Do You Know All 5 Types of Organizational Change?
Change is a fact of life.
Think about the seasons. Every year around this time, summer fades into autumn. The temperature drops and the leaves change colors, and they eventually fall from the trees. But not all types of organizational change are so routine or graceful. Change might be as inevitable as the shifting weather — but that doesn’t make it easy.
With organizational change strategies, companies can avoid stagnation while minimizing disruption as much as possible. Preparation is integral for success, especially during a change effort. However, one can’t prepare without knowing what type of change is occurring.
Here is a list of 5 types of organizational change companies may undergo.
1. Organization-Wide Change
Organization-wide change is a large-scale transformation that affects the whole company. This could include restructuring the leadership, adding a new policy, or introducing enterprise technology, for example.
Such a large-scale change will be felt by every single employee. However, as the dust settles, you can begin to see improvements. Sometimes change is required to see how a long-held policy has become outdated or that the company outgrew its shell.
Like a hermit crab, leaders might identify the need to find a bigger shell for a better fit. However, poorly planned change can be highly disruptive and result in broad consequences across the company.
Enterprise-wide change is quite extensive and needs to be planned with precision to protect all of those affected. Whether the results of the change are negative or positive depends on your organizational change strategies and their execution.
2. Transformational Change
Transformational change specifically targets a company’s organizational strategy. Companies that are best suited to withstand rapid change in their industry are nimble, adaptable, and prepared to transform their strategies when the need arises.
Strategies to guide transformational change must account for the current situation and the direction a company plans on taking. Cultural trends, social climate, and technological progress are some of many factors leaders must consider when devising organizational change strategies to support a transformation.
According to a study from MIT Sloan Management Review and Deloitte, maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, into their transformation strategies. Meanwhile, less-mature digital businesses are focused on solving discrete business problems with individual technologies. However, given the rapid pace at which digital technology evolves, companies will be better positioned to succeed if they incorporate scalable and adaptable technology into their transformation strategies.
3. Personnel Change
Personnel change is when a company implements mass hiring or layoffs. Each of these types of organizational change can cause a significant shift in employee morale and engagement, for better or worse.
The threat of layoffs evokes fear and anxiety among staff members. Although certain circumstances necessitate such a decision, leaders should expect that employee morale will suffer. Nevertheless, the company must move forward. It is important to display genuine compassion and motivate employees to continue to work hard through the difficult time.
While mass hiring has better implications for a company, it is not without difficulty. Mass hiring is a sign of major growth, during which a company is susceptible to cultural changes and disorganization.
Hiring new staff means training them, and providing ongoing support. Welcoming an influx of employees is great, but the work is cut out for those in management. If the transition is not handled correctly, it can cause chaos, inefficiency, and ultimately deter further growth.
4. Unplanned Change
Unplanned change is typically defined as necessary action following unexpected events. While unplanned change cannot be predicted — it can be dealt with in an organized manner.
For example, the hurricanes that battered the U.S. early in the fall of 2017 caused thousands of residents to evacuate and seek temporary shelter far away from home. Following the emergency, they began the long process of restoring normalcy to their lives.
Companies also experienced unplanned change in the aftermath of the storms.
New government regulations, over which individual companies have no control, can also spur unplanned change. Although the circumstances that lead to unplanned change may be chaotic, it’s important for organizations to be resilient and adaptable. Companies can also benefit from setting basic organizational change strategies in place to minimize chaos and disruption.
5. Remedial Change
Leaders implement remedial changes when they identify a need to address deficiencies or poor company performance.
For example, financial distress, usually due to poor performance, requires remedial change. The most common examples of such change could be introducing a new employee training program, rolling out a new software, or creating a new role to remedy a pain point.
Other types of corrective action could include reviewing strategies that may have been in place for years but are no longer profitable. Issues stemming from leadership, such as a newly appointed CEO who turns out to be a poor fit for the company, might also call for remedial change. Although remedial change efforts must be tailored to the specific problem on hand, they still require effective organizational change strategies to be successful.
The Solution: Strategize and Prepare
Different types of organizational change necessitate different actions. Companies that fare best amid transitional periods are adaptable and embrace change, even when circumstances are not ideal. Having basic strategies in place also helps guide transformation efforts, including those that are prompted by unplanned events. When it comes to organizational change, preparation is key.