What is Organizational Change? – A Guide

By Aileen Padua - Published on October 22, 2020
Organizational Change Guide

It’s known that organizational change isn’t always an easy change to adapt to. However,  companies or businesses use organizational change when they want to alter a major component of their “organization”. This includes culture, infrastructure of operations, or technology that the company uses. Learning more about organizational change can benefit your business in many ways and make room for more improvement along the way.

What is Organizational Change?

Organizational change is the process of transitioning a company’s current state to a more improved state. When managing organizational change, it’s required that you plan and implement a change within your organization. That way, this can minimize any resistance against employees and major costs to the organization while maximizing change at the same time.

The Causes of Organizational Change

  •  Change in Business Structure

    One of the main causes of organizational change is the need to be changing the structure of your workplace. This can span from anything involving own methods of keeping track of customer journeys, how to market better to your consumer demographic, or even the simple things such as software updates. Overall, having departments like HR or supervisors seeking change within organizations, is a main cause. 

  • Outdated Technology

    A main factor that contributes to change management is outdated technology. You want your organization to be ahead of the game. So why not start by getting up to date with tools or software that’s typically used in your field. Continuing to work with outdated material and technology will not lead you down a successful path. It’s all about how your organization will progress throughout change. 

  • Governmental Priority Change

    Changes in government can take place. Hence, why it’s another reason that organizational change can occur. If a new leader is elected into the government, then it’s safe to say that this would mean that there will be change in management throughout any type of field of work, which would then lead to stopping certain projects. This can really change up any workplace especially if it’s a priority change conducted by your government. 

  • End of life Products

    Discontinued products tend to stunt the growth of your business’s market. Believe it or not, it can also affect the structure of your company. Company profits begin to plummet, and eventually force you to seek for better sources of revenue. This is another common cause because companies need to think about how to invest in labor and funding into newer products.

Importance of Organizational Change

  • Increase Morale Among Workers

    Implementing the increase in morale among workers can drive positive team building and job enrichment. This can also boost up the will for organizational change. These factors can directly and positively affect productivity and quality of work while shortening production cycles and reducing costs. 

  • Encourages Innovation and Development

    One way organizations can change is to establish policies that encourage innovation. Because multiple companies tend to provide little support in expressing ideas about structures, compensation and productivity, it’s important to use innovation as a way to start the process of empowering employees to support policies developed by senior management. 

  • More Opportunities for Your Business

    Creating change in an organization can open more doors for your business. It can provide that positive aspect by retaining a competitive outlook and also continue to stay relevant within the industry. Organizational change encourages innovation towards developing skills, staff and lead morale as well as  better business opportunities. 

  • Increased Profit

    Generating more sales while reducing expenses, is another tactic in improving change in management. To increase sales, try cross-selling your market. This is when companies offer new services to complement current offerings. Another solution is applying operational change that will increase profits. This will allow the opportunity for new customers to try your products with specials discounts or promotions.

Requirements for Successful Organizational Change

  •  Effective Communication

    Creating effective communication between employees will not only help people understand change and how it will impact the organization, but also keeps change efforts on track. When there is two-way communication, individuals have opportunities to exchange and express feedback.

    According to a survey(1) from Robert Half, 65% of managers have stated that clear and frequent communication was the most important aspect of leading through times of change. Hence, the existence of effective communication before, during, and after an organizational change.

  • Having a Clear Idea

    For any company endeavor, there needs to be a well-defined plan. Successful organizational changes require a clear vision that consists of details for the reason of change, how employees will be impacted, and how it will turn out in the end. Organizations need to have a clear idea that will help them see how things will change and pan out once change is effectively implemented. Without any clarity, it will be hard for employees to seek the reason why they should support change.

    Leaders of organizations can clearly communicate an idea for change effectively by constantly publishing that idea within numerous forums, mentioning it in meetings, and through emails. The more employees become comfortable with the vision for change, the more time they have to embrace and support that idea.

  • Reinforcement and Measurement

    Leading organizational change not only requires reinforcement of new employee behaviors and skills, but measurement of your progress on a daily basis. When leaders use tools to communicate, guide and support employees, the chances of success are greater. Applying regular reinforcement of newly learned behaviors supports better retention of training. This measures progress of employees and oversees how far you’ve come to stay the course.

