What Is Organizational Change Management?

Failure to innovate has caused the demise of some of the world’s most successful and prominent businesses. A 2019 Forbes article revisits the story of one: Blockbuster Video, the DVD and game rental chain store. Once the market leader, Blockbuster failed to recognize emerging technological trends and committed to its brick-and-mortar model, allowing Netflix “to soar past them as they attracted millions of keen customers who wanted to view their movies or favorite shows on their devices.”

Blockbuster’s error is clear in hindsight, but so too are the reasons for its hesitancy to change. In business, as in life, change can be scary. Leadership may find comfort in fixed routines, familiar business processes, and established tools. By the time they’ve asked “Why rock the boat?” the tidal wave that will capsize them may be on its way.

Adapting to an evolving landscape is vital to growth. So how do businesses change effectively? This article answers the questionwhat is organizational change management? It addresses the following topics:

• What is change management?
• Organizational change
• Why is change management important?
• Change management skills
• Obstacles to change
• Types of organizational change
• How does organizational change management fit in?
• Studying organizational behavior management

What is change management?

Developing a sound change management strategy is essential to achieve company success. To understand how to manage change within a business environment effectively, consider organizational behavior (OB) and how it functions within a company’s infrastructure. Organizational Change defines organizational behavior (OB) as “the systematic study and application of knowledge about how individuals and groups act within the organizations where they work.”

The OB model divides stakeholders into three groups: the individual, the team, and the organization. OB examines these three active organizational agents to understand how they relate to one another and to the company. Implementing change with OB means understanding how new systems impact employees, then finding the most successful change management solutions to meet the needs of team members.

Organizational change

Organizational change is any adjustment undertaken by an organization or group that modifies how that group behaves. It can include new processes in project management or involve leadership changes resulting in top-down structural transformation on an organizational level. It also includes alterations to technologies, methodologies, infrastructure, and systemic changes to a company culture that affect the entire organization.

No matter what kind of internal change a company undergoes, the risk of rejection is greater without buy-in from the employees. Adopting a sound change management strategy that focuses on the people side of change is key to promoting healthy company infrastructure and reducing the risk of change rejection.

Why is change management important?

Organizations must advance their products and services to stay competitive in their industries. Whether adapting to new technologies or updating company initiatives, implementing successful organizational transformation means having a sound change management strategy.

So, how does an organization develop a change management plan?

Applying an effective change management model is an excellent place to begin. Jeff Hiatt, the founder of the consulting firm, Prosci, developed the ADKAR model, which breaks down the elements needed to achieve successful change within organizations.

The ADKAR model is:

• A: Awareness of the need for change
• D: Desire to participate and support the change
• K: Knowledge of how to change
• A: Ability to implement desired skills and behaviors
• R: Reinforcement to sustain the change

The ADKAR model asserts that companies need to support and train the individuals responsible for implementing organizational changes to produce effective change throughout the enterprise. This model engages team members from the top down to participate.

Change management skills

Companies that successfully navigate the change management process employ people-centered strategies in their plans. Understanding that people are the change agents within every enterprise, the Society for Human Resource Management (SHRM) explains that organizations must prepare for and thoughtfully implement change by engaging employees in their transformation. Effective communication plans engage employees to help usher in change.

SHRM promotes an approach developed by John Kotter, a Harvard Business School professor. According to this model, there are 8 steps to the change management process.

1. Create a sense of urgency. Effectively communicate an urgent need for change to the current state.
2. Build a guiding coalition. Generate a leadership team with common goals.
3. Form a strategic vision and initiative. Craft a clear and communicable vision that motivates people.
4. Enlist a volunteer army. Communicate how the change will improve business.
5. Enable action by removing barriers. Eliminate obstacles to successful change through training existing employees and hiring the most qualified individuals.
6. Generate short-term wins. Support and acknowledge milestones in the change process.
7. Sustain acceleration. Sustain enthusiasm for change by rewarding change agents with promotions and developing employees who can implement change.
8. Institute change. Link changes to shared values, group behavior, and communication.

Research shows companies that focus on their employees and how the team members communicate within the organization tend to be healthier organizations.

Obstacles to change

Organizational transformation fails when companies focus on change as a project with a beginning and end. Companies should implement change generated by change makers committed to perpetual agility. Companies that undergo successful organizational change understand that people are the front-line agents of change. Supporting them with the tools to make change happen and encouraging them to seek new opportunities for change are the keys to success.

Types of organizational change

Whatfix.com, a company that helps companies adapt improved technologies and processes, breaks down organizational changes within a company into one of six categories:

• People-centric change
• Remedial change
• Strategic change
• Structural change
• Technological change
• Unplanned change

Let’s look a little closer at the kinds of changes that take place in an organization or company.

People-centric change

People-centric change impacts people directly. For example, new or improved processes for hiring and firing, employee management protocols, job responsibilities, or guidelines for employee benefits.

Remedial change

Organizations react to a problem with remedial change. Discovering an issue, finding a remedy, and implementing a solution are integral steps for successful remedial change.

Strategic change

Strategic change encompasses top-down transformation within an organization. For example, revising the mission of the company or restructuring products based on changes in societal needs.

Structural change

Changes in management or team composition represent structural change. Structural changes are often necessary when companies merge with other organizations. In these instances, companies may combine or eliminate departments.

Technological change

Constantly evolving innovations require companies to adapt by implementing new technologies and platforms. Companies must roll out more efficient employee tools as they transform to meet changing industry needs.

Unplanned change

Unplanned change is an unpredictable and unexpected organizational shift that significantly impacts the employees and team members.

COVID-19 was an excellent example of unplanned change. Some organizations had structures in place that enabled them to adapt well when they shifted to a remote workforce during the pandemic. Many more companies have now implemented such plans in the event of future emergencies.

How does organizational change management fit in?

Cultivating a capable, motivated change management team is critical to help guide an organization through transformation.

HR must support effective change management teams. The change agents responsible for leadership must be a powerful force of experts driven toward a unified goal of a company transformation. Working together, an effective change management team can model and motivate to achieve positive organizational change.

Studying organizational behavior management

Organizational change management is a growing field of study as more and more companies strive to implement changes using methodologies that empower the entire organization.

At the College of St. Scholastica, students can take online courses specifically devoted to organizational behavior.
Marquette University offers online courses to help prepare students to become effective change management agents in their desired fields.

Organizations that employ thoughtful change initiatives during company-wide transformations tend to have a more significant positive impact on their business environment. Engaging strong leadership teams in the change effort can develop more profound commitment from stakeholders and improve productivity and employee morale throughout the organization.

Questions or feedback? Email editor@noodle.com