As for individuals, change isn’t easy for businesses. It can bring with it uncertainty, anxiety and risk. But some of the risks can be mitigated with the right approach to change management. Change management experts say that the approach to change management should be tailored to the type and level of change the business is experiencing.

The Field Guide to Consulting and Organisational Development offers a useful breakdown of the different kinds of change organisations may experience. Change could be more transformational or more incremental—though it’s a continuum rather than a dichotomy. A transformational change involves a radical overhaul of a business’s strategy, vision, structure or operations.

Examples might include moving from a top-down, hierarchical structure to a flatter, more decentralised structure; starting a large-scale business process re-engineering exercise; or pivoting to ecommerce from selling via a network of brick-and-mortar stores. Transformational change is difficult to pull off without causing disruption to the business and its people; it’s also a high-risk, high-reward endeavour.

Incremental change is a slower process of making small adjustments to how things are done that doesn’t upend existing processes, business structures or business models. Examples include continuous optimisation of business processes, improving a product along a long-term roadmap, and offering new payment choices. Over time, incremental changes may add up to large changes to the business.

One benefit of the slow and steady approach is easier change management and training because people have time to digest the change. The short-term costs and risks are also lower. On the downside, changing too gradually in a fast-moving world has risks of its own—a company could be outpaced by competitors or get left behind by its customers.

Unplanned versus planned change

Change may also be unplanned—like the need to offer a new product due to a disruption in the supply of your usual product or the loss of a major customer that contributes 50% of company revenues. Or it could be planned, as when your business recognises that it needs to become more digital to meet customer demands or looks to sunset a legacy product and phase in new options.

Tim Creasey of change management experts, Prosci, says that these different types of change cannot be handled in the same way. You can get a handle on the best approach by asking the questions many companies neglect when embarking on change—especially if the changes were not planned for and need to be implemented fast.

Just how far will you need to travel to close the gap between the future state and the current state? And how different is the future state from the current state? The further the gap between the existing and desired state, the more change management you need. When the change is radical, you will need more focus on communication and coaching, executive sponsorship, and employee buy-in.

An added wrinkle is that a change might impact different teams in different ways. Some may face radical changes, while others may see minimal disruption in their roles. Creasey recommends creating a tailored plan that caters for each project by the nature and scale of change as well as for the people impacted by the change.

Mastering change

As we move beyond the initial phase of the pandemic, it’s clear that business-as-usual isn’t coming back. Mastering both incremental and radical change is essential to remain relevant in a world that continues to change at high speed. Companies that know when and how to change radically and when and how to adjust course slowly will have a distinct advantage in the years to come.

References:

https://managementhelp.org/misc/types-of-orgl-change.pdf

https://blog.prosci.com/incremental-vs-radical-change