Change Management WalkMe TeamUpdated June 12, 2014

Understanding Transformational Change Management

Understanding Transformational Change Management

When a company makes radical changes in its business style, structure, management and culture we call this transformational change management. Change management of this type is normally adopted by companies either at the time of crisis or for changing their position in the market by changing its technology, restructuring its products and/or by changing its management leadership. Brief information about these transformational changes is provided hereunder for your consideration.

Transformational Change by Adopting New Technology

The frequent evolution of new technologies has compelled various companies to undergo transformational change in their products and management. For instance Nokia has changed its main products several times with a focus on new upcoming technologies during last few years. In 1865 Nokia has started it business as a paper mill but after World War II they entered into the business of telephone and telegraph and manufactured cables. In the 1980s they started manufacturing televisions but later on in 1990s, during the time of Finnish recession, they transformed their business into a cellphone manufacturer. The encouraging profits in this business have enabled them to stay in it since then.

Transformational Change for Restructuring Products

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Various companies have undergone transformational change management for restructuring their products. Transformational change in Apple Computer is the best examples to understand this concept. The market share of this company was very little in 1996 and was facing losses since many years. At this time company purchased NeXT, the software company of Stave Jobs, its former owner. After becoming CEO of Apple in 1997, Jobs has focused on style and the operating systems while restructuring the product line of the company and earned prosperity by producing innovative and quality products.

Transformational Changes for Repositioning Company’s Market

In order to rebrand or reposition themselves in the market a number of companies like McDonalds etc. have undergone transformational changes. McDonalds has started facing loss in the first quarter of 2006 due to the active campaigners of anti-junk and anti-obesity food campaigns. At this time John Skinner, the CEO of McDonalds focused on the needs of its customers and upgraded the look of its stores and added healthy items and espresso drinks in its menu to transform its culture greatly. A caring, compassionate and customer focused culture of McDonald has enabled it to earn profits again.

Transformational Changes for Change in Management Leadership

Management leadership of an organization is responsible not only for inspiring employees to work hard but also for controlling challenges to its existing structure for its betterment in future. They use their vision and force to make these changes successful. Lou Gerstner, retired IBM CEO, is the best example to understand this factor of transformational change management. IBM was close to bankruptcy with the losses of $8 billion in 1983 due to its rigid culture. At this time Gerstner promoted cultural change in innovation and creativity of one of its teams and by sticking on his tough decisions he succeeded in making company more customer centric than earlier.

Thus you can easily understand the concept of transformational change management through these examples.

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