OCD – Unit 2

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 are all considered different forms of organizational change. It’s a broad
category.

Before you can design your change management strategy, it is important to

determine the type of organizational change. This helps 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 effective training 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.

6 Types of Organizational Change

Different types of organizational change require different strategies. Everything from
implementation to communication must be tailored to the type of change to be
made.

Here are the six most common types of organizational change, along with change
management examples for each:
1. Strategic change
Organizations implement strategic changes to their business to achieve goals, boost
competitive advantage in the market, or respond to market opportunities or threats.
A strategic change includes making changes to the business’s policies, structure, or
processes. The upper management and the Chief Executive Officer often bear the
responsibility for strategic change.

Here are three examples of strategic change in an organization:

 Updating your mission as you grow

When companies first launch, the initial focus is often on lead generation and client
acquisition. However, once the company has an established customer base, the focus
could shift to upselling. When the main mission changes, the company’s mission also
needs to evolve.

 Innovation

Strategic change through digital innovation refers to using skills and resources to
develop new ideas or improve existing offerings in order to meet customers’ new
and changing demands. Focusing on innovation often requires investing heavily in
research and development activities and the latest technology.
  Restructuring

Restructuring leads organizations to reorganizing aspects of their company to survive

a massive blow or to maximize their already profitable business. Restructuring can
result in downsizing or upsizing the workforce. For example, during COVID-19, the
tourism and hospitality sectors were the two of the worst-hit industries in terms of
employee lay-offs and losses.

2. People-centric organizational change

While all changes affect people, people-centric types of organizational change
include instituting new parental leave policies or bringing in new hires. When
implementing a people-centric change, the leadership must bear in mind that
employees will naturally resist change.

A people‐centric change requires transparency, communication, effective leadership,

and an empathetic approach.

Note: 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 three examples of strategic change in an organization:

 New hire onboarding

Bringing on new team members requires effective onboarding and training, which
affect both the new hires and the established employees. You need to start with
communicating the reason for hiring new people to the team.

Are they going to lighten the workload? Will they fill in the skills gaps? How will they
integrate with the current team?

Be ready to answer the above 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.

 Changes to roles and responsibilities

Job descriptions can evolve over time. Changes to an employee’s responsibilities may
require additional training or upskilling 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, the employee will be more likely
to receive the news well if they understand the reason behind it.

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?

 Layoffs

If your company undergoes mass hiring or layoffs, forcing you to change your
internal operations and processes, the situation has to be dealt with by keeping in
mind its impact on both the laid-off and the remaining employees’ morale.

Give your laid-off employees enough time to rehabilitate and move out of the
company without any financial or emotional turbulence.

On the other hand, the threat of layoffs might evoke fear and anxiety among your
remaining staff members, thereby affecting their morale and productivity. Therefore,
the leadership needs to be transparent with these employees, communicate the
reasons behind such drastic changes, and answer any questions the employees might
have regarding the change.

3. Structural change
Structural changes are changes made to the organization’s structure that might stem
from internal or external factors and typically affect how the company is run.
Structural changes include major shifts in the management hierarchy, team
organization, the responsibilities attributed to different departments, the chain of
command, job structure, and administrative procedures.

Circumstances that lead to structural change include mergers and acquisitions, job
duplication, changes in the market, and process or policy changes. These changes
often overlap with people-centric changes as they directly affect most, if not all,
employees.

Here are three examples of strategic change in an organization:

 Mergers and acquisitions

Mergers and acquisitions are the most common cause of structural change. For
example, let’s say a company X decided to merge with a company Y. As a part of that
merger, duplicate departments are eliminated, employees from both companies are
reassigned to new positions, some employees are terminated, new policies and
procedures are created, and job functions are realigned to fit the new company
structure.

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,
and refreeze.

After you unfreeze the current processes, you move on to change. This step should
be gradual. This is when the 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 a group of employees have a knack for analytics, you might
decide to create a separate team dedicated to reporting.

However, the necessary shifting of personnel and duties could create some tension.
To streamline the process, justify the change with clear reasoning, explain the
benefits, and 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. Technological change
The increasing market competition and constantly evolving technology lead to
technological change within organizations. Technology change often involves
introducing new software or system to improve business processes. However,
technology project goals are often improperly defined and poorly communicated,
which scares and frustrates your employees and ultimately leads to resistance.

Technology change management is all about identifying new technology and

implementing a digital strategy for improved productivity and profitability.

Here are two examples of technological change:

 Digital transformation

Digital transformation is defined as the integration of digital technology across all

business domains, resulting in fundamental changes to how a business operates and
delivers value to its customers. While technology is the cornerstone of digital
transformation, there is a human component of change management that evolves
along with your technology. This is why change management must be the center of
your digital transformation vision.

