A complete guide to organizational change management

Change is an integral part of growth, both in the context of an organization and at an individual level. Small, incremental changes are easy to implement and often pass off unnoticed. But large-scale changes require advance planning, a concrete strategy, and seamless implementation. That's what organizational change management is all about.

What is change management?

Change management is a set of methods and manners that guides organizational change from the point of conception to delivery. It involves planning, implementing, and strengthening changes within an organization.

47% of organizations that integrate change management are more likely to meet their objectives than those that do not. The process includes executing and integrating new technology, adjusting processes, and shifting hierarchies.

What is organizational change management?

Organizational change management (OCM) comprises the human component of organizational change and involves a people-focused framework that guarantees favorable outcomes. Decision-makers in the organization must ensure that employees feel at ease during the transition.

The process of organizational change can be gradual or discontinuous. Incremental change is typically driven internally and is more akin to an organically evolved form of change. A discontinuous change, on the other hand, is a disruptive kind of change that is frequently unplanned and driven by arbitrary forces.

The goal of organizational change management is to reduce the potential negative effects of any broad, structural changes made to the organization. The process focuses on both macro and micro levels to mitigate risk and make the most out of the change.

What causes organizational change?

It is difficult to list every factor that makes organizational change necessary, as many reasons necessitate such changes. Some common causes of organizational change include:

• The arrival of new leadership at the top of an organization or within its branches or departments

• Shifts within the organizational team layout

Another significant cause of organizational change is adopting new operating models. These models bring newer technology, process innovations, or improvements to existing business models.

Change in the organization is sometimes also fueled by external factors like:

• Drastic fluctuations in market conditions

• Overhaul of existing technologies and introduction of new systems

• The entry of new competitors

• Socio-political and economic developments in target markets or operating regions

• Changes in regulations

• Adjustments in customer needs

Types of organizational change

Understanding the different types of organizational change helps you prepare appropriate strategies for each scenario. Organizations typically encounter three distinct types: developmental, transitional, and transformational change.

Developmental change

Developmental change focuses on improving existing processes, skills, or performance without fundamentally altering how your organization operates. This type of change builds upon current capabilities through incremental enhancements.

Common examples include:

• Refining customer service protocols

• Upgrading employee training programs

• Implementing performance improvement initiatives

• Adopting new project management techniques

• Enhancing existing communication workflows

These changes strengthen what already works rather than replacing it entirely.

Transitional change

Transitional change involves moving from your current state to a defined new state through a managed process. This type requires dismantling old methods while simultaneously implementing new ones.

Examples include:

• Migrating from legacy software systems to modern platforms

• Reorganizing departmental structures

• Implementing new compliance requirements

• Adopting a new enterprise resource planning system

• Shifting from traditional office work to hybrid models

These changes have clear endpoints and measurable milestones.

Transformational change

Transformational change represents the most extensive type of organizational shift. It fundamentally redefines your organization's strategy, culture, performance, and operations simultaneously.

Examples include:

• Complete business model pivots or radical shifts in market positioning

• Mergers and acquisitions that create entirely new organizational identities

• Merging product lines

• Adopting multichannel approaches to sales and service

• Expanding physical operations to new regions

These changes require significant investment in time, resources, and employee engagement.

Why is change management important?

Changes in an organization are inevitable. Embracing it is paramount to establish a sustainable business model. Let us look at this and some of the reasons that necessitate a change management strategy:

• Market competition: Market competition and growth opportunities are the main reasons that necessitate a change management plan. Most markets are volatile. But with a pre-determined strategy, you can respond to changing market conditions with greater agility.

• Adaptability strengthening: Optimize your responses to new opportunities and risks with change management strategies. Changes range from legal and regulatory matters like GDPR to customer preferences (like online shopping) and technological changes. Equipped with this knowledge, you can set up action plans for improving adaptability.

• Technological evolution: The Digital Age brings out innovations every second and every hour. Teams need to stay up to date on these issues. Consumers and colleagues from other departments might find that their products are no longer compatible with new software or hardware. In such conditions, IT teams need to be able to reach the root of the problem and fix it. They can do so only by implementing a proper change management strategy.

• Crisis response: Stay ready for crises with a comprehensive strategy. Such strategies are often able to mitigate the harm that unprecedented events may have caused otherwise.

