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Change Management

What Is Transformational Change? Examples, Types

Published: July 10, 2024
Updated: October 2, 2024

Change management has become critical due to the constant nature of organizational change caused by enterprise trends like technological advancement, globalization, skill shortages, and changes in customer preferences.

Despite its importance in achieving business outcomes, implementing transformational change is often extremely challenging, with 70% of all change initiatives failing.

Organizations looking to embrace transformational change often require technical assistance, new internal knowledge on using new systems, change expertise to guide their teams and customers through the change effectively, and providing performance support to enable end-users to use new systems or structures continuously

Another common challenge organizations looking to implement transformational change face is the internal resistance to change from employees when adopting new technology, culture, or team structures. This resistance can be caused by a lack of technical skills, poor leadership, and an unclear vision for the change.

This article explores transformational change, its impact, how organizations can overcome barriers to change, types of transformational change, and examples of businesses that have successfully navigated larger transformational projects.

What Is Transformational Change?

Transformational change occurs when an organization significantly changes its operations, culture, or structure. It typically requires a detailed strategy that outlines the timeline of the transformation project, the roles and responsibilities of all parties involved, the key areas in the organization requiring change, and how the change will drive business outcomes.

When properly executed, transformational change leads to substantial benefits tied to core business outcomes, like revenue growth, employee productivity, customer experience, and operational efficiency.

Transformational change can occur at two main levels: organizational transformation and team-based transformation.

Organizational Transformation

Organizational transformation refers to change that shifts the entire organization’s operational model. Common triggers of this form of organizational change include external factors such as market trends, technological advancements, or changes in consumer behavior.

Examples of organizational transformation include:

Merging with or acquiring another company.
Switching from an on-premises IT infrastructure to cloud-based solutions.
Implementing a new technology that’s mission-critical to your organization’s operations (think CRM, HCM, or ERP systems). This can be driven by a transition from manual processes, condensing multiple tools into one organizational-wide platform, or simply because a new system offers more flexibility and benefits.
Converting revenue models, like moving from a one-time payment to a subscription-based service model.
Adopting agile practices across various organizational departments to boost speed, flexibility, and responsiveness to market trends.
Moving to a WFH or hybrid work model at a company-wide level.

Team Transformation

Team-level transformational change is restricted to certain departments within the organization rather than the entire organization. This level of change typically prioritizes team interaction and collaboration, redefining team roles and leadership structures and establishing clear change goals and performance metrics for the team.

Examples of transformational change at the team level include:

Reassigning new job roles to certain team members within the organization.
Introducing a new team director or leader.
Moving a team under a new business unit.
Implementing a cross-functional pod-like structure for teams that promotes collaboration and innovation.
Implementing a new team-specific tool like a project management or analytics tool.

Percentage of change incentives that fail

70%

Transformational Change vs. Incremental Change

While transformational change involves a radical shift in company structure, culture, or processes to align with a long-term vision, incremental change is gradual and occurs in progressive batches.

Incremental change is often implemented to address time-sensitive challenges and requires relatively lower levels of resource investment. As a result, successfully implementing this type of change depends on the organization’s ability to balance system capacity with resource demand efficiently.

Related Resources

10 Proven Change Management Models in 2024

Lewin’s 3-Stage Model of Change Theory: Overview

The McKinsey 7-S Model Framework, Explained (2024)

Examples of Transformational Change

Seeing real-world examples of transformational change can provide insights into how to lead your organization through times of change. Here are a few examples of transformational change large organizations undertake:

1. Digital transformation

Digital transformation is the implementation of new, emerging digital technologies that transform manual, outdated organizational processes and provide better, more efficient processes. Digital transformation is an example of transformational change at its most significant, which often disrupts how an organization functions at its core.

Digital transformation impacts an organization’s business model and culture, requiring team members to embrace change, get comfortable with failure, and hold themselves accountable to long-term organizational goals.

The COVID-19 pandemic led to a significant awakening about the importance of digital transformation. 77% of organizations have invested in digital transformation initiatives, indicating its continual rise. Despite its prevalence, many businesses need more expertise and skills to implement and accelerate it successfully, particularly due to a need for more expertise and skills.

Businesses can effectively navigate this challenge by setting up digital initiatives that streamline digitization.

How Ferring Drove Adoption of It Digital Contracting Transformation Initiative With Whatfix

Ferring Pharmaceuticals is a Swiss biopharmaceutical multinational company that specializes in reproductive medicine, maternal health, gastroenterology, and urology. It undertook a large transformation initiative to digitalize its contract management processes using a new CLM platform, Icertis, to create, execute, and manage contracts.

Post-implementation, Ferring realized it relied on resource-intensive, traditional in-person training and support to upskill employees in using Icertis, which stunted its adoption and caused the transformation project to fail to meet its expected goals.