Manage change with empathy and help your employees understand how it can
improve their work life. Also, it is important to allow your employees appropriate
timelines to adapt to not only the new technologies but also the new agile,
customer-centric, design-thinking mindset.
A DAP helps you provide in-app guidance on different enterprise applications
through a variety of formats, such as step-by-step walk-throughs, balloon tips,
videos, and written guides. It also tracks the progress of your change initiative and
gather feedback from your team.

 Introduction of a 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 introducing new technology, you must have a solid transition plan. People
want to know why the technology is necessary, what makes it better than previous
solutions, and how you will 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 one place.

You can build confidence in the change by explaining that the transition will be
supported by various change management tools that offer capabilities such as in-
app training, weekly check-ins, and an internal chat for handling questions.

5. Unplanned change
Unplanned change is defined as a necessary action following unexpected events. An
unplanned change cannot be predicted but can be dealt with by effective change
management.

Here are two examples of unplanned change:

 Shift to remote work

Situations such as the unexpected mass shift of employees to remote work due to
the outbreak of virus requires efficient organizational change management skills.
Draft a well-defined change management strategy that specifies the aim, goal,
purpose, and direction you want the change to follow. The strategy defines the
features and characteristics of the change, the timeframe, risks, limitations, and
potential employee resistance.

Some essential strategies that companies can use to manage remote employees
during change include:
 o Communicating more frequently and thoroughly to avoid
misunderstandings and assumptions.
o Having the tools and processes in place to boost virtual employee
engagement.
o Prioritizing learning and development to continuously upskill
employees on the latest technology via employee training software.
o Using change managers to help individual employees adapt to the
remote culture.
o Providing flexible working schedules for remote employees to maintain
a healthy work-life balance.

 Loss of critical personnel

An unplanned change can also take place if another company or a competitor wooes
away one of your most valued team members with an exciting promotion, or higher
salary. In the event of employee turnover in critical roles, succession planning is the
most effective way to minimize the effect of such change.

A succession plan identifies critical positions, future staffing needs, documenting and
transferring key knowledge, and the people that could fill these future roles within an
organization – and helps develop action plans accordingly.

6. 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 with just one question – was
the problem solved or not?

Here are two examples of remedial change:

 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 (What’s in it for me) and WDIMTM (What does it mean
to me). 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 or knowledge base 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.

5 ways to ensure successful organizational change

Now that you have identified the type of organizational change, here are a few tips
to ensure successful organizational change.

1. Clear vision and goals

It’s essential to understand the reasons for the change, how it will impact the
business outcomes, and when it will be considered successful.

Formulating and sharing a comprehensible purpose, vision, and goals helps

employees and leaders understand the “why” of the change and is critical for the
overall success of a change’s implementation.

2. Prioritization
It’s impossible to change everything at once, so it is critical to prioritize the matters
you want to tackle first. For example, implementing three new enterprise applications
one after another, not all at once.

3. Secure buy-in from your entire organization

It is essential to include all key stakeholders, from leadership and management to
executives, to minimize an organization’s resistance to change. This helps employees
feel heard, included, and valued – allowing for any conflicts to be aired early in an
implementation project and quickly resolved.

Develop a written communication plan to inform all stakeholders about the change.
The plan must address all concerns, including what the new business will look like.
The communication must be two-way that provide employees with opportunities to
ask questions and share their concerns.

4. Build a change implementation plan

A successful change implementation requires a detailed plan to highlight critical
milestones systematically. For an effortless rollout, you must plan all of these aspects
– project scope, integrations, resources, communication, time, cost, procurement,
and risks. A practical implementation plan accelerates the pace of change
implementation by anticipating and overcoming barriers and resistance to change.

5. Focus on training & support

On-demand training and support are vital for reinforcing change. You can implement
different change management tools that provide training, create knowledge bases,
track progress, etc.

For instance, implement a digital adoption platform to help users effortlessly switch
from one tool to another. DAPs enable employee training on any new software or
enterprise application via contextual in-app walkthroughs, balloon tips, videos,
written guides, and embedded knowledge bases.

Continuous and Incremental Change

Continuous and incremental change are two types of organizational change that can
occur in a business setting.

Continuous change refers to a gradual and ongoing process of improvement and

innovation that happens over time. It involves making small and continuous
adjustments to existing processes, procedures, or products in order to optimize
performance, increase efficiency, and remain competitive in the market. Continuous
change is often a proactive approach to change and is driven by a desire to stay
ahead of the curve.

Incremental change, on the other hand, refers to small, specific changes that are
made to an organization's existing processes or products in order to address a
particular issue or problem. Incremental change is often reactive in nature and is
triggered by an immediate need to solve a problem or improve a specific aspect of
the business.

Both continuous and incremental change can be beneficial for an organization.

