In business as in life, few things stay the same. Companies must be willing to move with the times and adjust their operations in response to increased competition, technological advances, stakeholder expectations and other pressures. True business change is more than just a rudder shift, however. It's the result of a structured and planned process to make the company more efficient and profitable.
Business change occurs when an organization improves, restructures or transforms a major part of its operations disrupting systems, people and processes.
What Is Change in a Business Context?
In simple terms, business change is the act of moving the company from where it is now to where it wants to be. The change can be relatively small, such as improving the company's billing procedures, to utterly transformative, such as reformulating entire product and service offerings in the light of unexpected competition. Most times though, it references an event that causes major disruption to your daily operations. There are three types of change in a business context: developmental, transitional and transformational change.
Developmental Change Definition
A developmental change occurs when a business wishes to improve a process or procedure, such as updating the payroll system or refocusing its marketing strategy. These changes are small and incremental – you aren't redesigning the entire workflow, but are simply refining it to make it better. Developmental change usually occurs in response to technology upgrades or internal cost drives that aim to improve the efficiency of a work process. As long as you give staff the training they need to implement the changes, there should be minimal upheaval associated with this type of change.
Transitional Change Definition
A transitional change is an act of replacing major processes with new ones, such as automating your manual production line or adopting a new ERP installation. It also includes mergers and acquisitions and other such courses of action. Transitional changes are frequently driven by a desire to remain competitive in the marketplace. The business is not exactly charting unknown waters when executing a transitional change, but it likely will have to reconsider its job functions, processes, culture and relationships to manage the change effectively. Management must proceed cautiously to minimize fear, doubt and insecurity in staff.
Transformational Change Definition
Transformational change is the most disruptive since it requires a fundamental shift in the way a company operates. For example, a company might embark on a completely new mission or restructure the whole product line using new, proprietary operating systems, as Apple did when Steve Jobs took over the company in 1997. Because of the upheaval, these types of changes happen only rarely. Navigating a transformation is complex, requiring significant skill from the management team and outside help from change specialists. When the change process is complete, the organization is unrecognizable from what it was before.
What Is Change Management?
When people talk about business change, what they mean is change management, which is the process used to ensure the changes are smoothly implemented, with as little resistance as possible to yield lasting benefits. A major part of the process is making sure the change is adopted by the people who are affected by it. Without proper buy-in, there's a risk that employees will reject or even sabotage the change project, resulting in wasted time and money. Managing the people-side of the change can help to reduce fear and anxiety and ensure the new goals you are setting are embraced.