Steps in the organizational change management process

Implementing a structured approach ensures your organization navigates transitions effectively. The following steps provide a practical framework for executing organizational change management:

• Define the change and its scope: Clearly articulate what will change, why it matters, and which parts of your organization will be affected. This clarity helps stakeholders understand the change's purpose and boundaries.

• Build your change management team: Assemble a cross-functional team with representatives from affected departments. Include change champions who can advocate for the initiative and address concerns from their respective areas.

• Develop a comprehensive change plan: Create a detailed roadmap that outlines timelines, milestones, resource requirements, and success metrics. Your plan should address both technical implementation and human factors.

• Assess organizational readiness: Evaluate your organization's capacity for change by examining current workload, past change experiences, and cultural factors. This assessment reveals potential obstacles before they become problems.

• Communicate consistently and transparently: Establish multiple communication channels to keep stakeholders informed throughout the process. Address concerns promptly and provide regular updates on progress and setbacks.

• Provide training and support: Equip your employees with the knowledge and skills they need to succeed in the new environment. Offer ongoing support through documentation, help desks, and peer mentoring.

• Implement changes in phases: Roll out changes incrementally when possible to minimize disruption and allow for adjustments based on early feedback. Phased implementation reduces risk and builds confidence.

• Monitor progress and gather feedback: Track key performance indicators and solicit input from employees and stakeholders. Use this data to identify issues early and make necessary adjustments.

• Reinforce and sustain the change: Celebrate successes, recognize contributors, and integrate new practices into standard operations. Ongoing reinforcement prevents regression to old habits.

What are the benefits of organizational change management?

Organizations that implement structured change management approaches experience improvements across multiple dimensions:

• Increased project success rates: Structured change management improves the likelihood of meeting project objectives and timelines. Organizations with mature change management practices report higher initiative success rates than those without formal approaches.

• Enhanced employee adoption and engagement: 83% of workers suffering from change fatigue say their employer has not provided enough tools or resources to help them adapt. Proper change management reduces resistance and accelerates employee acceptance of new systems and processes.

• Reduced implementation costs and risks: Anticipating challenges and planning mitigation strategies minimizes expensive delays and rework. You avoid costly mistakes by testing changes in controlled environments before full deployment.

• Improved organizational agility: Building change management capabilities creates a more adaptable workforce. Your organization responds faster to market shifts and competitive pressures when change becomes part of your culture.

• Better return on technology investments: New systems and tools deliver value only when employees use them effectively. Change management ensures your technology investments generate the intended productivity gains and efficiency improvements.

• Strengthened organizational culture: Successfully managing change builds trust between leadership and employees. Your team develops confidence in leadership's ability to guide the organization through transitions.

Best practices of organizational change management

Planning out an OCM strategy can be challenging. However, you can make use of the following sure-fire practices to help you along the way:

• Assess and understand your company's risk tolerance and formulate your plans accordingly. When it comes to OCM, there is no one-for-all solution. Understand your company's culture, regulatory requirements, and other key aspects. Integrate these elements into your chosen OCM strategy.

• Keep pace with increasing employee and customer demands by utilizing automation and AI technology. You can propel the management process using data-driven insights from generative AI systems. Repetitive manual processes prone to human errors can also be mitigated by using automation.

• Keep collaboration at the forefront by communicating your goals with your team and other stakeholders. Through seamless and unified comms lines, you can easily avoid the repetition of tasks and other redundancies.

• Reconfigure your Change Advisory Board (CAB) model to suit your business needs. The CAB comprises top members who assess, approve, and monitor organizational changes. You cannot be bogged down with slow and bureaucratic CAB processes.

• Make it so that asking for CAB approvals is necessary for only the riskiest changes. Use OCM tools to make your CAB virtual and real time. This allows you to avoid in-person meetings with long wait times.

• Pick up familiar tools and applications that your development team is comfortable with and integrate these into the OCM tool of your choice.

Organizational change management in ITIL and ITSM

Successful change is an integral part of Information Technology. The Information Technology Infrastructure Library (ITIL) is a compilation of best practices. It helps companies deal with issues in IT service management.

IT service management (ITSM), aided by ITIL, is connected to OCM. It involves planning, producing, supplying, and managing the lifecycles of IT services.

When applied in conjunction with ITSM, OCM plays an important role in handling the human factors involved in implementing IT service management practices.

