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Research has shown the odds of successfully implementing a large organizational change initiative is between 25% to 35% (Smith, 2002, p.26). This is a terrifying fact that should generate significant concern for every leader. The rather bleak outlook does not diminish the importance of pursuing change when it is appropriate given the business’s competitive landscape. Even smaller-scale changes are fraught with implementation challenges and a propensity for failure. The process of instituting change must be carefully executed by the management team and begin with an understanding of types of change and the desired outcome that fits with the competitive landscape. Understanding the types of change and knowing when best they apply will aid leadership in determining the correct path the business should follow.
Developmental change improves on previously established processes and procedures and does not necessarily have to be of a large-scale (Marshak, 1993, p. 8). While not necessarily being an extensive change, they are the most frequent type of organizational change. Businesses experience these types of changes as incremental improvements in response to a desire to improve efficiencies, address a detected deficiency, or build upon prior success. Because developmental changes are typically incremental and non-disruptive, they have a lower level of resistance within an organization (Marshak, 1993, pp. 8-9). Over time, these smaller changes build and produce positive returns to the company that may compound over time to being a significant value driver. Failing to respond to the need for improvement may have the opposite effect and represent a loss of market share over time.
Frequently, businesses know that they need to make a change in order to remain competitive in their marketplace. How the business operates today needs to be transitioned to a new way that is understood by the leadership of the organization (Marshak, 1993, p. 8). The company is not charting unknown waters in instituting this organizational change. Transitional changes are larger than developmental changes and may be disruptive (Allen, et al., 2007, p. 192). These changes may include mergers and acquisitions or replacing and introducing major new systems and processes. They frequently may impact relationships, job functions, culture, and involve substantial retraining (Marshak, 1993, p. 9). Because of the significance of these types of changes, management must proceed cautiously while not becoming stuck in a cycle of indecision that will lead to lost market opportunity.
Organizations do not frequently undergo transformational change. These types of changes are dramatic and fundamentally alter the organization. This kind of changes brought about when businesses pursue entirely different products or markets, experience radical changes in technology, or new leadership ushers in overhauls to the structure and company culture (Marshak, 1993, p. 8). The company may embark on a new mission, vision, or introduction of new values utilizing a transformational change process. Being this change is the most pronounced, a substantial disruption to the business will occur, and navigating it will require significant skill and expertise on behalf of the management team. When the change process is complete, the prior organization is no longer recognizable.
As leaders understand the significance of the change being undertaken, they may start to consider the resistance factors that will represent significant challenges and could derail the initiative.
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