    Organizational change also requires deliberate focus on developing leaders who can lead others through change. Leaders must possess the ability to explain why change is necessary, how it will impact them, and what each employee must do to make to successfully make that change.

  • Involvement of the Entire Organization

    Successful change management must start at the top, but it doesn’t just stay there. When the entire workforce becomes involved, there’s less of a chance for certain groups to assume that they are willing to change or refusing to participate. In addition, when everyone is included, then there is a greater likelihood that a company will embrace change as a result.

  • Support of Employees

    It’s no secret that change can be a daunting experience, but those frustrations can be put aside through the motivation and support of leaders. Employees need to be shown they’re not alone. Leaders should conduct one-on-one conversations with their employees and provide feedback or suggestions on how to seek change.

5 Ways to Measure Organizational Change

  1.  Create Training Evaluation Surveys

    Conducting training evaluation surveys is a great way to measure how much organizational change is preferred. These types of evaluations should be based on the satisfaction amongst participants across various categories: content, instructor effectiveness, usefulness, and many more. Normally these surveys are paper based, but it can be done online or through virtual training towards the end.

  1. Change Readiness Surveys

    Change readiness surveys are usually surveys done online and sent by project owners. This will measure the understanding of how groups stakeholder groups feel about changing different points in time throughout a project.

  1. Communication Metrics

    Metrics in communication is measured by the number of users that view an article or a page. It can also measure when a certain post is being looked at, and who your main demographic views whatever you publish or release. This can be tracked through any type of data analytics platform. This affects the overall market of your organization.

  1. Culture Surveys

    Organizations use this type of survey to measure company culture amongst employees. They often include open ended questions for qualitative feedback, and sent across the whole organization.

  1.  Heatmaps

     Change heatmaps on excel spreadsheets are used to map out which different departments within an organization are impacted by change. Heatmaps speak to the amount of change and often leads to discussions concerning the capacity that an organization can handle with change.

5 Types of Models for Organizational Change 

  • Kotter’s Theory(2): This model is the most common and popular model that’s used by companies worldwide. It includes eight stages that focuses on each stage of employees responding to change.
  • The McKinsey 7-S Model(3): This model is known to be one of the longest lasting organizational change models. There are seven stages that companies must look out for when implementing changes. 
  • ADKAR Model(4): This is a business oriented model that’s useful if you want to use your goals to support employees in a smooth transition through the process of organizational change. 
  • Lewin’s Change Management Model(5): This type of model tends to be the most accepted and effective organizational change models that companies tend to use because it’s easy to understand the differences with structured changes and organizational change.
  • Kübler-Ross’ Change Curve(6): The change curve consists of five stages. This model is 100% employee oriented, which is unlike the other four models. It empathizes with employees and helps employers understand them better.

Roles During Successful Organizational Changes

  • Change Management Team

    Managers in organizational change teams need detailed change management tools that can analyze, design, and manage activities towards change. They also need to influence the skills of other team members.

  • Leaders

    Leaders must leverage their authority to effectively drive change. They need to have the ability to communicate change, engage and resolve any issues. While leaders don’t need to fully understand detailed methods to organizational change, some tools to help them evaluate and engage their teams can help them stay on track.

  • Change Agent Network

    Change Agent Networks are a group of people throughout an organization who advocate for change and represent their areas to the change team. This can be given to a specific role such as  HR Business Partners or Project Managers. Change Agents within the organization need to be influential and gather information as well as communicate change to employees.

  • Participants

    Those who need to adopt new ways of working must be prepared for implementing changes. You have to be resilient and manage your own experience of navigating change. They also need to actively participate in that change.

Benefits to Organizational Change 

  • A More Fulfilling and Attractive Workplace

    According to a study(7) by Google and Cloudbakers, having a more fulfilling and attractive workplace showed exceeded expectations more than any of the other data points that was measured throughout the study. This is a big benefit to organizational change because it’s both beneficial for you as an employer and your employees. 

  • Decreased Employee Resistance

    Because employee resistance is common, organizational change will make this a primary focal point, making a big impact on project results. With decreased employee resistance, project costs will increase, negatively affect the employee experience, and even stop a project. 

  • Control of Change Management Costs

    Another significant benefit to change in the workplace is the ability for a to meet customer and market demands effectively. If businesses want to keep their budgets in check, they need to take control and effectively manage their change within the organization.

