How to Navigate Transformational Change at Your Organization

Transformational change is often met with a groan, but it doesn’t have to be. Businesses undergo transformational change in order to sustain their operations or capitalize on an opportunity. When carried out successfully, the company and employees alike stand to benefit; when botched, the experience can be vexingly unforgettable for all involved.

Companies undertake changes all the time to compete, so what constitutes transformational change and why is it so necessary?

What is Transformational Change?

Transformational change is organizational change that occurs in response to, or in expectation of, significant changes to an organization’s environment or technology (Cummings and Worley). Transformational change completely reshapes an organization, as it revises its business strategy, modifies internal structures and processes, and evolves its culture to support the new direction.

Why Do Companies Undergo Transformational Change?

Transformational change is often disruptive, sudden and dramatic, and can be caused by either external or internal factors. Companies typically only undergo such a radical pivot to remain relevant and profitable in the face of a major threat or challenge to their position in the marketplace. Not surprisingly, change of this magnitude can bring about feelings of fear, uncertainty, and doubt, amongst the workforce and must be managed carefully in order to be successful.

Examples of Transformational Change

Transformational change is large-scale and disruptive. Here are some examples of transformational change:

• Changing from a B2B business model to a B2C business model
• Changing delivery modality from brick and mortar retail storefront to e-commerce
• Sunsetting an existing product to invest resources into new product development
• Changing culture such as that required due to public lawsuit or scandal
• Reorganizing company structure, changing the makeup of management, teams and workflow
• Changing centralized company software (ex: ERP) or other changes in technology that require drastic changes in processes and/or structure
• Changing strategy as a result of a merger or acquisition

Transformational Change Process

According to Beckhard and Harris, there are five sequential steps that an organization needs to take to manage transformational change:

Internal Organizational Analysis

Assess the organization’s attitude towards change, identify employees who might be resistant, and identify external forces that might impede the change process.

Identify the Need for Change

Organization leaders must agree that the change is necessary for the organization’s survival, be able to articulate where they want the organization to go and why, and how the change will bring the organization closer to the desired end-state. Leaders must also acknowledge the risks associated with doing nothing. The answers to these questions will form the basis of the messaging that leaders will utilize in communicating with the workforce.

Conduct a Gap Analysis

Leaders must be clear on the gap between current and future state and be able to articulate the steps necessary to move from current to future state.

Action Plan

In this stage, leaders identify the key players in the change process, detail the responsibilities of those who will execute the change, and pinpoint who will be most affected by the change.

Manage the Transition

Change leaders are responsible for carrying out and sustaining the change through ongoing monitoring and continuous improvement. Transformational change efforts fail when the change is not sustained; it is critical that leaders stay present and visible during the change itself in order to ensure the change is sustained.

Obstacles to Transformational Change

Organizations change when people change, so managing the people-side of change is critical to ensuring a change initiative’s success. People typically resist change for five reasons:

• Lack of awareness about the reason for the change
• Change in job role
• Fear of the unknown
• Lack of support from or trust in leaders
• Exclusion from change-related decisions

Change consultants have the knowledge and tools necessary to facilitate organizational change by increasing workforce adoption of new strategies, tools, and processes.

Prosci, a global organization focused on change management, offers 10 tactics to manage resistance to change:

Actively listen to understand objections

It’s common for busy managers to get so focused on what needs to be done that they miss the step of listening to their team’s objections. People managers are reminded to slow down to understand their team members’ concerns.

Communicate the “what”, empower employees with the “how”

Focus on what needs to be accomplished and empower the team to offer input as to how the change is accomplished.

Remove obstacles

By actively listening to understand peoples’ objections, people managers gain insight into the real or perceived barriers that their team faces and can more easily remove them.

Communicate clear choices and consequences

When the team leader is clear that the change is going to take place no matter what, they can more effectively communicate to their team about the consequences of not participating in the change. It’s important for these messages to be delivered in a straightforward manner so there is no confusion about the direction the organization is moving in.

Create hope

People managers who are effective at managing transformational change are those who are able to help their team envision the future state clearly. What’s on the other side of the change? How will the team member’s professional life be enhanced following the change?

Illustrate the benefits

Provide examples of other organizations that have undergone similar changes and bring evidence of the improvements they have experienced as a result of the change.

Make a personal appeal

People leaders can leverage the personal relationships they have developed with team members to bring their team along, relying on the trust and respect their team has for its leader.

Convert the strongest resistors

People managers who can demonstrate the benefits of the change to the strongest dissenters, flipping them to supporters in the process, stand to gain a change champion.

Demonstrate consequences

As a last resort, and only after diligently consulting with HR and legal, a people manager may find they need to demonstrate consequences. However, this approach is a last resort as it can have significant negative consequences for the organization long-term.

Provide incentives

In this approach, employees are offered bonuses, paid time off, and other incentives as rewards for adopting the change. However, this tactic does not always work and should be reserved for extraordinary circumstances only.

How to Accelerate Transformational Change in Your Organization

Transformational change can be long-lived and painful, but it doesn’t have to be. Accelerate the change process in your organization by doing the following:

Create a change management office (CMO)

Just as many companies have a project management office (PMO), companies that anticipate undergoing transformative change establish a change management office (CMO). A company’s CMO ensures that the right resources and methods are deployed to ensure success, laying the groundwork for the workforce’s aptitude to handle change over the long-term.

Build a clear strategy

Develop a clear strategy for where the transformational change will take the organization, then reinforce the rationale for the change on an ongoing basis. The strategy must be brought to life through people; accordingly, when people are involved in discussions surrounding the change process, they are more likely to buy-in.

Gain strategic alignment

Transformational change, by its very nature, is both deep and wide. A thorough understanding of the change at the executive level is not enough to bring about the necessary transformation. Managers at all levels must understand the reason for the change and the particulars of what is being asked of them and their teams in order to successfully deliver on expectations.

Provide skill-building opportunities

Employees tend to fear change due to job security concerns or anxiety about their ability to perform their job when the change occurs. Companies accelerate the pace of change when they provide ample skill-building opportunities for their employees before the change is rolled out.

Companies that are serious about maintaining their competitive advantage will inevitably undergo transformational change at some point. Rather than leaving the experience up to chance, or piling the change management tasks onto existing staff, hire a professional.

If you need help navigating transformational change, one of our Expert Partners would love to speak with you. Contact info@openeye.email for more information!