Change Management

Organizational Change Management Models for Enterprises

organizational-change-management-models-for-enterprises

From adapting to the latest technology to responding to the economic and logistical challenges presented by COVID-19, the need for companies to implement and adapt to organizational change has never been greater. Successful business transformation requires the right change management models and tools. 

Models and management theories can help plan for your change and think about how to overcome resistance from your employees.

In this guide, we’ve highlighted the most common types of organizational change and which change management models work best for each of them.

 

 

Types of Organizational Change

Types-of-Organizational-Change

Organizational change is a broad term that can apply to a multitude of situations ranging from something as far-reaching as merging with another company to something as focused as switching out your telephone system.

For the purposes of selecting the best change management modes, it is important to analyze what you are trying to achieve so you can determine what types of organizational change you’ll need to implement.

In general, most initiatives can be categorized as one of three main types of organizational change:

 

  1. Structural: These changes involve changing the business or management structure of the organization. Common examples include mergers and acquisitions or restructuring.
  2. Procedural: These changes involve changing how a company makes a product or delivers services. Procedural changes also can include internal workflows. For example, switching manufacturing equipment or using a new CRM system like Salesforce are both procedural changes.
  3. Cultural: These changes are about modifying employee’s behaviors, attitudes, and skills.

Organizational Change Matrix: Types of Change

You can further classify changes by examining their scope and purpose. The following matrix was adapted from Authenticity Consulting’s Major Types of Organizational Change.

Ask if your change is:

  • Company-wide or Subsystem?
  • Transformational or incremental?
  • Remedial or developmental?
  • Planned or Unplanned?

Company-wide or Subsystem

Company-wide

  • Impacts the entire organization
  • Examples:
    • Restructuring the entire reporting structure
    • Cultural changes

Subsystem

  • Limited in scope to a department or unit
  • Examples:
    • Restructuring a team or department
    • Modifying or retiring a product line

Transformational or Incremental

Transformational

  • Radical or fundamental changes to the way a company operates and does business
  • Examples:
    • Business process reengineering
    • Development and execution of a new strategic direction

Incremental

Remedial or Developmental

Remedial

  • Address a current problem or weakness. Change is reactive in nature.
  • Examples:
    • Fixing a security issue with a product
    • Eliminating an underperforming business unit. 

Developmental

  • Focused on growth and improvement. Change is proactive and future-oriented.
  • Examples:
    • Expanding into a new market.
    • Launching a new product.

Unplanned or Planned

Unplanned

  • Caused by external and/or unforeseen circumstances. The company is reactive in this case and most often unorganized in their change efforts.
  • Examples:
    • Response to the COVID-19 crisis
    • The sudden resignation of a key leader

Planned

  • Initiated by the company’s leadership team with a specific business goal in mind.
  • Examples:

 

Free-E-book

 

Examples of Types of Organizational Change

Often elements of your change management plan will include several different categories of change. Take a digital transformation, for example. Companies in the midst of a digital business makeover will experience nearly all the types of change mentioned above:

  • Structural - Companies may need to modify their reporting structure and business units to align with their new digital business initiative.
  • Procedural - The technologies and processes the company uses will be updated.
  • Cultural - The mindset and skillset of the workforce will need to change to a digital and tech-centric philosophy.

Furthermore, the digital transformation will cover all aspect of the matrix we reviewed:

  • Company-wide and Subsystem
    • Digital transformation is company-wide by its nature but will also require specific changes for each subsystem as different departments will need unique tools or software.
  • Transformational or incremental
    • Digital transformation isn’t a once and done process. You have to continue to analyze and optimize. The initial rollout of new technology is transformational, but its continued improvement is incremental.
  • Remedial or developmental
    • Digital transformation is developmental but as you start to update your processes, you’ll identify new weaknesses and introduce remedial changes as a result.
  • Planned or Unplanned
    • In most cases, a digital transformation is planned, but since technology changes at such a rapid pace, some of it will be unplanned as you adjust to updates and improvements in your software and tech stack.

In addition to a digital transformation, other common organizational change examples include:

  • Mergers and acquisitions
  • Downsizing
  • Bankruptcy
  • Outsourcing
  • Expansion

For help with these types of organizational change, check out this toolkit from the Society for Human Resource Management.

 

Change Management Models

Change-Management-Models

When preparing for organizational change, it is important to adopt a framework. These change management models and theories will help guide you in what to include in your plan and how to overcome common problems such as people’s natural resistance to change.

