Organizational Change vs. Organizational Transformation: Is There a Difference?

Organizational change vs. organizational transformation – is there a difference?

As we’ll see below, there is a huge difference between the two.

In this article, we’ll cover:

  • The difference between organizational change and organizational transformation
  • When organizations should change – and when they should transform
  • The costs and benefits of business changes
  • How change management can improve the results of any organizational change

To start off, let’s explore the difference between these two concepts.

Organizational Change vs. Organizational Transformation: What’s the Difference?

In short, this is the difference between the two:

  • Organizational changes are discrete changes to a business. These change projects have start and end dates, specific goals, and are often limited to specific business areas. The reasons for a change project can vary as greatly as the change itself – customer demands, competitive pressure, growth opportunities, and similar causes can all prompt an organization to make adjustments.
  • Organizational transformations represent total, sweeping transformations to a business. They involve multiple interdependent organizational changes designed to make deep changes to, for instance, a company’s mission, strategy, business model, culture, and so forth. Organizations often transform in response to a crisis or some other circumstances that threaten its survival.

Though they are clearly related, they are also very different. Organizational transformations are much more complex, challenging, and transformative.

At the same time, however, they are still formed from the building blocks of organizational change.

Because of that, both involve many of the same fundamental types of organizational change.

These can include:

  • Changes that affect the workforce. Employee training, restructuring, and cultural changes are a few examples of changes that impact workers.
  • Changes to business processes or procedures. Changes to business processes, workflows, procedures, and protocols are a few examples.
  • Changes to tools or technology. These organizational changes can revolve around, for example, the digital adoption of new software, IT modernization, upgrading office equipment, and so forth.
  • Changes to the work environment. Other changes can affect the workplace itself, ranging from interior decoration to office arrangement to relocation.

The complexity and difficulty of an organizational change can vary greatly based on the nature of the change.

Cultural changes, for instance, are more difficult and time-consuming than making changes to the office environment.

The Biggest Factors that Affect Organizational Changes and Transformations

Change management – the business discipline devoted to managing and executing organizational changes – focuses on people.

After all, getting people to change is often the most difficult aspect of any organizational change.

Deploying new software, for example, is relatively straightforward.

But it is much more difficult to get people to adopt, learn, and become productive with that software.

For this reason, most change management approaches tend to emphasize areas such as:

  • Communication. Communication with employees is crucial to gaining trust, explaining the reasons for a change, and learning from employee feedback.
  • Motivating employees and earning their support. Motivating employees is essential to maximizing employee productivity and project momentum. Projects will fail unless workers actually put a change into action.
  • Minimizing employee resistance. Resistance can stem from fear, a lack of trust in leadership, or mistrust of the actual change project, among other things. Change managers make a point of identifying resistance and neutralizing it so it doesn’t impede progress.
  • Providing employees with the necessary knowledge, skills, and tools to change. To become competent, productive, and enact change, workers need knowledge around the change – such as new workflows, mindsets, tools, and processes.

Of course, the workforce isn’t the only factor that impacts change projects.

Many other things can contribute to the outcomes of a program, such as:

  • Budgets
  • The priorities of business leaders
  • Technology
  • Customers
  • The state of the marketplace

Considerations such as these should all be taken into account when developing solutions and implementing change projects.

The Benefits of Change Management

We have already looked at how change managers operate, but what are the benefits of change management?

After all, change management is a business function that requires resources, investment, time, and effort.

There are many reasons to invest in change management:

  • Improved project outcomes. The more advanced and sophisticated the change management, the better the project results. Well-structured, strategic programs invariably produce better results than projects that are poorly managed … or not managed at all.
  • Greater efficiency. Change management can reduce project overhead, decrease project timelines, improve the results of employee training, and so forth. 
  • More support from employees, partners, and executives. Change projects require support from all involved parties. Change managers intentionally earn that support and act to maintain it throughout an organizational change.
  • Reduced resistance from employees. Effective communication and a good employee experience can help minimize or even eliminate employee resistance.
  • Decreased impacts to business processes and services. Handled improperly, organizational changes can negatively impact other areas of a business. Change management reduces the risk of those impacts, which can be detrimental to an organization’s bottom line.

To name just a few.

Regardless of the scale of a project, change management is a worthwhile investment that can ensure the success of projects and add significant value to a business’s bottom line.

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.