What is organizational change?

The term Organizational Change refers to a complex transformation scheme that takes place in a company. It has an impact on systems, structures and processes.

Normally, this phase implies a radical change in the organization’s strategy.

The new strategy determines how roles, skills and behaviours or ways of working are  going to be redifined.

 

Examples of organizational changes can be:

  • The introduction of a new technology
  • The automation or digitalization of processes that were previously carried out in an analogue or manual way
  • Change of leadership at C-level and consequent change of strategy
  • Activation of a business continuity plan, for example in times of corona crisis
  • Moving from a rigid business model to an agile organizational structure

All these examples inevitably lead to redefining the company’s vision and value-set.

 

The theory of organizational change is particularly relevant for companies when it becomes clear that this transformation needs to be supported in a professional manner; if once there was a tendency to present the company and its employees with a fait accompli, it has become increasingly clear that all parties affected by this transition must be personally involved and participate actively in the change.

 

A well-made transition can prevent the company from suffering major damage in terms of efficiency, employee retention and sustainability.

What are the goals of organizational development?

Organizational development should not be seen as an obligation; in fact, there are plenty of companies that work very well already.
For them, putting their efficiency at stake only for the sake of running after some corporate trends would be crazy.

The important thing at management level is to be aware that patterns and models that have worked perfectly until that moment, may one day no longer do so.

Therefore, the question you can ask yourself is whether or not your way of operating as a company is currently the best possible response to the needs and the inputs coming from the outside market.

If the answer is yes, congratulations! You are doing great.
In general, we expect the answer to be less than a hard yes.

In that case, the goal of the organizational development becomes clearer: to best respond to the needs, expectations, inputs and market trends and allow the different departments in the company value chain to adapt, so that they can first and foremost work better together, but also achieve better results and better position themselves on the market, by responding to the current zeitgeist.

What are the different types of organizational change?

Heraclitus understood it more than 2500 years ago: “the only constant in life is change”. Inevitably, this is also true for businesses, regardless of their field and size.

Change is not only part of the natural evolution of a company, but it has actually become a “must” in today’s rapidly evolving and digitalized business world.

Let’s have a closer look at the 3 main types of organizational change.

People change

Massive hiring of new workforce, significant layoffs, new behavioural policies, etc.
Such changes alter the existing dynamics significantly, as they affect the relational, emotional and influential level of the involved parties.
Managing these changes effectively requires a high level of empathy and exceptional communication skills.

Structural change

Redefinition of roles and responsibilities, upper management change, different departments being merged or one department being divided into two or more… Adaptation time, feedback from the people involved and the buy-in from managers at all levels are key factors for a structural change to be successful.

Transformational change

This is possibly THE organizational change par excellence.
A brand new company mission, a radically different strategy, a technology that suddenly revolutionizes the “usual” ways of working…
This type of organizational change entails a carefully planned change management process, inspirational leaders and effective tools to make the transition as smooth as possible.

Why is organizational change important?

Change is the precursor of all growth, and the opposite of change is stagnation.

A theory that explains how we can be victims of stagnation is the S-curve, also known as the Complacency Curve.

In the past, organizations adopted a purely vertical strategy, which pushed them to reach the top of the benchmark and to assume that after this spike nothing could undermine their dominance on the market.
Numerous companies did not realize that this was a trap, as this position of domination can be undone very quickly if you do not pay attention to new trends, how markets evolve and what their needs are.

Back in the 90s, Nokia refused to integrate cameras into their mobile devices, assuming they had already placed the best that could be conceived in terms of a portable phone on the market. They were wrong, and with them also Blackberry, Kodak, and several other victims of the complacency curve.

But what exactly does the S-curve theory consist of?

The complacency curve – or S-Curve, suggests stopping the development of a product or organization before the zenith of their success has been reached, and getting back into the game completely.

The organizational change is the systematic implementation of this methodology, turning it into an extremely important process because it challenges the status quo and allows you to think in a more innovative and healthy way for your company.

What are the benefits of change in an Organisation?

It is known that the survival of the species does not necessarily depend on how strong or intelligent that species is… but on its capacity to adapt to change.
However, unwanted or unexpected transformations can be extremely stressful, especially in a work environment, where getting properly prepared for a change also means taking all affected parties into account.

In order to efficiently act as coaches, our role in managing the emotions that are involved in the transition period must be clear.

In fact, if the change is unwanted, or if an effort is made by the people involved, it is fundamental to activate the sympathetic system as little as possible and the parasympathetic system as much as possible.

When activated, these two parts of the nervous system are responsible for creating a sense of anxiety and stress and of resonance and trust, respectively.

So while organizational change brings benefits on an operational level, practicing professional change management has a beneficial effect on morale, productivity and the quality of the results.

Cooperation between the parties is encouraged, as well as communication and collaboration.

