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What Is Organizational Change?
Organizational change is a process that involves moving the business from a current state to a desired state. Such changes can be large or small and involve adaptations to structure, strategies, processes, technology, culture and other aspects of the business.
Goals of organizational change can be to improve performance, adapt to new market conditions, enhance financial standing, or implement new systems to gain a competitive advantage.
For example, two Canadian credit unions merged to form Prospera and become one of the biggest competitors in their industry. Guided by Prosci, the companies successfully integrated their workforces while implementing new systems and delivering excellent customer service.
Any change is a process you can break down into three stages: the current state, the transition state, and the future state. The current state is where your organization stands today, and the future state is where you want to go as the result of a change. The transition state is where the change takes place, and it's often challenging.
To drive change success, organizations must focus on both the technical and people side of change. The graphic below shows what change in the workplace looks like when the two sides are well integrated.
Prosci Unified Value Proposition
The technical side of the change is often the work done by project management or solutions development teams.
The people side involves helping affected individuals and teams adopt and use the change in their work. Change management helps employees through this process providing guidance and support throughout the lifecycle of the change.
Change management also reveals how a change impacts employees and enables companies to develop strategies that minimize resistance and other disruptions that can lead to project failure.
Types of Organizational Change
Many types of organizational change exist. Let's review five of the most common:
- Restructuring – Organizations can reorganize their internal hierarchy, including roles and business areas, to streamline operations, reduce costs, and improve overall effectiveness. This will have significant impacts on the way people do their jobs.
- Strategic change – These changes impact the organization's long-term direction and objectives. Businesses make strategic changes to enter new markets or offer new products, change the business model, or improve operational effectiveness.
- Digital transformation – Digital transformation initiatives integrate new technologies or upgrade existing systems, drastically changing how the organization operates and delivers value. This can involve adopting new software, automating processes, and leveraging data analytics. Domino’s Pizza’s successful digital initiatives in the 2010s are a great example of this type of change. This pizza brand introduced mobile and online orders and live order tracking to improve customers’ experiences and gain a competitive advantage.
- Operational change – This type of change focuses on optimizing daily operations, processes or workflows to increase productivity and product quality.
- Culture shift – Changes to the company culture fundamentally shift underlying beliefs, values, norms and behaviors to align with strategic objectives. Cultural change initiatives aim to build collaboration, innovation, inclusivity or customer-centricity.
The type of change an organization undertakes depends on the reason for the change. Every change must have a specific reason, which should demonstrate how the change provides the desired business outcome.
The Benefits of Organizational Change
When the reason for change is clearly defined and backed by data, organizations set themselves up for successful change. Successful change offers a variety of benefits, which can include:
- Increased efficiency – Streamlining processes and adopting new technologies can reduce waste and enhance productivity.
- Improved competitiveness – Companies can maintain or gain a competitive edge by staying current with industry trends and disrupting them with innovations.
- Better decision-making – Change can improve data collection and analysis, making more informed, data-driven decisions.
- Reduced costs – Eliminating redundancies and redesigning processes can greatly reduce expenses.
- Greater innovation – A change-ready organization incorporates continuous improvement and innovation, which leads to new ideas and approaches.
- Upskilled employees – Changes can require employee training and development, enhancing skills and enabling career growth. Many initiatives also aim to improve employee engagement.
- Higher customer satisfaction – Better products, services and customer interactions resulting from change initiatives can increase customer satisfaction and loyalty.
- Enhanced adaptability – Organizations become more flexible and better able to respond to market changes, technological advancements and evolving customer needs.
When managed effectively, change can contribute to an organization’s long-term success and sustainability.
Building a Competent Change Management Team
The first step toward managing change effectively is building a team of change experts, leaders, managers and employees. Each of these roles plays a vital part in the change. They often work together and are supported by additional roles, like business analysts and subject matter experts.
Let’s take a closer look at the five primary roles in a change management team:
1. Change practitioners
Change practitioners are dedicated professionals who specialize in guiding organizations through the people-side aspects of the change process. Their expertise in change management resources, tools and techniques is crucial for planning, executing and sustaining adoption of change initiatives.
The change team applies a structured approach to manage the human aspects of change, mitigate resistance, and ensure stakeholder alignment. They build strategies, develop role-based plans and implement activities, and support other roles to enable success.
Practitioners need dedicated change management resources to be effective in their roles. These resources help ensure everyone is focused on their designated change activities and can be held accountable.
Prosci research shows that change management effectiveness and having sufficient resources correlate directly.
Correlation of Sufficient Resources and Change Management Effectiveness
Enterprises also allocate change management resources to a tailored training program, so they can enable employees at every level of the organization to fulfill their important roles during change.
2. Sponsors
Active and visible sponsorship has been the top contributor to change success in Prosci research since 1998. A primary sponsor is the leader who authorizes the change and is ultimately accountable to the organization for achieving the desired outcomes.
The primary sponsor can enlist other sponsors to form a coalition of key business leaders and stakeholders who advocate for change in the organization's various areas.
Sponsors must lead by example and visibly participate in change activities throughout the transition. They guide the change by making influential decisions, maintaining effective communication, and motivating peers and employees.
3. People managers
People managers are typically team leaders, managers and supervisors. They’re essential for communicating about changes to their teams, addressing concerns, and supporting employees throughout the lifecycle of the change.
People managers act as communicators, liaisons, change advocates, coaches and resistance managers. They clearly convey the change message and take steps to ensure staff engagement and support.
4. Project manager
The project manager is responsible for the change’s design, development and overall delivery. They oversee the technical side of change, ensuring it stays on schedule and within budget, and meets objectives.
Their role is crucial for coordinating activities, managing technical risks, integrating the technical side and people side of the change, and aligning with the overall organizational strategy.
