Planning and executing transformational organizational change is no small endeavor.
Organizational change is hard enough … and transformations are even harder.
After all, organizational transformations are composed of multiple interdependent change initiatives.
Recognizing this difference is a step in the right direction, but it is only one step.
To successfully plan, manage, and execute organizational change, businesses must make several such steps:
- Understanding what organizational transformation is and how it differs from organizational change
- Implementing a well-structured, sophisticated approach to change management
- Executing a change strategy that is modern, agile, and adaptable
In this article, we will look at transformational organizational change in detail, covering:
- The difference between “change” and “transformation”
- What change management is and why organizations need it to successfully transform
- The ingredients of a successful transformation effort
To start off, let’s look at the concepts of organizational change and transformation.
What Is the Difference Between Organizational Transformation and Organizational Change?
Organizational changes are discrete projects that impact specific areas of a business, such as:
These changes do impact the organization as a whole.
And, like organizational transformation, success often depends on effective change management.
However, these changes are far less complex and demanding than organizational transformations.
According to an article by Ron Ashkenas in Harvard Business Review, organizational transformations consist of:
“A portfolio of initiatives, which are interdependent or intersecting. More importantly, the overall goal of transformation is not just to execute a defined change — but to reinvent the organization and discover a new or revised business model based on a vision for the future.”
Transformations and changes can both come about for different reasons, such as:
- Improving an organization’s performance and effectiveness
- Adapting to shifts in the marketplace or economy
- Pursuing growth opportunities
For instance, a company whose core revenue model is threatened by disruptive digital technology may need to transform its business from the ground up.
Such a transformative change would involve multiple change initiatives that alter the very nature of the business.
The bottom line: transformational organizational changes have more potential rewards, but they also carry more risks.
Why Businesses Need Change Management
There are many benefits to employing a structured approach to change management, such as:
- Improved project outcomes
- Greater chances of success
- Increased efficiency of change projects
- Lower costs
- Overcoming resistance to change
Generally, the more sophisticated and well-structured the change management approach, the better the results.
Also, it is worth noting that many change initiatives fail.
Employee resistance, for instance, is commonly cited as an obstacle to change. This is one reason why so many change management frameworks are built around minimizing employee resistance and improving support.
Organizational change, as mentioned, is hard.
And since organizational transformations are event more costly, complex, and difficult, change management is that much more necessary.
How to Successfully Plan, Manage, and Execute Transformational Organizational Change
Transformative organizational change means reinventing the organization from the ground up.
It can involve changes to many – if not all – areas of a business, including:
Successfully planning and executing change may not be easy, but it is possible.
Here are a few ingredients that can improve the outcomes of a transformational organizational change:
- Commitment to structured change management. Structured change management applies change management methods, frameworks, and ideas when executing change projects. Change management often focuses on motivating employees, minimizing resistance, enabling change, and otherwise streamlining the process of change. As we saw earlier, structured change management can drastically improve the results of any change program, including organizational transformations.
- Buy-in at all levels. Support is needed from everyone involved. Employees, managers, and executives all must be supportive of the change program to ensure its success. After all, resistance will only further undermine a transformation agenda, which is risky enough as it is.
- Strong change leadership. Change leadership is just as important as change management. Leaders are those that embody the change they wish to see, inspiring other to do the same. In organizational transformations, which can be very taxing and demanding, leadership is perhaps even more crucial.
- The willingness, skills, and tools to change at every level. Transformational organizational change means just that – a fundamental change in the very nature of a business. To succeed, businesses must be open, ready, and willing to change. They must also train employees and ensure they have the tools and skills to enact change.
- A multi-pronged change strategy. According to McKinsey, successful organizational transformations require a balanced approach that is implemented across three axes: top-down direction setting, bottom-up performance improvements, and cross-functional core process redesign.
Given the challenges associated with transformational organizational change, no one should expect certain success.
However, the right change management approach and the right leadership can fuel success and improve outcomes.