4 Types of Organizational Change, Explained

Kirti Sharma Change Management
4 Types of organizational change, explained

Recognizing the need for change and knowing how to make that change successful are two very different skills. Strategy is key, but where to begin? It all starts with understanding what types of organizational change you’re making.

Organizational changes are those that have a significant impact on the organization as a whole. Major changes to personnel, company goals, service offerings, and operations would all be considered as forms of organizational changes. It’s a broad category. Before you can design your change management game plan, you must determine the type of organizational change you’re making.

Identify the types of organizational change you’re making

Different types of organizational change will require different strategies. Everything from the implementation plan to the communication should be tailored to the type of change you want to make. Before you begin strategizing for change, ask yourself: Is this a strategic, structural, people-centric, or remedial change?

Strategic and structural changes may call for additional training and gradual transitions, while a remedial change would require immediate action. People-centric changes, on the other hand, benefit from a well-thought-out change management communication strategy, so you can navigate emotional reactions.

So, here is a detailed description of the four types of organizational change, along with examples for each one of them.

1. Strategic transformational change

All changes will affect some aspects of a company, but not all changes are transformational.
Minor modifications to existing tools or policies will influence but not completely redefine a business. Big changes, on the other hand, transform companies. Whether that transformation is positive or disastrous depends on the strategy used to make it.

If you want serious results, you’ll need to do some serious planning. You need to identify what the ultimate goal is and then design a plan to achieve it. Preparation and ongoing change management are essential for implementing these large-scale types of organizational change.

Examples of strategic transformational change

Updating your mission as you grow
When companies first launch, the initial focus is often on lead generation and getting clients through the door. However, once the company has an established customer base, the focus could shift to upselling, for example. When the main mission changes, the company mission needs to evolve as well.

Introducing new technology
Technology is designed to make our lives easier, but learning curves can make technology-related changes tricky to implement. People generally prefer to stick with what they know.

When you introduce new technology, you need to have a solid plan for the transition. People want to know why the technology is necessary, what makes it better than previous solutions, and how you are going to support them during the transition.

For example, if you plan to switch from an outdated CRM to Salesforce, start by justifying the change. Explain that Salesforce will allow the team to manage leads while also engaging with current customers. Be sure to point out key benefits, like keeping marketing, customer relations, and detailed analytics all in once place. You can build confidence in the change by explaining that the transition will be supported with various change management tools that offer capabilities such as in-app training, weekly check-ins, and an internal chat for handling questions.

Training on new skills
Additional training is a great way to support existing talent while also helping the company evolve. It’s important that employees understand that the goal is to support new strategies as opposed to fixing deficiencies. When presented properly, additional training will be viewed as a benefit. Employees will see that you are willing to invest in their personal growth.

Strategic transformational changes should be made gradually and monitored closely. Transformations don’t happen overnight. You’ll need to make adjustments and work closely with your team as your strategy shifts.

2. People-centric organizational change

While all changes affect people, people-centric types of organizational change include instituting new parental leave policies or bringing on new hires.

Even if you think employees will be excited by the change, an empathetic approach is key because emotional reactions are common. In fact, many change management models, such as the Kübler-Ross Change Curve and Satir Change Model, focus specifically on managing emotional reactions to change.

4 Types of Organizational Change Explained

 

In a previous post, we discussed the importance of asking, “what’s in it for me?” (WIIFM) and “what does it mean to me?” (WDIMTM). Answering these questions for employees is vital when making people-centric changes.

Examples of people-centric change

New hires
Bringing on new team members requires onboarding and training, which can affect both the new hires and the established employees. Start with communication. Explain the reason for hiring new people. Are they going to lighten the workload? Will they fill in skills gaps? How will they integrate with the current team?

Be ready to answer the WIIFM and WDIMTM questions and have a solid plan to avoid negative reactions. Get ahead of concerns like the extra time it will take to train the new employees on existing tools.

If you explain that the Whatfix Digital Adoption Platform will quickly get employees up to speed on current software, you will show your team that you anticipated their concerns and planned ahead. You’ll be introducing change as a solution instead of an obstacle.

Changes to roles and responsibilities 
Job descriptions can evolve over time. Changes to an employee’s responsibilities may require additional training and restructuring of teams. Of course, shaking up routines is a delicate process. It’s essential to have a strategy for change implementation and communication.

People like purposeful change. Communicating the value of the change is essential. If you are adding a responsibility to someone’s role, such as delivering monthly email marketing reports, the employee will be more likely to receive the news well if she understands why.

Consider the following options for announcing the new responsibility:

Option A: “Starting next month, the marketing team will be required to use Oracle to create monthly reports on email marketing efforts.”

Option B: “Oracle’s built-in analytics simplify the process of monitoring email marketing efforts and running reports. Harnessing those analytics will allow us to create detailed reports for clients and offer them more value. Starting next month, the marketing team will be in charge of creating and delivering reports to clients. ”

Which option do you think would be better received?

Policy changes
Navigating policy changes is complicated. When you alter policies that directly affect employees, such as parental leave, vacation, or remote work policies, you risk extreme reactions. Employees could feel cheated. As always, communicating the why behind the change is key. Employees may not like the reason, but they will appreciate your honesty.

