What is organizational change management?
Written by Owen Barker | 24th April 2024
Change is inevitable in life – and that applies to the corporate world, too. Whenever a change occurs, it’s vital to ensure employees are on board with the changes and that business operations are not negatively impacted.
A successful organizational change can be as simple as providing employees and stakeholders with guidance to help them adapt to the new processes. This reduces their resistance to change and boosts goodwill for the transition, allowing leaders to effect the change with ease.
In this article, you’ll learn about organizational change management, why it’s essential, and a few examples of common changes you may encounter.
What causes organizational change?
Organizational change can result from internal or external factors.
A change in the internal organizational structure or leadership may result in this type of change. A business may also adopt new operating models or business processes, requiring other adjustments.
Other internal or organizational-level change factors include:
- Product retirement or pulling from the market
- Internal process failure
- Ineffective communication within the organization or business
External factors such as changes in market conditions or the adoption of emerging technologies may also result in organizational change. Other external change factors include:
- Changes in market preferences
- Social, political, or economic changes in the business’s location
- Changes in regulatory standards
- New competitors
Whatever the cause, organizational change can be categorized into two main types:
Adaptive changes
These refer to small incremental changes necessary for businesses and organizations to address frequently evolving needs. An excellent example of an adaptive change is when organizations upgrade their OS from Windows 8 to 10. A company may also switch to a new email finder tool to look for contact details for its outreach campaigns. This requires internal training before launching the tool..
Transformational changes
These are large-scale changes in structure, strategy, performance, mission, and processes. These changes usually occur simultaneously and require lots of time and capacity building for everyone on the team to adapt. An example of transformational change is when a business has a new CRM solution, which all staff members have to learn to use.
We’ll look at common examples of these two major types of organizational changes later.
Suffice it to say that change is beneficial and should be embraced. As we will see in the next section, it is an integral part of business growth.
What is organizational change management (OCM)?
Organizational change management is the practice of curbing any negative effects that may result from changing business frameworks. Leaders apply people-focused structures to boost the positive benefits of these changes. That way, they carry the entire team along and avoid leaving any staff member behind as the business transitions.
Importance of organizational change management (OCM)
Effective change management is vital because it helps employees adapt to transformation without suffering much shock. With an effective OCM system, everyone will know what is expected of them in the new era, leaving no room for guesswork or confusion.
It also encourages simple and effective communication and leaves no room for misinformation. As a result, employees are able to develop new skills and remain motivated despite the emerging changes. Plus, it lowers employee resistance to change.
A good OCM structure also helps businesses avoid major expenses that may result from broken workflows. Broken workflows occur when employees don’t understand the change, why it’s necessary, or what to do to plug into the transformation. This then lowers employee morale and impacts company culture and employer branding.
OCM is essential for keeping production and output levels at par as changes occur. Employees can keep doing their best while key stakeholders and suppliers are kept in the loop. Moreover, a good OCM structure builds stakeholder trust in the company. This is because they can be assured that no sudden changes can occur that will affect their partnership with the company.
With the rapid tech advancement occurring by the day, organizations constantly need to evolve to take advantage of emerging tools. Tech advancements like AI templates, machine learning, process automation, and data analytics tools continue to push companies to adopt new technologies for more efficient processes. OCM helps ensure seamless user adoption.
A robust organizational change management system also adopts enterprise architecture as a strategy. This helps businesses align these new technological tools with the business goals and objectives.
Common organizational change examples that require OCM
There are adaptive and transformational changes businesses typically encounter that require OCM. These are:
Leadership change
Struggling organizations tend to shake up their top offices or upper management structure in a bid to bounce back. This means changes in the management process. Essentially, businesses appoint a new president, CEO, marketing, and sales managers with essential management skills.
A fresh leadership team can help breathe new life into the organization’s vision, mission, and business goals. They can help disrupt the status quo and ensure the likelihood of success of the company.
New business processes
As a result of the world’s transition from analog to digital, organizational changes also occur in businesses. Some may adopt remote working schedules for their employees, others may take the e-commerce approach, and so on. Transitioning to cloud storage instead of on-premises servers is also a major process change.
Additionally, businesses are using cloud CRMs more widely, leading to massive process changes in companies. A pro tip is to set up training programs or create custom explainer videos to guide your employees through using the new tools.
New business processes
As a result of the world’s transition from analog to digital, organizational changes also occur in businesses. Some may adopt remote working schedules for their employees, others may take the e-commerce approach, and so on. Transitioning to cloud storage instead of on-premises servers is also a major process change.
Additionally, businesses are using cloud CRMs more widely, leading to massive process changes in companies. A pro tip is to set up training programs or create custom explainer videos to guide your employees through using the new tools.
Job reassignments and new roles
Whenever there are layoffs in a company, some roles must be reassigned to keep the business moving. Using technology for further job efficiency may also make some roles obsolete, leading to role reassignments. These require effective OCM to help workers ease into their new job descriptions.
Acquisitions and mergers
Acquisitions and mergers occur when two companies decide to assimilate to expand their market share or achieve certain financial objectives. This leads to two companies with varying cultures coming together. As a result, rigorous organizational change management must be done for all employees to settle into the new company culture.
Conclusion
Organizational change management is the structured approach used to curb any negative effects of changing business frameworks. It is caused by various internal and external factors like leadership, process, regulatory, and technological changes.
It’s essential to have an excellent change management structure to boost employee morale, maintain product output, and curb misinformation or confusion. Ultimately, with it, you also boost stakeholder trust.
Now put in place an excellent organizational change management system to ensure your business growth.
Author's bio
Owen Baker is a content marketer for Voila Norbert, an online email verification tool. He has spent most of the last decade working online for a range of marketing companies. When he’s not busy writing, you can find him in the kitchen mastering new dishes.