  • Better Project Outcomes

    It’s self-explanatory. One of the biggest reasons to manage organizational change is due to its improved outcomes with performance.

Common Challenges

  • Accepting Change

    The biggest type of challenge for organizational change is accepting that change. People tend to resist change because it’s natural to grow accustomed to trust people depending on the situation. Once change occurs, it will be difficult for some employees to transition to the new type of structure for your organization.

    This will cause a lack of growth for your organization, and possible downhill threats thereafter.  Make sure to provide your staff with support and reassurance by offering new training programs. This will ease the change process for employees and give them time to adapt.

  • Lack of Communication

    Failing to communicate change to your organization can ruin everything. Whether it’s rumors and speculation, having people develop a lack of trust towards staff or management will make it difficult to embrace any type of change for your organization.

    It’s important that everybody stays on the same page. This will keep employees up-to-speed with decisions and overall changes. 

  • Having No Strategic Direction

    Without a game plan, your organization is bound to fall apart. Think about what exact changes need to occur and what solutions you have in mind to move forward with.

    For instance, if you plan to transition to a new management system, then it’s best to see if that system will be compatible with the older system. In addition, assigning roles towards this change should also be considered. Having a strategy will allow you to have a timeline of where you are at with your progress in changing your organization.

  • Fear of Job Security

    Changes in the workplace include fear of employees losing their jobs. Getting laid off is a traumatic experience, which deeply affects an employee, and leads to uncertainty of what the future will hold.

    You want to tell your employees that you understand uncertainty is difficult to deal with, but you also need to be transparent with them.

5 Tips to Manage Change During COVID-19 

  1. Ensuring You Organizational Values Align with Operations

    There are many reasons for change management strategies, but one of the most important reasons is ensuring that the change aligns with the core values of your organization. Your company’s purpose, vision and values should guide every strategic decision being made. If you encounter any issues within your organization, then it’s best to ensure that employees are kept in check with the company’s values.

  1. Reduce Employee Stress and Anxiety

    Mental health is currently one of the problems that people tend to suffer with, especially during this pandemic. Employees fear the worst when it comes to changes in organization. Hence, why it’s important to keep an open mind and make sure that your employees stay physically safe and take care of their mental state of mind. You as an organization need to keep up with new developments, especially with the structure of your organization.

    You want to create an environment that will allow your employees to keep engaged, loyal, and especially productive with assigned tasks. To see more ideas about how to remotely work with your company read our article here.

  1. Create and Provide Different Incentives

    Always compensate your employees. When rewarding employees for achievements, you want to consider acknowledging the standards that your organization holds as well as its daily operations so that the whole ship can sail smoothly. 

  1. Refine Robust Communication

    We understand that during these difficult times that it can be hard to communicate the usual way. That’s why during this pandemic, it’s important to consider what communication was like prior to stay at home orders and other procedures. Find solutions to continue “face-to-face” interactions between employees, or regulate multi-directional communication that can address the efforts of change. This will provide your workplace with a slight sense of normalcy in the midst of COVID-19. 

  1. Implement Passionate Champions of Change

    Everyone wants someone to look up to within a company. You want to look for “passionate champions”, or role models, that are willing to embrace the purpose of organizational change. Once, you establish passionate champions of change, you’re likely going to oversee motivation and possible change towards the rest of your organization.

Final Thoughts

Organizational change can effectively help your company out. It will get your organization ahead of the game within the industry and encourage innovation in the company’s development. There are different types of models that you can abide by when considering organizational change for your company. Another component to also consider is the type of tools to use in order to keep your organization in check. In addition to this newfound information, look out for common challenges that may prolong in creating organizational change.

It’s understandable that organizational change tends to fail with certain businesses but keeping an eye out for certain challenges and the causes behind the lack of change within management will hopefully prevent your company from performing any of the said common mistakes when it comes to organizational change.

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Aileen Padua | Aileen Padua is an aspiring social media coordinator. She is currently majoring in Advertising at Fresno State University. With her understanding about the power of social media, Aileen is passionate about preserving and enhancing the image of one’s reputation in the public eye.

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Aileen Padua | Aileen Padua is an aspiring social media coordinator. She is currently majoring in Advertising at Fresno State University. With her understanding a...

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