4 Types of Organizational Change, Explained
Recognizing the need for change and knowing how to make that change successful are two very different skills. Change management strategy is key—but, where to begin? It all starts with understanding what types of organizational change you’re making.
What is Organizational Change?
Organizational changes are those that have a significant impact on the organization as a whole. Major shifts to personnel, company goals, service offerings, and operations would all be considered forms of organizational change. It’s a broad category.
Before you can design your change management game plan, determine the type of organizational change you’ll be making. Once you figure that out, you can execute the right change management plan for the best possible results. Knowing the type of organizational change will also help you choose the right change management tools.
Why is Organizational Change Management Important?
Organizational change is a business necessity. Employees leave, and new employees are hired, new teams and departments are created as the company grows, and businesses adopt new technology to stay ahead of the curve.
The key to successful, productive organizational change is the way you manage it. It’s vital to keep employees in the loop and ensure that they understand what the changes are and how employees will be affected.
With effective organizational change management, you can keep the business running smoothly during the transition. For example, offering training options helps employees learn new technology faster. That way, they fully adopt the technology, and the organizational change isn’t bogged down by support tickets and frustrated users.
By identifying the types of organizational change you will be implementing, you can make a plan for keeping employees informed. You can ask for feedback as you implement the change and then make adjustments to your change management plan so that your team has the support they need to maintain high morale and facilitate the change from their end.
4 Types of Organizational Change
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 change strategic, structural, people-centric, or remedial?
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.
Here are the four most common types of organizational change, along with examples for each one:
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.
Here are 3 examples of strategic transformational change
1. 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.
2. 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.
3. Employee training and development for 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.
Here are 3 examples of people-centric change
1. 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.
2. 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?
3. Employee training and development for new skills
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.
Here are 3 examples of structural change
1. 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.
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.
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.
2. 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.
3. 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 the remedial change is that judging its success is quick and simple.
Was the problem solved or not?
Here are 3 examples of remedial change
1. 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.
2. 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.
3. 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.
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.
Request a demo to see how Whatfix empowers organizations to support change projects by driving user adoption and providing guided walkthroughs.