Continuous change can lead to long-term improvements in performance and a
competitive advantage, while incremental change can help solve specific problems
and improve efficiency in the short-term. The choice between continuous or
incremental change often depends on the specific needs and goals of the
organization at any given time.

Organizational Change

Organizational change is the process by which organizations move from their current
or present state to some desired future state to increase their effectiveness. The goal
of planned organizational change is to find new or improved ways of using resources
and capabilities to increase an organization’s ability to create value and improve
returns to its stakeholders.1 An organization in decline may need to restructure its
competences and resources to improve its fit with a changing environment. IBM, for
example, experienced falling demand for its principal product, mainframe computers,
in the 1990s. Its new CEO decided to refocus and build IBM’s competences in
providing IT consulting and services and in the 2000s IBM enjoyed a successful
turnaround that by 2010 had made it a dominant competitor once again. Similarly, in
the 2010s Ford has enjoyed a rebirth under CEO Alan Mulally, who totally changed
the way the company operates by altering its structure and culture to meet the needs
of a changing environment.
Discontinuous and radical change refers to a significant, transformative shift in an
organization's strategy, structure, culture, or processes. It involves a complete
departure from the existing way of doing things and requires a fundamental
rethinking of the business model.

Radical change often involves the adoption of new technologies, entering into new
markets, or a major restructuring of the organization. It can also involve a change in
the organization's core values, mission, or purpose.

Discontinuous change is often driven by external factors such as changes in the

market, industry disruptions, or shifts in customer needs and expectations.
Organizations that fail to adapt to these changes risk becoming obsolete or losing
their competitive edge.

Implementing discontinuous change can be challenging as it requires a significant

investment of time, resources, and energy. It may also involve resistance from
stakeholders who are comfortable with the existing way of doing things.

However, radical change can also present opportunities for growth and innovation.
Organizations that successfully implement discontinuous change can gain a
competitive advantage and position themselves for long-term success.

Participative change and directive change are two approaches to organizational

change that differ in terms of the degree of involvement of employees in the change
process.

Participative change involves engaging employees in the change process and

encouraging their active participation in decision-making. This approach recognizes
the expertise and knowledge of employees and seeks to involve them in identifying
problems, generating ideas, and implementing solutions. Participative change can
lead to increased buy-in and commitment from employees, and may result in more
sustainable change as a result.

Directive change, on the other hand, is a top-down approach that is driven by

senior management or external consultants. This approach is characterized by a clear
direction and a focus on achieving specific goals or outcomes. The role of employees
in this approach is typically more limited, as they are expected to follow instructions
and implement changes dictated by management.

The choice between participative and directive change depends on a variety of

factors, such as the urgency and complexity of the change, the level of resistance
from employees, and the organizational culture. Participative change may be more
appropriate in situations where employee engagement and ownership of the change
process are critical to success, while directive change may be more appropriate in
situations where time is of the essence, or where significant resistance to change is
expected.

It's important to note that neither approach is inherently better than the other. The
key to successful change is to choose the approach that is most appropriate for the
specific situation and to effectively communicate the change process to all
stakeholders.

Levels of change refer to the different scopes or domains in which change can occur
within an organization. There are typically three levels of change:

1. Individual level: This level of change focuses on changing the behavior,

attitudes, and skills of individuals within the organization. Examples of
individual-level change may include training programs, coaching, or
counselling to help employees improve their performance, or leadership
development programs to help managers enhance their skills.

2. Group or team level: This level of change focuses on improving the

performance and effectiveness of groups or teams within the organization.
Examples of group-level change may include team-building exercises,
improving communication within teams, or implementing performance
management systems to encourage collaboration and accountability.

3. Organizational level: This level of change focuses on changing the systems,

processes, culture, and structure of the organization as a whole. Examples of
organizational-level change may include restructuring the organization to
increase efficiency, changing the company culture to foster innovation, or
implementing new technology to improve productivity.

4. It's important to note that change at each level is interconnected, and change
at one level can have a ripple effect on other levels. For example, improving
the skills and attitudes of individuals can lead to better teamwork and
collaboration, which can in turn lead to organizational-level changes.

5. Effective change management requires a holistic approach that takes into

account the different levels of change, as well as the specific needs and
challenges of the organization. By understanding the levels of change, leaders
can develop targeted strategies and interventions to create sustainable and
positive change within their organizations.
Knowledge changes refer to the ongoing process of acquiring, creating, sharing,
and utilizing knowledge within an organization. These changes can occur at different
levels, including individual, group, and organizational levels, and can have a
significant impact on the organization's performance and competitive advantage.
Examples of knowledge changes may include:

1. Learning and development programs: These programs aim to enhance the

skills and knowledge of employees to improve their performance and
productivity.
2. Knowledge management systems: These systems help organizations to
capture, store, and share knowledge within the organization, making it more
accessible and easily transferable.
3. Innovation initiatives: These initiatives focus on generating new knowledge
and ideas within the organization to improve products, services, or processes
and gain a competitive advantage.
4. Collaboration and communication: Effective collaboration and communication
practices can help to share knowledge and ideas across teams and
departments, enabling better decision-making and problem-solving.
5. Organizational culture: The culture of an organization can either encourage or
discourage the sharing of knowledge and ideas. Creating a culture of
openness and transparency can lead to increased innovation and knowledge
sharing.

