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All companies, regardless of industry or lifespan, will go through organizational change. Most of the time, this is planned change in response to an internal or external event.
Regardless of the source of the change, how well the company comes out on the other side depends on effective management and a proper plan during the transition process.
In this article, we'll discuss how change impacts a business and how managers can navigate the process.
The dynamic nature of today’s world of business requires companies to be agile and responsive; able to quickly adapt to changing conditions. Organizational change refers to any process companies undergo as they make these transitions.
The transitions can come from shifts in management structure, adoption of new technologies, or virtually anything else. Organizational change is a broad term, but the same principles usually apply, no matter the source of a company’s significant changes to operations.
Sometimes, these changes are necessary because of external pressure. For example, the huge shift to a work-from-home culture was driven almost entirely by pandemic lockdowns. At other times, the drivers are internal, for example, a company looking to change things to better facilitate its growth or refocus its core efforts.
Whatever the reason for organizational change, management must understand how to navigate it and be prepared.
Organizational change management (OCM) is the structured approach a company takes when transitioning from its current state to a desired future state. It impacts every level of the business – individuals, teams, and the organization itself.
In today's fast-paced world and rapidly evolving technological landscape, change happens more frequently than ever.
Effectively managing change is important for several reasons:
Without a clear change management strategy, businesses might not achieve the full benefit that they envisioned from the proposed changes. In extreme cases, they may suffer financial losses, damaged reputations, and a slip in market position.
Like everything else in business, it always helps to plan in as much detail as possible.
As we've already discussed, organizational change covers many reasons a company might want to shift focus. Let's take a closer look at some of the more common ones.
Just as there are many reasons for organizational change, there are many forms it can take. These changes aren't mutually exclusive; sometimes a company may experience more than one at a time.
Strategic change is a fundamental shift in a company’s direction, purpose, or mission. Companies often reevaluate their position in the marketplace and decide changes are in order. These changes may be a new business model, redefined target audiences, or a pivot to new products or services.
A company’s goal through a strategic change is to remain relevant and competitive through conditions that might have a negative impact if the change wasn’t occurring.
This type of change covers anything that relates to the human aspects of a business. It could mean shifts in personnel, leadership shakeups, or an attempt to alter the company culture.
The purpose of this type of change is to ensure employees are aligned with the evolving objectives of the company. Initiatives such as training programs, team-building exercises, and leadership development programs are often a part of people-centric changes.
This type of change occurs when a business needs to modify its organizational framework. It could involve department mergers or the creation of new departments, downsizing or expansion of staff, changes to management hierarchy, or any other structural change.
These changes often come when a business realizes its operational efficiency can be improved by making such changes. The goal is typically to improve workflows and productivity.
Companies are continuously seeking to stay at the cutting edge of technology in their industry. Technological change happens when old systems need to be updated. It can be changes in local software, more advanced machinery, or a transition to cloud-based solutions.
In addition to the changes in technology, this type of organizational change often requires training staff in the new technology.
This type of change is the result of some unforeseen circumstances that the company must adapt to quickly. We've seen the example of the pandemic lockdowns, but events such as market disruptions, regulatory shifts, and economic issues can all prompt similar needs for organizational change.
The negative impact of this type of change can be mitigated with improved risk assessment and contingency plans.
Although technically just a form that any of the previously mentioned types of change can take, incremental change is worth mentioning as a separate item. Changes don't always have to happen immediately. Sometimes, a business bakes an end goal into a lengthier timeframe, preferring to make incremental steps rather than one giant leap.
When rapid change isn't necessary, incremental change can allow management time to refine each step and adapt future ones before moving on.
Whenever (and whatever!) organizational changes are needed, take the time to make a plan to ensure a smooth transition. This starts by assessing your current state and defining a clear vision for the end state.
At this point, engage key stakeholders with open communication channels. This allows everyone to provide insights about how the change may affect them, so you can develop strategies to mitigate negative impacts.
With the plan in place, begin the process of allocating resources and preparing training, if applicable. Now is also a good time to find staff members in all areas of the organization who can serve as change champions and help guide and influence their peers.
Before you begin making the changes, implement feedback mechanisms so concerns can be expressed and resolved early. A pilot program before the full-scale rollout may also prove helpful.
As company leaders, managers play a pivotal role in organizational change. Their influence determines the direction, pace, and success of any change initiative. Management is responsible for setting the vision and objectives for change and providing a clear roadmap.
How well management conveys the reasons for the change and its benefits determines how much resistance there will be to the change from employees. The leaders’ commitment and involvement set the tone for the staff's enthusiasm for the project.
At various points in the change process, leadership will wear many hats. In dealing with superiors, subordinates, and peers, there are a lot of relationships to be managed during an often stressful change process.
Managers are the company’s voice for the people who work for them. They are responsible for relaying information about the change to all relevant members of staff.
They'll need to make sure everyone understands the reasons for the change, its benefits, and the details of its implementation. This will reduce the uncertainty and misconceptions, helping to reduce resistance to the change and ensure a smoother process.
Managers aren't only dealing with the people who work for them. They're also dealing with their peers: managers from other departments. They facilitate the flow of information between departments and aim for all departments to be on the same page regarding the changes.
Managers may also be the liaison between customers and vendors, helping identify the change and making clients aware of how the change might impact deliveries, product quality, and pricing.
Management always needs to advocate and support the change. As the tone setters for the rest of the company, their attitudes will play a key role in getting everyone on board.
For those employees who are resistant to the change, management can help them understand why it's necessary and/or beneficial.
Sometimes, advocacy alone isn't enough to temper resistance to organizational change. For those times, leadership needs to go a step further. By listening to employee concerns and offering solutions, management can turn hesitant employees into advocates.
Everyone assuming this role must be well-versed in the changes so they can properly address issues and clear up any misunderstandings.
Some changes are harder than others. In challenging cases, employees will need help adapting. A manager's role here is to provide staff with the resources and training needed to get up to speed with the new way of doing things.
Encouragement and constructive feedback are also vital elements of effectively coaching staff through a major change.
We've seen the importance of having a plan before you embark on any major organizational change. Now, let's take a look at some of the elements that need to go into that plan:
Change management is hard, but preparation is key to a successful transition. A change management plan acts as a roadmap, guiding organizations toward successful implementation while maintaining employee morale, productivity, and organizational stability.
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