It was 2001 and my first hands-on introduction to change management. I had never before led a change initiative, despite being schooled a few years earlier on the latest theories of change management at an ivy league business school. Rethinking change management was certainly not on my mind. The project had a solid budget; most of the senior management were nodding their heads; and the CEO was fully behind it. I brought in a team of excellent consultants to train our people on a world class sales methodology. Several million dollars of incremental profitable sales growth was forecasted. We even implemented a CRM software system to support the new approach. All of the tools were there. What could go wrong?
Despite this, many managers and employees didn’t see the need for this change. A few were outright hostile, while the majority were indifferent. Sensing this, I resorted to the “burning platform” approach. I spoke to many groups and indicated if the initiative was not adopted, the company could fall behind their competitors. A lot of moral suasion was applied by the CEO on the executive team, and eventually the sales organization complied. However, as timing would have it, the CEO shortly thereafter left the company and the executive team let the initiative slide into obscurity. The scar tissue, and lessons learnt were formative at the start of my career in transformational change. Little did I know that 20 years later, I would be writing Rethinking Change Management.
The Ongoing Challenge With Change Management
Over the years, I have worked both as an executive leading change, and as a consultant implementing it in organizations. What I’ve observed is many organizations muddle through a jungle of academic change models and consulting processes. This is done with the hope that what is chosen, will be successful. Additionally, change management has also become a catch-phrase for practically any training course, program or initiative that a company launches.
Most models of change management are presented through a project management lens. This results in the focus being primarily on technical development and implementation. Little attention is paid to what needs to be done for the initiative to be successful post implementation. Well known clichés such as “ensure executive agreement” or “engage employees” provide no direction on how to achieve these goals.
Rethinking Change Management – The 3T Model of Organizational Change
If we consider organizational change from the perspective of how it impacts a company, there are 3 types, each with their own unique focus and requirements. I have developed what I call the 3T Model of Organizational Change, which categorize the different types of change as follows:
The 3 Types of Change
The first type, Transactional Change occurs when a policy change is made within a company or division, and no changes are made to the organizational structure, processes, or tools. Examples of this can range from introducing a new pricing policy; focusing on new markets segments; moving away from unprofitable customers; or implementing new performance targets. These types of changes can be met with significant resistance and perceived as not necessary or indiscriminate. It is crucial that the change agent has a solid business case built on facts and experience for their decision. Strong support from upper management is critical, so the initiative is given time to be accepted and produce results.
The next type, Transformational Change is by far the most recognizable type that companies engage in. This type of change occurs when new processes and tools are introduced to an organization in order to either increase revenue, decrease costs, or increase efficiencies. Examples include:
- Digital Transformation, where ERP or CRM systems are implemented.
- Sales Force Transformation where an organization retools its sales organization or implements a new selling culture.
- Performance Transformations, where a new management system is designed and implemented to optimize production, quality, or service.
In Digital Transformations, employees use the new software as a tool, where their employment performance is not tied to their use of the software. In these instances, workforce adoption is generally not a major issue. When challenges emerge, it is usually due to poor planning, flawed implementation, or insufficient budget.
In Sales Force or Performance Transformations, employees learn new skills and tools. However their employment performance is directly tied to their ability to generate results using them. The introduction of these new approaches usually have a large impact on part or all of a workforce. This also requires significant planning and support pre and post implementation to instill new behaviors. This allows for the transformation to become embedded within the operating culture of the department or company.
The last type, Transitional Change, involves making significant or major alterations to the organizational structure, processes, and policies, effectively transitioning the company to a redefined business model. It is primarily top-down direction and employees have little involvement outside of complying with what is the determined course of action. Corporate restructuring and company mergers are examples of this type of change. Many employees experience high levels of stress out of fear of losing their jobs. Once the transition is over, the workforce adjusts to the new reality.
Rethinking change management through the 3T Model can help you identify the type of organizational change your company is contemplating; the major areas of focus; and some of the necessary requirements for success.
In the next blog, I will explore the most common form of change – Transformational Change. I will discuss the different types of transformations and where they are often implemented in companies.
This article is based on my forthcoming book Rethinking Change Management; How To Implement Transformational Change For Long Term Success, which will be publishing later this year. If you find this article helpful, please share and subscribe to our blog and newsletter. Stay tuned for further details.
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