COMMON TYPES OF ORGANIZATIONAL CHANGE & HOW TO

MANAGE THEM

20 MAR 2020

HBS Online Staff

Management, Management Essentials

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Organizational change is the action a business takes to change any of its underlying components, such
as processes, culture, people, product, infrastructure, or technology. When an organizational change
initiative is decided on and announced, the responsibility to implement it is generally placed on
managers.

While implementing a change initiative can be challenging, especially for those who have never led such
an effort, it provides managers the opportunity to demonstrate their abilities. It also offers a path for
companies to become and remain competitive in a rapidly evolving global economy where evolution is
essential for success.

As one study by Gartner demonstrates, just 34 percent of all change initiatives pursued by businesses
end in clear success, and a further 16 percent yield mixed results. This equates to 50 percent of all
change initiatives failing.

Why do change initiatives fail? There are several reasons, including:

Poor employee buy-in

A lack of clear vision
Inadequate understanding among managers

When a professional who has never managed a change initiative is suddenly thrust into the challenge,
the results can be catastrophic if they don’t take the time to shore up their skills.
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Here’s an overview of the different types of organizational change every manager needs to understand to
be effective and lead their teams to success.
Adaptive Change

Adaptive changes are small, incremental adjustments that organizations and managers make to adapt to
daily, weekly, and monthly business challenges. These changes are often related to fine-tuning existing
processes, products, and company culture, and don’t fundamentally change the organization as a whole,
as is typically the case with transformational changes.

Some examples of adaptive changes include:

Adding a new payment option for customers who complete an order online
Implementing a new intake form for clients or vendors
Adding a new page to an existing website
Iterating upon an existing product to address customer complaints or better serve customer needs
Testing a new product to address changing customer demands, without retiring existing products or
otherwise changing the existing brand structure
Upgrading software or equipment from one version to another, without seeing significant changes in
functionality
Hiring a new employee to fill a position that’s opened due to the departure of someone else

To effectively manage adaptive changes, managers need to drive and control the process of change.

First, they need to see the big picture and understand why small adaptations are necessary for the
organization's long-term success. Then, they need to convince their employees and key stakeholders that
what may seem like a small change will benefit the organization as a whole, to gain the buy-in necessary
for success. Finally, managers need to be methodical in the way they plan, implement, and review the
steps of adaptive change to ensure the change was effective, sustainable, and valuable. If it wasn’t, they
need to adjust accordingly.

Transformational Change

Transformational change, on the other end of the spectrum, refers to changes that are typically much
grander in scope than incremental, adaptive changes. Very often, transformational change refers to a
dramatic evolution of some basic structure of the business itself—its strategy, culture, organization,
physical structure, supply chain, or processes.

Whereas adaptive change happens incrementally over time, transformational change is often sudden and
dramatic. Though not always the case, transformational change is often pursued to address a major
concern or challenge the business is facing.

Some examples of transformational change include:

Converting an existing brick-and-mortar business into an e-commerce or omnichannel business

Rethinking the client or vendor onboarding process
Redesigning a company’s website and rebuilding it from scratch
Retiring an existing product to divert funds and resources to the development of a new product
Converting from one major software to another in order to embrace new capabilities
The vast majority of change is unlikely to fall into the transformational or adaptive buckets. The key
value of thinking about organizational change as a spectrum is it allows you to think about everything
that falls in between transformational and adaptive change.

For example: As a business grows, it's likely to experience some changes that are predictable and
incremental, as well as transformative. An example is the transition from informal to formal
management, which every startup must undertake on its way to becoming a mature business. While the
company’s strategy might not change, a lot of effort will be required to manage the transition effectively.

Managers must then balance being both methodical and visionary. While the transition isn’t as drastic as
a transformational change, employees may still be wary of such a shift in strategy or standard operating
procedures. After motivating employees to align with the new direction, changes need to be implemented
in a measurable and adjustable process.

Related: How Management Training Programs Can Help You Advance

HOW TO BUILD THE SKILLS TO MANAGE ORGANIZATIONAL CHANGE

To effectively manage organizational change, managers need several skills. While experience and on-the-
job training can be powerful teachers, they’re often not enough—particularly for individuals who find
themselves suddenly thrust into a managerial role with such a difficult task ahead of them.

One effective way to quickly learn the skills necessary for success is to invest in a management training
course. Doing so can help you learn the basics of organizational change management and equip you to
lead such an undertaking.

If you decide that a management training program is the right choice for you, look for one that:

Complements your strengths and bolsters your weaknesses

Employs faculty members and instructors with management experience
Offers flexible learning options, such as online classes, to fit your busy schedule
Has a focus on, or at least includes modules for, organizational change

With the right knowledge, skills, and experience, you can be capable of managing organizational change
of any type.

Do you want to learn how to manage and lead change at your organization more effectively? Explore our
eight-week online course Management Essentials, and discover how you can design, direct, and shape
organizational processes to your advantage.