We’ve summarized the top nine most frequently used change management models:

  1. Kotter’s Theory of Change Management
  2. Lewin’s Change Management Model
  3. The McKinsey 7-S Model
  4. Nudge Theory
  5. Kübler-Ross Change Curve
  6. Satir Change Management Model
  7. PDSA Cycle
  8. ADKAR Change Management Approach
  9. Bridges’ Transition Mode

1. Kotter’s Theory of Change Management

Harvard Professor John Kotter’s 1996 book Leading Change is a go-to reference on how to navigate change in business. Kotter outlines an 8-step process for organizational change:

  1. Create a Sense of Urgency
  2. Build a Guiding Coalition
  3. Create a Strategic Vision
  4. Communicate the Vision
  5. Enable Action by Removing Barriers
  6. Generate Short-Term Wins
  7. Sustain acceleration
  8. Anchor Changes in Corporate Culture

Kotter’s theory is one of the most popular change management models because it does a great job of establishing a sense of urgency and explaining why change is needed. Where it comes up short is in its lack of feedback from all levels. Kotter takes a top-down approach. If you start with these steps, be sure to incorporate some ways to build grassroots momentum and solicit feedback from frontline employees.

Related: 8-step Change Management Process For Software Implementation

 

2. Lewin’s Change Management Model

Lurt Lewin developed his change model in the 1940s, and it’s still popular today - primarily because of its simplicity. The model breaks up organizational change into three steps:

Unfreeze

Change

Refreeze

  • Decide what needs to change.
  • Analyze your current processes and identify what needs to change.
  • Communicate the need for change.
  • Make the change.
  • Communicate often about the benefits of the change.
  • Give time and training for people to get used to the change.
  • Internalize and insitutalize the change.
  • Create a sense of stability to sustain the change.
  • Celebrate successes.

 

The Lewin model for organizational change is deceptively simple since it’s only three steps. You will need to fight the temptation to rush through each phase. It takes time to plan, execute, and reinforce a change. Make sure you give enough time for employees to get used to the changes and provide opportunities for them to give feedback.

Read More: Lewin’s Model: Understanding the Three Stages of Change

 

3. The McKinsey 7-S Model

The McKinsey 7-S model was outlined in the book In Search of Excellence by McKinsey consultants Thomas J. Peters and Robert H. Waterman. Instead of focusing on structure, the model emphasizes the need for coordination and maps out a series of interconnected factors that impact a company’s ability to change. These seven elements are:

  • Strategy - your plan for how to compete and succeed in the marketplace
  • Structure - how your organized i.e. your business unit and reporting structure
  • System - the processes and technologies employees use to get their jobs done.
  • Shared values - core values as defined by the company’s corporate culture and work ethic
  • Style - leadership approach to managing the company and employees
  • Staff - the company’s workforce
  • Skills - employees’ collective knowledge and skill set.

The 7-S Model’s strength is helping organizations understand that status quo so they know what needs to change. The model also helps illustrate how any organizational change will impact all seven elements. The model is less effective at actually guiding companies through making the change. The McKinsey model might be best paired with a more actionable change management framework.

Read More: Enduring Ideas: The 7-S Framework

 

4. Nudge Theory

Richard H. Thaler and‎ Cass R. Sunstein outlined the ideas behind nudge theory in their book Nudge: Improving Decisions About Health, Wealth, and Happiness. The approach gentry guides or suggest users make a change without strict enforcement or penalizing non-compliance. Companies should present the change as a choice and remove as many obstacles as possible to make it more likely people comply. They’ll also need to celebrate small wins and highlight the benefits of the change.

Companies have found success in using the theory to encourage more people to contribute to their retirement plans. Governments have used it to increase the number of people signed up for organ donation. Each of these actions is a one-time choice by the participant. When dealing with complex organizational change, companies may need a more structured change management framework.