OCM objectives can be aligned with ITSM initiatives to allow for optimized delivery, enhanced user satisfaction, and technological adaptation. This synergy ensures changes are technically sound and embraced by employees. The result is a more agile and responsive organizational structure.

Organizational change management vs. change management: What's the difference?

While the terms are often used interchangeably, they address different scopes and focuses within the change process.

Change management typically refers to the technical and process-oriented aspects of implementing specific changes. This includes project management activities, technical configurations, and procedural updates. Change management often focuses on the mechanics of what changes and how those changes are executed.

Organizational change management takes a broader, people-centered approach. OCM addresses the human side of change by focusing on how individuals and teams experience and adapt to transitions. This discipline includes communication strategies, training programs, and stakeholder engagement. These cultural considerations determine if changes are successfully adopted organization-wide.

Examples of organizational change

The Society for HR Management lists changes in processes, changes in authority, and company restructuring as some of the most common organizational changes. That said, let us take a look at some examples.

Digital transformations and newer processes and programs

• OCM programs are implemented when businesses adopt new technology. Examples include cloud migration or installing new CRM systems.

• An instance of such a change would be introducing a digital signature requirement in all company documents and tabs.

New leadership

• A failing company often leads to disagreements among senior management. As situations become desperate, changing leadership positions often helps. New CEOs or managers can implement fresh ideas and disrupt existing structures.

• Recently, the social platform X (previously Twitter) has seen major leadership changes led by Elon Musk. A complete revamp of the principles of the platform followed suit, and the platform was even renamed as 'X'.

Shuffling of departments or units

• Businesses reorganize their units to increase profits and other benefits. For instance, a large company can put its marketing department in closer alignment with its sales division for better customer interaction. Restructuring may also occur when businesses deal with legislative changes that alter the course of corporate processes.

What are the common challenges in organizational change management and how to overcome them?

Organizations implementing change management face predictable challenges that can derail even well-planned initiatives:

Employee resistance and skepticism: Resistance often stems from fear of the unknown, concerns about job security, or skepticism about the change's necessity. Overcome this by involving employees early in the planning process, clearly communicating the reasons for change, and demonstrating how the transformation benefits them personally. Create forums where employees can voice concerns and receive honest answers.

Insufficient leadership support: Changes fail when leaders don't actively champion initiatives or provide necessary resources. Without visible executive commitment, employees perceive changes as unimportant or temporary. Overcome this by getting the leadership on board before launching initiatives, ensuring they understand their role in modeling desired behaviors, and establishing accountability mechanisms that keep executives engaged throughout implementation.

Lack of resources: Changes fail when organizations underestimate the time, budget, and personnel required. Overcome this by conducting thorough resource assessments during planning, building contingency reserves, and prioritizing initiatives to avoid spreading resources too thin across multiple concurrent changes. Provide adequate training and support systems to help employees succeed.

Change fatigue: Multiple simultaneous changes overwhelm employees and reduce effectiveness. Overcome this by spacing out major initiatives when possible and monitoring employee sentiment to identify signs of burnout.

How Freshservice can support organizational change management

A competent OCM tool can help you curb the negative impacts of change and refine your change rollout efficiency. With Freshservice, you get best-in-class features that help you make the most out of OCM for your organization. Here's what it looks like:

• Project visualization: Visualize the lifecycle of your projects from beginning to end. Perform checks in real time and fulfill the requirements before moving on to the next stage of the development process.

• Automation: Leverage Freshservice's automation features to minimize time spent on repetitive manual jobs.

• CAB remodeling: Make your CAB meetings hassle-free with the help of a virtual calendar that every member of your team can track.

• Change calendar: Schedule your tasks, meetings, and changes for the day and share them with relevant team members.

• CAB portals: Set up portals for the board members to approve or reject changes based on their recommendations.

• Post-implementation improvements: Monitor the changes you have implemented using Freshservice. You can review the post-implementation details to improve the project management and rollout process.

• Employee service: Provide your employees with customer-grade service by combining the aforementioned utilities.

• Unified and shared platform: Manage almost everything from alerts and tickets to workflow and assets, all on a singular unified platform.

• Integration capabilities: Integrate your team's favorite apps into your Freshservice OCM, like MS Teams and Slack, while also availing useful Freshworks features like Freddy AI.