What is organizational change?
Running a business isn’t easy.
Whether you’re the owner of an entire corporation or the manager of a single (but important) department, you’re bound to have encountered a whole series of never-ending issues.
Those you can deal with.
In reality, the ones that cause frustration are the problems that refuse to go away… no matter what you do.
Perhaps it’s an advertising strategy that never converts any leads. Perhaps it’s something a little bigger, like a constant source of conflict between two team members.
It’s disheartening, to say the least. It doesn’t have to be. In these moments, you have two options.
- Resign yourself to a constant barrage of complaints.
- Revisit the drawing board, identify the cause, and implement organizational change.
Table of Contents
What is organizational change?
Organizational change refers to the process used to shift a corporate environment from one state to a different, more advanced, version of itself.
It can be used to fix major issues in a company or to adapt current operations and help you remain competitive. An organizational change might entail:
- The adoption of new automation technologies.
- Investment into building a concrete work culture.
- A complete expansion of your company infrastructure.
The reasons for organizational change
Every business has its own goals and priorities. Where one chases profit, another genuinely wants to help their customers.
As such, entrepreneurs tend to have varying reasons for implementing organizational change. Scalability. Agility. Flexibility. Largely, it can be used to further your business mission.
In the past, companies who have undergone organizational change did so to:
- Upgrade employee experiences to retain talent.
- Increase efficiency to reduce costs.
- Implement a new policy to adapt brand perceptions.
However, in 2022, there’s a new cause on the scene. One that’s becoming more and more time-sensitive.
Today, the most typical reason for organizational change amongst 89% of businesses is digital transformation. They’ve recognized a need to respond to the demands of their market and consumers.
The different types of organizational change
Over time, all businesses will have to change. It’s unavoidable. Even Disney, which was established in 1923, has recently changed a huge segment of their business model through their movie streaming app.
Well, if you don’t evolve with the times, you’ll eventually outgrow your original plan.
Say, for example, you have an office that sits 20 people. What are you going to do when you hire your 21st? You’ll start preparing to move, right?
Essentially, to keep growing (and secure the survivability of your company), you’ll have to adapt a variety of core operations. These will fall under the main types of organizational change:
- Strategic change
- People-orientated change
- Structural change
- Technological change
- Remedial change
Depending on the capacity of your business and your current operations, each will require an in-depth plan, large amounts of communication, and a complex employee-centric approach to change.
What is strategic change?
A strategic change is the adaptation of the fundamental elements that make up a business and it’s core operations. This includes the products it has on offer, the growth plan it adheres to, and the service it provides to customers.
For example, if a company decided to alter the value stream of its products (or launch new ones entirely), this would be considered a strategic change.
What is people-orientated change?
A people-orientated change is a deliberate evolution of the attitudes and behaviors of your employees, customers, and stakeholders.
Internally, this might require an extensive learning and development strategy that helps your staff members to gain a desired skill set (i.e. digital proficiency) to improve their output and performance.
What is structural change?
A structural change refers to a dramatic shift in the way a business operates.
According to Investopedia, it’s usually brought on by both major economic developments and a change in the market.
What is technological change?
A technological change is an introduction of additional digital platforms and programs that aid leaders in running their business.
Every company that has purchased software as a service (which is one of the UK’s largest ICT markets) in the past few years has undergone some level of technological change.
What is remedial change?
Remedial change is the strategy used to create a solution for major problems faced by a business and its stakeholders. In some cases, remedial change is an urgent requirement… not a luxury.
Examples of organizational change
While change can feel nerve-wracking for many business leaders and persuade you to put it on the back burner, you have to face a harsh reality. Your ability to survive in today’s climate comes down to your ability to adapt, often requiring a concrete change management strategy.
Throughout time, you can look at some of the biggest companies dominating today’s market, and recognize that they’ve had to encounter a variety of challenges… and then overcome them.
Organizational change example 1: Nintendo
Before the 1970s, Nintendo sold traditional playing cards. They would quickly go out of fashion.
As the entertainment market changed around them, Nintendo recognized a vital need to increase its product portfolio. They proceed to embrace structural change, hired developers and storytellers, and started producing a variety of arcade games.
Welcome to the world, Super Mario.
Organizational change example 2: Netflix
Netflix also had to change its business model to survive.
In 1998, they were selling and renting DVDs which arrived through the mail. It was a lengthy process with significant costs and a low-profit margin. In 2007 – after noticing a period of slow growth – they revolutionized video streaming.
Blockbuster, who did not adapt, was left behind to die.
Organizational change theories
It’s clear, then, that organizational change is a crucial element of a business’s long-term strategy. Thankfully, there are plenty of tried-and-tested theories out there that guide firms, and their employees, through the process.
1. Systems management theory
The human body is made up of millions of hard-working components. So are businesses. Without your technology, people, processes, and goals… you’d be nothing. The systems management theory suggests that harmony between all elements of your organization is the secret to implementing change and letting the larger system “function optimally”.
2. Stage theory
Next up comes the stage theory of organizational change, which depicts that every big achievement requires a series of small steps. Every little thing you do adds up to the whole.
“The stage theory is based on the idea that organizations pass through a series of steps or stages as they change. After stages are recognized, strategies to promote change can be matched to various points in the process.” – Health Behavior
3. Complexity theory
Change is just a series of interactions. The complexity theory looks at the bigger picture of understanding how systems grow, adapt, and evolve. It details how the touchpoints between various inputs provide a foundation for change.
How to implement organizational change
There is one thing each of these theory agrees on.
Without a proper plan whereby employees are included in your decision-making, organizational change is likely to fail.
You need the support of your team members, otherwise adopting a new system will be impossible. They are going to reject whatever you introduce (such as CRM software), preferring to continue with what they are comfortable with.
Before you get overeager and begin plotting a structural overhaul… speak to your employees.
Manage organizational change with Userlane
The best examples of organizational change all funneled resources into supporting their staff.
If they hadn’t communicated with the people at all levels of the organization (including their customers) they wouldn’t be the successful firms they are today.
Are you ready to join their ranks?
Userlane is constantly innovating how companies can unlock the future of their growth. Our change management software solutions provide real-time advice to your staff members as they learn a new software system. No more troubleshooting.