Ferring began exploring digital adoption platforms (DAP) and soon partnered with Whatfix DAP. With Whatfix, Ferring created in-app guidance and live tutorials that overlaid its employees’ Icertis UI and enabled them to learn in the flow of work. This led to a significantly improved user experience and efficient contract executions, providing Ferring’s users with more leeway to focus on core business operations and freeing up more time for the legal operations team to drive legal services innovation.

Ferring’s contract management transformation resulted in a 33% cutback in support tickets within a single quarter and an average user success rate of 97% when utilizing self-service tools.

“When they showed Whatfix to me, I approached our CLM change committee and said that we cannot successfully implement our new CLM without Whatfix.”

Sheila Dusseau, Head of Global Legal Operations at Ferring

→ Read the full Ferring + Whatfix case study now!

2. Implementing a new technology

Transformational change can occur when an organization adopts a new technology or during a mission-critical software implementation project. Organizations must look beyond system implementation to properly enable their employees with holistic training programs and in-app guidance to facilitate a smooth transition, reduce time-to-proficiency, drive adoption, and provide on-going performance support.

This delicate process requires a thorough assessment of the skill level of end-users and adequate planning. However, with proper end-user onboarding, training, and support, employees can reach new levels of efficiency and productivity, maximizing digital transformation ROI.

How Manpower Accelerated Its ATS Transformation With Whatfix

ManpowerGroup is a leading global workforce solutions company that helps companies source, recruit, and onboard new talent, while also nurturing and connecting individuals to organizations that require their skills.

Manpower invested in a new cloud applicant tracking system (ATS), Bullhorn ATS. Post-implementation, the company struggled to effectively enable its recruiters to correctly use Bullhorn due to outdated, traditional training methods and overall resistance to change from its recruiters.

The company attempted to create an online portal featuring links to relevant ATS-related content, help documents, and training plans. However, it had low usage rates, as recruiters preferred seeking guidance from their colleagues rather than clicking on links that would disrupt the flow of learning.

By partnering with Whatfix, ManpowerGroup enabled its recruiters to learn by doing with in-app guidance, self-help training resources, and on-demand support. ATS in-app tutorials created with Whatfix significantly improved its training usage and effectiveness and accelerated the adoption of Bullhorn. 92% of recruiters who used Whatfix’s self-help feature to solve their questions about Bullhorn were able to resolve their issues by themselves, significantly reducing the need for a help desk.

“The in-system training is a game changer. Whatfix really helped us move the needle toward using more current and innovative training solutions. We strongly value innovation as an organization and that includes innovating the way we learn.”

Jill Busch, Director of Learning and Development at Manpower

→ Read the full Manpower + Whatfix case study now!

3. Evolving with new product lines

Rolling out new products or enhancing certain features can significantly improve an organization’s customer experience and meet changing market demands. This form of strategic transformation change includes examples like:

Netflix launched its online streaming service while ending its physical kiosks and ‘movies-in-the-mail’ service.
Apple launched the iPhone and iPad to its existing line of home computer products.
Walmart launched its online e-commerce store to expand from its traditional brick-and-mortar retail offerings.
Adobe moving from individual, desktop apps that require a one-time payment to a multi-product cloud offering using a subscription service.

However, such change typically requires a considerable learning curve for customers, especially when new product lines are driven by new technology yet to be adopted by the masses.

4. Outsourcing a department like HR or IT

Outsourcing has evolved from a cost-savings initiative to providing more technological, omnichannel offerings to enhance employee and customer experience. By outsourcing departments like support, HR, and IT, organizations can enable their employees and customers with better experiences and keep employees focused on more business-focused goals and projects.

This has allowed organizations to tap into larger talent pools and outsourcing for repetitive tasks, freeing up time and resources for core business operations. The global business processing outsourcing market is worth nearly $250 billion and is forecast to reach $544.8 billion by 2032.

5. Mergers and acquisitions

Mergers and acquisitions are a drastic form of transformational change and often encompass one or more other forms consolidating into one entity. As a result, they require a more detailed strategy and adequate planning. To optimize your merger or acquisition, consider the following steps:

Ensure you’re compatible with each organization’s culture, structure, and technology stack.
Be honest and transparent with all organizations.
Do your due diligence.
Work with the other organization to set up a clear and feasible integration plan.
Work with the other organization to set clear change project milestones.
Mobilize a change team of individuals from both organizations and assign them a leader to keep them accountable and aligned with long-term objectives.
Deploy adequate digital adoption tools and techniques for aspects of the merger or acquisition that require digitization.

Transformational Change Best Practices

What can you do to drive transformational change for your organization effectively? While every transformational change project presents contextual challenges and opportunities, there are common best practices that drive change adoption and achieve transformational outcomes.