5. People/impacted employees
The individuals affected by the change are at the core of any change management initiative. Organizational change requires individual employees to adopt and use new processes or adapt to new structures.
These changes impact people and their jobs in various ways, from roles and processes to reporting structures and attitudes. Assessing the impacts is a critical step toward understanding where people will need help making the change. Engaging impacted employees early, using change management strategies, delivering clear communication, and offering training and support helps minimize resistance.
Managing Change in the Workplace
Change management provides a structured approach for individuals, teams and organizations to transition from their current state to the desired future state.
A well-defined change approach, like the Prosci Methodology, can help you effectively manage the people side of change, ensuring that organizations implement changes successfully to achieve lasting benefits.
Here are five reasons why change management is vital:
1. Team alignment
A key framework in the Prosci Methodology, the Prosci Change Triangle (PCT) Model highlights the four aspects of a successful change and how they relate to each other. Among other things, the PCT Model clarifies responsibilities across key functions: Leadership/Sponsorship, Project Management and Change Management. It also provides a common language and aligns the team around a common goal of success.
Prosci Change Triangle (PCT) Model
2. Reduce resistance to change
Any change can be stressful for those impacted. Uncertainty about the change and its outcomes, changes to work habits, the potential for layoffs, and other personal factors can cause employee resistance that can hinder a change initiative.
Using the Prosci ADKAR® Model, change teams can alleviate these fears and mitigate resistance by building awareness, providing knowledge and offering support.
Prosci ADKAR Model
Our ADKAR Model has five stages: Awareness, Desire, Knowledge, Ability and Reinforcement. Using this model for individual change, change teams can educate employees on why a change is happening, its benefits, and how it will impact their roles.
As a model for individual change, the ADKAR Model enables you to prepare and equip people for the change, so they can successfully adopt and use it in their work.
The ADKAR Model also helps change teams plan for activities and programs that can help employees develop their skills to match new systems or workflows. All of these factors ease employee fears and reduce resistance.
3. Enable a smooth transition
Change management provides a structured framework for planning, implementing and monitoring changes. While every change is a unique process and some are more complex than others, having a repeatable approach to guide you makes it easier to plan and manage change at scale.
Another key part of the Prosci Methodology, the Prosci 3-Phase Process offers a structured approach that helps teams plan each change phase in detail. Practitioners use the process to enable individual change at scale, bridging the gap between individual and organizational change.
Prosci 3-Phase Process
The three phases of this process are:
- Phase 1 – Prepare Approach – Change and project teams define success, its impact on individuals, and the strategy they will use to reach project objectives.
- Phase 2 – Manage Change – In this phase, practitioners develop and implement change management plans and activities, monitor and evaluate progress, and adjust their approaches as needed.
- Phase 3 – Sustain Outcomes – Practitioners enable long-term success, even after the go-live date, by assessing performance metrics, implementing reinforcement activities, and eventually transferring ownership of the change to key stakeholders.
A comprehensive, well-defined approach like the Prosci Methodology helps minimize disruptions while ensuring that people are able to do their jobs using the change, ultimately leading to better results and outcomes.
4. Increase chances of success
Well-deployed change management strategies improve the likelihood of project success. They help change teams focus on the people involved, deliver people-dependent ROI, and align requirements with results.
Prosci research has shown that initiatives with effective change management are up to seven times more likely to succeed.
Correlation of Change Management Effectiveness With Meeting Objectives
Change management also mitigates the costs and risks of focusing solely on the technical side of change. When an organization ignores the people side of a change, the project often suffers delays or even failure. It also lowers employee morale, increases attrition, lowers productivity, increases costs, reduces project ROI, and creates other consequences.
By following a proven approach to effectively manage change, you address potential roadblocks early and systematically, to enable more successful change.
5. Enhance organizational agility
Effective change management builds an organization’s capacity to handle future changes more efficiently. It creates a culture that’s open to change, where continuous improvement, experimentation and innovation are encouraged.
Change management embeds flexibility and resilience into an organization by using transparent communication, mitigating risks, and improving decision-making. It creates adaptable employees who view change as an opportunity rather than a threat.
Organizations can create this change-ready workforce by working with expert Change Advisors who guide you through the change management process every step of the way.
Measuring and Sustaining Change
Tracking performance during and after a change initiative is crucial for assessing progress toward desired goals. Because change happens one individual at a time, change teams focus on three human factors that define project ROI:
- Speed of adoption – How quickly employees adopt the new system, process or job role
- Ultimate utilization – How many employees use the change
- Proficiency – How well individuals perform with the change
Each of these has a direct impact on project returns. For example, if 100% of employees need to adopt the change for the project to succeed but only 80% do so, there’s a measurable impact on ROI.
Reinforcement and sustainment are also crucial factors that affect project outcomes. Because people naturally return to their old working methods, planning for and implementing reinforcement activities is essential for long-term adoption.
Based on Prosci research, 81% of participants who planned for reinforcement met or exceeded project objectives, compared to only 15% of participants who did not plan for it.
Impact of Planning for Reinforcement on Project Success
Common reinforcement tactics include:
- Employee feedback
- Celebrations for project progress
- Feedback from direct supervisors
- Visible recognition from senior sponsors
- Publicly visible performance scoreboards
- Compensation or appraisal systems built to support the change
Implementing change isn’t enough—it must be sustained to realize its full benefits. Change management ensures that mechanisms are in place to reinforce and maintain the change.
Successfully Manage Change in the Workplace With Prosci
Managing change in the workplace involves careful planning, clear communication, and commitment from leadership—and that's just a start. To be successful, you can use a structured change management approach that helps your teams proactively plan and manage all aspects of the change. Applying a research-based, proven approach like the Prosci Methodology equips you to successfully drive the technical and people sides of the change, so you can achieve the organizational results you need.