Change is difficult. It’s an adage that’s tossed around for decades and speaks to something many of us know personally. No matter if it’s a self-imposed change like moving homes or trying to form a new habit, or an involuntary change like a new bus schedule or your favorite restaurant closing. Even more challenging is implementing change for a large group. While some of these involve many cut-and-dry logistics, they also often will cause an emotional stir in employees. That’s where organizational change management (OCM) comes in.
What is organizational change management?
Organizational change management is a framework for navigating the effect of new processes, how an organization is structured or other big adjustments and cultural changes in a business.1 In other words, organizational change management is all about the people involved with or affected by a business change.
As a business leader, it might be tempting to announce a new way of doing things with a simple email and move on, but employees won’t likely take it so lightly. Especially if the change requires a new behavior or skill to be adopted, leaders need to have a plan ready for their employees.
What causes organizational change?
Organizational change is a natural part of the business lifecycle. Organizational changes can come from a business thriving and growing, struggling and downsizing, or, irrespective of growth, something could be changed internally to better suit a need. Common organizational changes include:
- Mergers and acquisitions
- New product development
- Product retirement
- An internal or external change of software
- Restructuring of a department or organization
- Adjusting to a hybrid or remote work style
- Adopting a work management system
- Adding a new role to a team
- Editing the mission or vision
- Budget adjustment
All of these events can be categorized into several types of change that business leaders are likely to encounter in their careers.
Types of Organizational Change
1. Strategic Change
While all changes should be approached in a strategic manner, a strategic change is one that will affect the core positioning of a business in a market. Strategic changes might include shifting audiences, creating a new product or service or retiring another, changing the mission of an organization and more. Change management for these types of incidents is often managed by the top executives at a company but requires buy-in at all ranks of management.
2. Operational Change
Operational changes are very common and include personnel changes, mergers and acquisitions, layoffs, and so on. For obvious reasons, these are very often the most emotional types of change employees will encounter and therefore require a lot of implementation consideration.
3. Technological Change
The tools available to an organization in any industry are constantly changing. Whether a marketing department is implementing a new consumer listening platform or the human resources team is introducing a new time off request software, it will require training to get targeted users on board.
4. Unplanned Change
Leaders need to expect the unexpected. While of course they can’t be expected to have an instant response for every possibility, it’s good to be prepared for key likely events. The quick transition to remote work at the beginning of the COVID-19 pandemic is a recent excellent example of when leaders were faced with unplanned change management.
Change management might also be categorized into groups like adaptive change management (small, incremental changes that are usually internal) or transformational change management (for bigger shifts like a change in mission or combination of changes like an organizational restructure and merger that requires a culture shift). Some scholars also differentiate between remedial change which is considered to be in response to a problem versus a general improvement or natural change like people leaving and joining the organization.
Why is organizational change management important?
Change is going to happen whether it’s managed well or not. But the success of change and the emotional fallout can vary depending on how it’s handled. Executive teams and individual managers can also make a big difference in the success or failure of an organizational change so it’s critical to take it on as a project within itself rather than just allowing a change to happen with little oversight or consideration for employees.
A manager's role in organizational change
Business leaders have an important role in change management. They may be involved in planning and strategizing on the transition itself or at a minimum they need to keep their team of reports up-to-speed on all the ways the change will affect their roles and responsibilities. It’s also important that leaders know how biases and perspectives will affect their approach to an organizational shakeup.
Kalin Kolev, MBA, Ph.D., Assistant Professor of Management at Marquette published a study looking at how key structural attributes of the top management team—tenure and gender diversity, size, and pay disparity—affect how top executives collaborate and enact organizational change. Kolev’s findings show that a greater level of tenure diversity, smaller top management teams, and smaller disparity in pay among team members can present a management team with a greater variety of options and help them to make decisions that may be risky but ultimately have high potential for success.4 All members of a team leading a change management effort, need to keep in mind how their background (years of experience, familiarity with the organization, seniority and more) might affect their perspective of the change and should try to empathize with other employees and understand their perspectives.
Strategies for managers faced with organizational change
No matter what change management framework an organization chooses to follow, there are interpersonal strategies one should keep in mind when leading these types of projects.
At a top management team level:
- Seek agreement on a common vision for change so there are no competing initiatives.
- Make a plan for what will be measured and how the transition’s success will be measured and what next steps will be if an effort is unsuccessful.
- Set up rewards for employees who are properly implementing the new behavior or process and consider a celebration or marking of the cessation of change in a positive way.
As a manager leading a team of employees:
- Communicate early and often about “what’s in it for me?” from a variety of stakeholder perspectives
- Send messages through a variety of channels: email, intranet, meetings
- Anticipate resistance to change and try to get ahead of questions or concerns
- Listen and respond to feedback
Organizational change management frameworks
Kotter 8-Step Process for Leading Change
This multi-step process has been honed over decades by Dr. John Kotter, a scholar and authority on leadership and change. The steps are as follows:2
- Create a sense of urgency and inspire people to act.
- Build a guiding coalition or committee of leaders to take responsibility for the efforts.
- Form a strategic vision to paint a clear picture of the desired goal.
- Enlist volunteer employees across the organization to help push buy-in for your vision.
- Enable action by removing barriers like silos and budget constraints.
- Generate short-term wins by tracking progress on small scales.
- Sustain acceleration by following through on all necessary steps of the transition.
- Institute the change by articulating the connections between new behaviors or processes and the organization’s success.
McKinsey & Company’s 7-S Framework:
The McKinsey model was created in the 1980s and divides tenets of change into “soft” and “hard” areas. Strategy, structure and systems are considered “hard” elements which are easier to define than the “soft” elements of style, staff, skills and shared values. This model is meant to emphasize the importance of intangible factors in change. To use this model, each element should be defined and assessed as to whether or not a certain decision aligns with the seven elements.3
Kurt Lewin’s Change Model
Kurt Lewin’s Change Model was developed in the 1940s but remains a go-to framework for understanding change management today. This model consists of three phases: unfreeze, change, refreeze. The first stage, unfreeze, involves preparation for the change: defining the issue, setting a strategy and gaining support for the change. The second stage, change, doesn’t happen overnight, of course. It requires training, constant communication, implementation of a new process, and continued iteration. The refreeze stage occurs when adjustments are coming to a halt. Success is being measured, feedback systems are established and employees are continually supported.4
Tackle organizational change management like a pro
No matter the framework, good leadership is at the core of successful change management. Build skills essential to leading employees in a successful contemporary business when you earn an online Master of Business Administration or online Master in Management from Marquette University. At Marquette you have the opportunity to learn from Dr. Kolev and other industry experts on business topics like organizational change, people management, business psychology and much more. Schedule a call with an Admissions Advisor today for more information.
- Retrieved on October 12, 2022, from techtarget.com/searchcio/definition/organizational-change-management-OCM
- Retrieved on October 13, 2022, from kotterinc.com/methodology/8-steps/
- Retrieved on October 13, 2022, from strategicmanagementinsight.com/tools/mckinsey-7s-model-framework/
- Retrieved on October 13, 2022, from mindtools.com/pages/article/newPPM_94.htm
- Retrieved on October 12, 2022, from journals.sagepub.com/doi/full/10.1177/1476127020962683