Effective knowledge changes require a continuous learning and improvement

mindset, a culture that encourages experimentation and risk-taking, and the use of
technology to facilitate knowledge sharing and collaboration. By embracing
knowledge changes, organizations can improve their performance, increase their
competitiveness, and achieve their strategic goals.

Attitudinal changes refer to shifts in an individual's beliefs, values, and attitudes.

These changes can occur as a result of personal experiences, exposure to new ideas
or perspectives, or through interventions such as training, coaching, or counselling.

Attitudinal changes can be particularly important in the context of organizational

change. For example, if an organization is implementing a new strategy or process, it
may require employees to change their attitudes towards the change in order to be
successful. Attitudinal changes can also be important for improving employee
engagement, motivation, and job satisfaction.
Examples of attitudinal changes may include:

1. Changing attitudes towards diversity and inclusion: Encouraging employees to

recognize and appreciate differences among individuals and embrace diversity
can lead to a more inclusive and respectful work environment.
2. Changing attitudes towards learning and development: Encouraging
employees to embrace a growth mindset and view learning and development
as a continuous process can lead to improved performance and productivity.
3. Changing attitudes towards change: Helping employees to view change as an
opportunity for growth and development, rather than as a threat, can lead to
increased resilience and adaptability.
4. Changing attitudes towards work-life balance: Encouraging employees to
prioritize their well-being and recognize the importance of work-life balance
can lead to increased job satisfaction and reduced turnover.

Attitudinal changes can be challenging to achieve, as they often require individuals

to challenge deeply ingrained beliefs and values. However, by providing the
necessary support, training, and resources, organizations can facilitate attitudinal
changes that lead to a more positive and productive work environment.

Individual behavior changes can have a significant impact on organizational

performance changes. When employees change their behavior in positive ways, it
can lead to improved performance and productivity, increased employee
engagement, and a more positive work environment. Here are some examples of
how individual behavior changes can lead to organizational performance changes:

1. Increased motivation: When employees are motivated to do their best work,

they are more likely to be productive and perform at a high level. Changes in
individual behavior, such as setting personal goals, seeking feedback, and
taking ownership of their work, can lead to increased motivation and drive.
2. Improved communication: Effective communication is essential for
successful collaboration and teamwork. When employees improve their
communication skills, they can better express their ideas and opinions, resolve
conflicts, and work together towards common goals.
3. Better time management: Effective time management is critical for meeting
deadlines and achieving goals. When employees improve their time
management skills, they can prioritize their tasks, avoid distractions, and work
more efficiently.
4. Increased innovation: When employees are encouraged to think creatively
and take risks, they are more likely to come up with new ideas and solutions.
Changes in individual behavior, such as encouraging experimentation and
 brainstorming, can lead to increased innovation and a more dynamic work
environment.

Organizational performance changes refer to improvements or declines in the

overall effectiveness, efficiency, and productivity of an organization. These changes
can be driven by a variety of factors, including changes in strategy, changes in
leadership, changes in processes and systems, changes in the external environment,
and changes in employee behavior and attitudes.

Organizational performance changes can be measured in a variety of ways,

depending on the goals and objectives of the organization. Some common measures
of organizational performance include:

1. Financial performance: This includes measures such as revenue, profitability,

return on investment (ROI), and market share.
2. Customer satisfaction: This includes measures of customer loyalty,
satisfaction, and retention.
3. Employee engagement: This includes measures of employee satisfaction,
motivation, and commitment to the organization.
4. Productivity: This includes measures of output, efficiency, and quality.
5. Innovation: This includes measures of new product development, patents,
and intellectual property.

Organizational performance changes can be both positive and negative. Positive

changes in organizational performance can lead to increased revenue, profitability,
and customer satisfaction, as well as improved employee engagement and
productivity. Negative changes in organizational performance, on the other hand,
can lead to decreased revenue, profitability, and customer satisfaction, as well as
increased employee turnover and lower productivity.

Organizations can drive positive performance changes by setting clear goals and
objectives, creating a culture of innovation and continuous improvement, investing in
employee training and development, and regularly monitoring and measuring
performance. By focusing on improving organizational performance, organizations
can become more competitive, agile, and responsive to changes in the external
environment.