.

Chris is the Lead Author & Editor of Change Blog. Chris established the Change blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Change Management.