1. Build a change team with cross-functional leaders

Every change project requires a cross-functional team dedicated to understanding each initiative’s current challenges, opportunities, and pain points and driving change success by evangelizing the new way of doing things.

Set up a team of change agents from each of the core departments within your organization who will work together to ensure alignment with the overall business objective. Then, appoint a cross-functional leader to oversee this team. Cross-functional leadership refers to the management of individuals from various teams within an organization, possessing different skill sets, and functions

Cross-functional leadership is no longer an option for modern teams gearing towards transformational change; it is an imperative. According to an MIT Sloan survey, 70% of businesses successfully adopting new technology implement cross-functional collaboration.

Cross-functional teams foster the free flow of ideas across the organization, encouraging innovation and promoting initiatives that lead to end-user satisfaction. Include team members from departments most impacted by transformational change projects to make sure you’re including those with the most knowledge of the current landscape and the impacts new implementations may have.

2. Build a vision and tie change projects to current needs and business outcomes

Get clear on your vision and ensure it aligns with your desired business outcome. To do this correctly, evaluate your existing infrastructure to identify its shortcomings. Then, determine how your transformational change project can address these problems and create a vision that aligns with this business objective.

3. Communicate the change and be transparent to those most impacted

Carry your team and customers along with your goals and desired outcomes for the transformational change and the impact it would have on them.

Establish strong lines of change communication to keep them consistently updated on new developments. This will help align them with your vision and give them a clear perspective of their role in the change.

Build a multi-channel change announcement plan to keep awareness of the change high, highlight key wins and early adopters, and keep everyone the the same page. This can include email, company videos, Slack messages, callouts in department meetings, and more.

4. Provide end-user training and support to ease the transition

Whether implementing new technology or launching new products, transformational change can be intimidating and challenging for the end-user.

To ease the transition, use digital adoption platforms (DAP) and enablement techniques incorporating holistic end-user training and performance support to guide end users. DAPs provide post-implementation support that enables users to maximize productivity, master software, and drive full technology ROI.

With a digital adoption platform like Whatfix DAP, organizations can enable employees and customers through times of transition, reduce time-to-proficiency, and drive overall user adoption. With Whatfix DAP, organizational change teams can:

Utilize a no-code editor to create in-app guidance and live tutorials.
Provide guided user onboarding experiences like Tours and Task Lists.
Enable users to learn by doing with contextual Flows to learn complex process and drive advanced feature adoption.
Support users at the moment of need with Self Help. Integrate Self Help with your process docs, training materials, LMS, knowledge base, and more – allowing users to search for any technical issue via an in-app support center.
Translation capabilities to meet the demands of a multilingual, global user base.
Understand in-app content engagement and usage with Guidance Analytics.
Collect user feedback with in-app Surveys.

Additionally, IT teams should create replica sandbox environments of new, mission-critical applications to allow them to conduct user acceptance testing and provide hands-on user training. With IT sandbox environments, end-users can utilize interactive applications to learn by doing, without the risks of real software usage.

With Whatfix Mirror, IT team can quickly create replica sandbox environments of any web-based application without additional technical expertise. Overlay in-app guided experiences on your replica environments to provide hands-on learning experiences for users and understand user engagement by auto-capturing IT training analytics and behavioral data.

5. Monitor adoption and end-user behavior (and be agile)

Getting valuable real-time insights into end-user behavior during the transformational change process can help you to respond to their needs effectively.

With Whatfix DAP, use Guidance Analytics to track, analyze, and understand how users consume and engage with your in-app content and new user flows. With Guidance Analytics, track IT user onboarding metrics to answer questions like:

How many employee end-users engaged with our product tour?
What type of users are more likely to finish the new user Task List?
Which feature walkthroughs (Flows) have the highest completion rate?
What user queries are most common in Self Help searches?
Where are users dropping off in my user onboarding flows?
What’s my overall onboarding completion rate?

Use these metrics to help you take an iterative approach and improve your onboarding by testing and experimenting with new in-app elements and experience variations.

While Guidance Analytics provides insights into how end-users engage with and interact with your Whatfix-created in-app content, you may also need a solution to track custom user actions and events.

With Whatfix Product Analytics, easily implement no-code event tracking, allowing IT teams and application owners to track any custom event or action. Understand key elements of the user experience, like pinpointing your user’s “aha!” moments. Map the user journey and identify where users experience friction that causes a leaky user onboarding funnel. All this, without requiring technical support or coding.

By tracking these events with Whatfix Product Analytics, you can devise onboarding iterations that nudge users toward their “aha!” moment faster, build frictionless user onboarding journeys for your different user types, drive optimal conversions by attacking leaky areas of your funnel, and keep users moving beyond phase one of user onboarding to create power users.