Read More: Nudge theory can help change your employees' behaviour (without them even realising)

 

5. Kübler-Ross Change Curve

You may be familiar with the Kübler-Ross Change Curve because it’s based on the five stages of grief outlined by psychiatrist Elisabeth Kübler-Ross in her 1969 book On Death and Dying. She focused on how terminally ill patients processed their grief about facing death. She outlined five phases:

  1. Denial
  2. Anger
  3. Bargaining
  4. Depression
  5. Acceptance

So why is a theory about grieving in a list of change management models for business? People are naturally resistant to change. The change curve applies the five stages of grief to the emotions employees deal with when adjusting to an organizational change. The stages look a little different:

  • Shock - Employees surprised by the change.
  • Denial - Employees in disbelief about the change.
  • Frustration - Employees begin to recognize things are different and become angry.
  • Depression - Employees unmotivated to work or complete the change.
  • Experiment - Employees energized the prospect of something new.
  • Decision - Feel more comfortable with the change, employees learn how to work in the new environment.
  • Integration - Employees fully adapt to the change and make it part of their work life.

The model is a great resource for thinking about and managing your employees’ reactions to a change but doesn’t provide an overall framework for initiating organizational change. Consider pairing it with another model.

Read More: Kübler-Ross Change Curve Illustrations

 

6. Satir Change Management Model

The Satir model is also based on the five stages of grief. It can be used to model how employees are performing during the change. The five phases are:

  • Late Status Quo - This is how things operate before you introduce the change. You can expect stable levels of productivity.
  • Resistance - This is the first phase after you introduce the change. You can expect some resistance which will lead to a decrease in productivity.
  • Chaos - This is the lowest point in your productivity as the change starts to take its full emotional toll on your workforce. This is when you’ll need to provide the most support to make your change successful.
  • Integration - Productivity starts to improve in this phase as people adjust to the change, but you will need to provide positive reinforcement to keep the momentum going.
  • New Status Quo - This is when you can expect productivity to become stable again (hopefully at a higher level than when you started) as people accept and integrate the change into their work.

Like the Kübler-Ross model, this framework isn’t great at helping you plan and execute your change. Where it is helpful is in predicting and responding to how your team’s performance will be impacted during the implementation of your organizational change.

Read More: The Satir Change Model and Why It has Everything to do with Predictive Analytics

 

7. PDSA Cycle

The PDSA Cycle is a continuous process for optimizing and improving your business. The cycle is based on the Work of W. Edward Deming and Walter Shewhart. The approach is sometimes called the Deming Wheel or Deming Cycle.

The cycle is meant to work in a loop where you repeat the four steps:

  • Plan - Recognize what needs to change and make a plan.
  • Do - Test out your idea on a small-scale.
  • Study - Analyze your results and determine what worked and what didn’t.
  • Act - Take action based on your results and what you learned.

The cycle is a great tool to use for continuous improvement. It can easily fit into any or every part of your overall change management plan. But you’ll probably need a more detailed framework for planning out a large organizational change.

Read More: PDSA Cycle

 

8. ADKAR Model

The Prosci ADKAR change management approach is not a top-down approach. Instead, it focused on what people at all levels of an organization need to do in order for an organizational change to be effective. Prosci founder Jeff Hiatt created the ADKAR model. According to the model, people need to achieve five outcomes:

  • Awareness of the need for change
  • Desire to support the change
  • Knowledge of how to change
  • Ability to demonstrate skills and behaviors
  • Reinforcement to make the change stick

The ADKAR model is a useful tool because it helps you think about and plan for everything that needs to happen on the ground for your organizational change to be successful. It forces you to plan for how to support and create change across all levels of the organization.

Read More: What is the ADKAR Model?

 

9. Bridges’ Transition Model

William Bridges made an important distinction in his model - it wasn’t about change, it was about transition. Bridges believed changes happen abruptly and a person has no control over the matter. A transition, however, is a slower process or journey a person goes through. The model proposes three stages employees go through during a transition:

  • Ending, losing, and letting go - this is when employees will need reassurance about their skills and how they will use them in the future.
  • The neutral zone - this is when you start to deploy a change and uncertainty can lead to resistance from employees. You will need to offer reassurance, communication, and training to guide them.
  • The new beginning - This is when the change is accepted as the new norm. The goal is to keep the momentum going.

The model is similar to the Satir Model or the Kübler-Ross Change Curve because it focuses on managing employees' emotions through an organizational change. Similarly, it has the same drawback in that it does not actually provide a framework for implementing change.

Read More: How to Use Bridges’ Transition Model to Facilitate Change

 

How to Select a Change Management Framework

How-to-Select-a-Change-Management-Framework

So how do you know which change management model will work best for you? A lot depends on the type of organizational change you’re trying to make.