A carefully planned organizational change plan contributes positively to reducing the stress which is naturally connected to the transition phase; employees feel less inclined to look for a new job elsewhere and are more loyal to the current employer.

If the involved parties manage to understand and identify themselves closely with the strategy, the general acceptance and collaboration towards the transition and its implications are greater.

What triggers Organizational Change?

We can identify both external and internal agents that can cause a transformation in the company.

These agents are called Triggers of Change, referring to any given disorganizing pressure that comes from outside or from within the company.
These signals represent the evidence that the organization’s structure is no longer efficient and a transformation or revision is needed.

External agents that trigger a transformation can be:

  • Development of a new technology
  • Transformation of customer preferences and expectations
  • New laws and regulations
  • Changes in national and global economic conditions
  • Change in trade and exchange policies
  • Transformation of social and cultural values
  • Innovations and various obstacles encountered with rivals and competitors

 

In addition, here are some of the internal factors that might trigger the need for transformation:

  • Innovations in manufacturing processes or development of new procedures
  • Introduction of ideas aimed to offer greater customer value and improve customer satisfaction
  • Logistic changes that bring the product/service more or less close to customers, suppliers, and the market
  • New products and service design
  • Appointment of new managers and administratorsù
  • Outdated training courses, inadequate information management

 

These factors can trigger a change in the organization of business activities and therefore change management helps to steer the process and to get faster and easier control over the desired results.

How do you handle Organizational Change?

Nobody was born with skills in managing organizational change.
These require many years of practical experience to be consolidated. With that in mind, here are some tips for better preparing for this mission.

Understand the reasons of change

There are no comparable transformation processes, each in itself is a unique event: Having a clear understanding of the starting conditions (Point A) at the desired conditions (Point B) is the initial priority that allows you to operate within a well-defined framework that better helps you find your way.

Understanding the forcefields of change

What are the internal and external pressures that drive change?
Understanding why a change is needed is crucial to manage it effectively.

Create a plan

The plan mapping must define the reasons for the transformation, the range of action, identify the stakeholders, create a task force, outline a detailed roadmap of the steps necessary to make the change.
Having a well-defined strategy will simplify your life and you will always have a point of reference to monitor your progress.

Communicate

During transition, communication is the most important tool you have at your disposal..
The communication plan must include employees, so that they understand as much as possible the reasons for the choice and the impact that this transformation will have on their role and their responsibilities, as well as key stakeholders, responsible for living the change by example.
They are likely to be the project’s sponsors, but you will be in charge of monitoring its development.

Get ready for a plan B

No matter how well you prepare, not everything will go as you thought!
It is always wise to be prepared for different scenarios, which will allow us to simplify complexity and correctly address potential problems.

Why is it difficult to accept change?

Faced with the perspective of change, very few people react enthusiastically, unless the benefits of this change are clear.

So here is the first clarification: we are attracted to changes that bring us individual benefits, and for which no particular effort is needed.
Winning the lottery, for instance, will be indiscriminately frowned up by anyone.

Unfortunately, most transformations are imposed upon us and we do not truly understand the need or sense of urgency, as we are rather forced to accept those.

What are the forces that play a role, when confronted with changes that we have not decided voluntarily?

There are two mechanisms we need to keep in mind, where the brain is involved by activating specific parts.

Primarily, there is a sense of primordial rejection, activated in the section of the brain responsible for our fight-or-flight reaction, which identifies a possible danger in every change and sends alarm signals to the body, that biologically produces stress hormones.

The second point also has to do with the way our brain works and how it manages its energies.
Learning something new is a process that is highly energy-consuming. Once this is done, the process is stored in a part of our brain where it becomes automated.

Accepting change means preparing to reactivate our ability to learn, which requires very high energy consumption and whose perspective must be made appealing by a motivating reward.

What skills do you need for change management?

Organizational skills are needed in the first place.

A change manager needs a clear understanding of the expected result; they must know how and when to include the several stakeholders with an individual and tailored change program.
The ability to grasp the force fields that possibly create a bottleneck, or perhaps support the change instead. Understanding what role these forces play is of fundamental importance.

Crucial aspects here are the experience in assessing the preconditions, but also the knowledge of the company and the ability to understand what are the internal relevant dynamics.

The capability to create an empathic resonance with the individual or groups involved in the transformation is worth to mention.

We talk about interpersonal skills, that allow going through the change process within framework, based on a trustworthy and mirroring rapport with the client.

Communication skills will be used by the change manager to present an inspiring storyline that will take the stakeholders along the change curve.

Each stakeholder on this change curve finds themselves at a different stage and has individual change acceptance levels.

The coach’s awareness and knowledge of the territory where they are operating, their capability to address the specifics and bring the involved groups to hit the target will make the difference in managing a transformation process.

Get The Coaching Heads right on Your Inbox

Subscribe now and discover the best tips and strategies about Communication styles, Coaching techniques, Transformational leadership, Performance management and much more.

Leave a Reply