Organizational change refers to the actions taken by organizations to change aspects such as processes, technology, people, culture, etc. While organizational change is often discussed as a monolith, this could not be further from the truth.
The concept includes many changes and the spectrum ranges from adaptive or incremental change to transformational change. Because these changes lie on a spectrum and vary, so do the organizational change management strategies used to address them. Thus, it’s integral for change managers to understand the different types of organizational change and manage them accordingly to ensure success.
How Does Organizational Change Occur?
All organizations go through change eventually, but not all organizations go through the same kind of change or at the same rate. In fact, most organizations undergo episodic change between periods of improvement and other periods of radical change.
The two main types of organizational change are incremental change and transformational change. Most companies go through both types of change, with the rate of such change increasing through the years.
Incremental or Adaptive Change
This kind of change focuses on improving processes and becoming more efficient and takes place between longer periods of equilibrium. Incremental or adaptive change is distinct from transformational change since it doesn’t alter the organization as a whole.
Unlike incremental change, transformational change takes place during periods of disequilibrium. This kind of change arises because of inertia – the organization is not aligned with the environment around it and must change in order to continue functioning. Transformational change often results in a dramatic change in the basic structure of the organization.
Also read: Change Management in Project Management
4 Types of Organizational Change Management
While all organizations inevitably face change, some are better at anticipating the need for change while others are not as proactive.
Agile companies seek out opportunities and prepare for threats and destabilizing events while other organizations are reactive and only respond when there’s a clear need for change.
Nadler et al. (1995) used incremental vs. transformational change and proactive vs. reactive change to come up with four distinct types of change, which are discussed below. While most change is incremental, organizations can undergo several types of change simultaneously.
Tuning is a type of change that involves coming up with improved procedures and methods, changing processes to reduce costs, introducing new technology, etc. While change isn’t required here, it usually takes place to ensure that the company’s strategy and external environment are in conjunction. Thus, this refers to incremental and proactive change.
Adaptation consists of incremental change, but this is reactive change and occurs because of external demand for change, such as the actions of a competitor or a disruption in the supply chain. Thus, it is an adaptive response that allows organizations to remain competitive in the marketplace. Both tuning and adaptation can involve both major and minor changes, but these remain incremental changes instead of transformational ones.
Reorientation is a transformational change that a company undertakes proactively to ensure effectiveness. It redefines the organization by anticipating future opportunities and problems and making changes accordingly.
Like reorientation, re-creation is a transformational change that completely changes the basic elements of an organization. However, this is a reactive change that results from the original elements breaking down and needing change.
It’s important to note that re-creation is the type of organizational change that can be disorienting and may require more comprehensive change management strategies.
Managing Different Types of Organizational Change
Organizational change management varies depending on the type of change and the locus for change.
Incremental vs. Transformational Organizational Change
While incremental change focuses on improving internal alignment and the organization’s efficiency, transformational change focuses on revamping the organization to fit with the changing environment.
Thus, transformational change is more intense than incremental change and will require organizational change management strategies that deal with overcoming uncertainty and other intense emotions.
To manage incremental change effectively, change managers need to focus on the big picture and understand how the incremental changes fit into this vision. They also need to drive change by convincing other stakeholders to embrace these changes, and then plan, implement, and adjust the change management strategy if necessary.
Managing transformational change consists of the same steps but requires more emphasis on motivating and aligning stakeholders.
Because the change is so drastic, it’s not enough to simply focus on implementation. Strategic planning must be accompanied by change managers and leaders being visionaries and ensuring stakeholder buy-in.
Reactive vs. Proactive Organizational Change
Similarly, reactive change is more intense than proactive change. Failure to transition successfully may threaten the survival of the company, and change may be harder to deal with because of scarce resources and time.
Thus, reactive change will require more comprehensive change management strategies than proactive change to adequately deal with the additional pressure.
The intensity of change is lower in proactive change and incremental change, making it easier to manage.
However, as the intensity of change increases, so does the need for change management. Instead of relying on normal management processes, organizations must deal with issues by appointing change leaders and creating specific processes and roles to aid the transition.
It should also be noted that as the intensity of change increases, the responsibility for directing organizational change falls on more senior management, such as the CEO instead of being delegated to others.
Organizational change management will depend on whether overcoming inertia is an issue that the company is facing.
If this is the case, and there is resistance based on a need to maintain the status quo, change management will begin with a step called “unfreezing.” Unfreezing involves breaking the equilibrium so the organization can move from the current state to the new state.
However, there isn’t always resistance present, and, so, unfreezing doesn’t necessarily have to be the first step. When overcoming inertia isn’t an issue, the first step is freezing and taking stock of the current state of the organization. From there, the organization can move on to rebalancing and unfreezing to move to the new state.
Summary and Conclusion
Organizational change falls into two main categories: adaptive or incremental change and transformational change. However, most changes do not snugly fit into a single category since organizational change is a spectrum.
Depending on whether the change is proactive or reactive, it can fall into four subcategories, i.e., tuning, adaptation, reorientation, and re-creation. Because of the variance in change, it’s important to consider the different types of organizational change and devise organizational change management strategies accordingly. If this is done, change leaders can address specific problems effectively and ensure successful change.