Change Management Models for Cultural Change

If your change is more cultural in nature, you’ll want to focus on a framework that takes employees’ emotional needs into consideration. Kübler-Ross Change Curve, Satir Model, ADKAR, and Bridges’ Transition Model are excellent choices when you’re trying to change your organizational culture.

Change Management Models for Structural Change

Structural changes create both logistical and emotional concerns that need to be managed. In this case, it’s best to pair from the models used for cultural change with a system that included more actionable steps for managing and planning the change-related activities. In this case, consider using Kotter’s Theory, Lewin’s Change Management Model, or the PDSA cycle.

Change Management Models for Procedural Change

Procedural changes require you to evaluate what needs to change and then tweak as you make the change. The McKinsey 7-S Model and PDSA Cycle are good choices because they force you to examine your status quo and make a plan for what you need to update. Kotter’s Theory and Lewin’s Change Management Model are also good fits for procedural changes.

 

Schedule-a-Demo

 

Types of Change Management Tools and Software

Types-of-Change-Management-Tools-and-Software

In addition to a framework, you’ll need change management tools. Successful organizational change requires four types of tools:

  1. Planning and Tracking
  2. Project Management
  3. Communication
  4. Training

Type of Tool

Purpose

Examples

Planning and Tracking

You will need a way to plan out your organizational change. Many companies will use corporate performance management software, or some will use the same software for both planning and project management.

  • Oracle Planning Cloud
  • Anaplan
  • Planful



Project Management

Once you have made a plan, you’ll need a way to track all the activities and tasks needed to execute your plans. Many companies already use a project management system for their daily activities. The same system can be used for your organizational change.

  • Clarity PPM
  • Microsoft Project & Portfolio Management
  • Clarizen One

 

Communication

You will need tools for communicating with your employees and soliciting their feedback while implementing an organizational change.

  • Qualtrics Employee Experience
  • SurveyMonkey
  • Zoho Survey

Training

Most organizational change will require some training to reskill employees. Tools like a learning management system or a digital adoption solution can help.

  • Apty
  • Lessonly
  • TalentLMS

 

A digital adoption platform is one of the most versatile tools when it comes to organizational change. One of the key components of all the change management models is preparing for and overcoming employee resistance. The primary function of a digital adoption platform, like Apty, is to eliminate user roadblocks so they can get used to using new technologies faster.

Apty includes on-screen guidance that shows users where to click and what to do inside any web-based application. A DAP is an essential tool for training during organizational change, but it also has other change management applications. Apty can be used to solicit user feedback. You can also use advanced analytics to examine how users are adapting to the change. Apty can even help with tracking by allowing you to set up and measure your own objectives and key results.

 

Free-Trial

 

Organizational Change: Key Points for Success

Organizational-Change-Key-Points-for-Success

Change doesn’t have to be chaotic as long as you have a good plan. When preparing for an organizational change, remember these three key steps:

  • Determine the type of change you want to implement.
  • Select the best change management models for your organization and type of change.
  • Utilize the appropriate tools for planning, project management, communication, and training.

With the right change management models and tools, you can conquer any change-related challenges.

 

Case-Study

0 Comments
Nathan Altadonna
Written by Nathan Altadonna

A former journalist and product manager, Nathan is a proud tech geek who blogs about digital transformation, employee productivity, and enterprise software. In addition to his work with Apty, Nathan runs his own consulting company, Innate Digital, helping companies develop content and get the most out of their marketing tech stack.

Blogs
Retail...
Digital Transformation in Retail is the need of the hour. The...
24 September 2020 -
How to Use...
On-screen guidance could be the solution, if you’re struggling to...
23 September 2020 -
Remote...
Onboarding plays a crucial role in a new employee’s success &...
22 September 2020 -
Best Sales...
Onboarding new employees always requires an effective combination of...
18 September 2020 -
Employee...
A robust and up-to-date employee training manual is a must-have in...
16 September 2020 -
Product...
Are you sure you are measuring your Product Adoption rate the right...
14 September 2020 -
Product...
Product Tour Software makes creating interactive onboarding...
10 September 2020 -
5 Powerful...
Having a Change Management plan template is necessary to plan change...
8 September 2020 -
Barriers to...
An effective training program will reap huge benefits. Alternatively,...
7 September 2020 -
5 Failproof...
COVID-19 has changed the entire business world to move towards a new...
4 September 2020 -