Remember, people-centric changes are prone to emotional responses. Prepare for the emotional journey and be ready to guide your team towards acceptance.

3. Structural change

Structural changes involve major shifts in the management hierarchy, team organization, and the responsibilities attributed to different departments, employees, or teams. These changes often overlap with people-centric changes as they directly affect most, if not all, employees.

Examples of structural change

Mergers and acquisitions 
Mergers and acquisitions are the most common cause of structural change. Eliminating role redundancies, redefining goals, clearly defining new roles and responsibilities, and training on technology are all important parts of managing change during mergers and acquisitions.

The Lewin’s Change Management Model works well for mergers and acquisitions because it focuses on creating a new status quo. It has three steps: unfreeze, change, refreeze.

4 Types of Organizational Change, Explained

 

After you unfreeze the current processes, you move onto change. This step should be gradual. This is when strategy is so crucial. Difficult changes, such as eliminating redundancies, require continuous and open communication. Encourage feedback and listen as much as you talk. Once the changes are in place, you “refreeze” or solidify the change as the new status quo.

The creation of new teams or departments
Structural change can also apply to smaller adjustments, such as creating a new team. If you notice that some employees have more of a knack for analytics, you might decide to create a separate team dedicated to reporting. The necessary shifting of personnel and duties could create some tension. Justify the change with clear reasoning and explain the benefits. Highlight the positives. It’s not about taking away responsibilities – it’s about playing to each individual’s strengths.

Changes to the company organizational chart
Promotions and new roles call for updates to the organizational chart. When moving people around, be sure to celebrate wins, like promotions, and explain adjustments, such as merged departments.

Structural changes influence how your company functions as a whole. It’s never an easy transition, but solidifying the change as soon as possible can help you avoid major issues down the line.

4. Remedial change

Remedial changes are reactionary. This type of change occurs when a problem is identified, and a solution needs to be implemented. As these changes are designed to address an issue; they call for immediate action. Reactionary change may not be ideal, but it’s inevitable. The benefit of remedial change is that judging its success is quick and simple. Was the problem solved or not?

Examples of remedial change

Dealing with a loss of talent
When someone in a key position at the company decides to leave, you must adapt quickly. Your team will have questions. Will someone move into the role, or is the company searching for new candidates? Who will take over the responsibilities immediately? How will this affect day-to-day operations?

Unexpected changes in personnel are difficult to prepare for. If you are blindsided, take some time to put together a statement. Announcing an employee’s departure before you have answers to the inevitable questions is a recipe for disaster. Your employees will look to you for guidance. Make sure you are ready to provide it.

Addressing customer communication issues 
There is a huge difference between simply handling communication with customers and having an effective communication strategy. If what you’re doing isn’t working, you need to adapt quickly.

Gaming company Activision realized that each time they released a game, customers had a lot of questions and feedback. Agents were prepared for a surge of incoming calls, but Activision realized that their customers preferred to go straight to social media. They had to change their process.

Activision used Salesforce to implement Marketing Cloud’s Social Studio. Marketing Cloud automatically tracks relevant tweets and social media conversations and uploads them to Service Cloud. Now, customers can either be directed to self-service solutions or connected to a live agent.

“It’s an incredible change,” Tim Rondeau, Activision’s Senior Director of Customer Care, told Salesforce. “We’re reducing costs and increasing satisfaction at the same time.”

It’s easy to use stories like this one as a reason for a change, but don’t forget to present answers to WIIFM and WDIMTM. If you were to announce a similar change to your customer service team, you’d want to focus more on how it affects them personally. In this case, the WIIFM is that employees will spend less time on repetitive questions. The WDIMTM is that they’ll need to be trained on Salesforce Marketing Cloud.

Providing more training for new hires
Highly inefficient processes often lead to remedial changes. You might notice that new employees are struggling to learn internal tools and software. As a result, they are running to established employees with questions. Time is wasted, and everyone ends up frustrated.

In this case, the remedial change could include a combination of a user onboarding program for application training, a company wiki for basic company knowledge, and an onboarding handbook with knowledge resources that promote self-guided learning.

Remedial changes begin with an issue and end with a solution. It seems simple, but since these changes are reactionary, they can often involve some trial and error. Quick action means you won’t have as much time to plan or transition. The strategy comes into play through monitoring the change. The remedial change is only successful if the identified problem has been solved.

Know your change and own your strategy

Designing a change implementation strategy before identifying the type of change you are dealing with is like skipping to chapter 10 in a mystery novel and expecting to solve the crime. You’re setting yourself (and your change) up for failure. Take a step back and think about why the change needs to happen. Consider the obstacles. Think about who and what the change affects. When you truly understand the type of change you’re making, you can dive into strategy.

Every change involves a learning curve. Whatfix Digital Adoption Solutions make the transition to new tools simple through interactive in-app guidance. Contact Whatfix to discover how we can help your organization.

Kirti Sharma

Kirti Sharma

Kirti handles product marketing at Whatfix and has spent about 12 years in the technology industry in go-to-market and product marketing roles. Driven by curiosity and the drive to get things done, at Whatfix she looks for ways to establish and grow the Whatfix platform
Kirti Sharma

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