What Is Organizational Change?

Organizational change may seem like a vague term because it can encompass a wide variety of different topics. According to Harvard Business School Online, organizational change refers to “the actions in which a company or business alters a major component of its organization, such as its culture, the underlying technologies or infrastructure it uses to operate, or its internal processes.” In simpler terms, it’s any sort of significant change that a company or business undergoes. There are many different types of organizational change and several examples that businesses and companies may encounter.

When it comes to managing organizational change, leaders must understand how to navigate the process and guide employees through the change curve. Exemplifying the character traits of an authentic leader; being transparent through the process, keeping open and honest communication, and being empathetic as you share how these changes will impact your team members and the work they do every day will help you move your workplace smoothly through all phases of organizational change. Can you expect some resistance from your employees? Of course, change can be hard, no matter how positive it is.

Types of Organizational Change

Let’s break down the different types of organizational change that you can expect to see in the workplace since it can come in several forms. While we’ve shared some of the ways you can manage change in the workplace, first, it’s important to distinguish what some of the different types of change may look like. There are three major types of organizational change, including the following:

  • Developmental Change. Developmental change is a change in the workplace that improves or enhances previously implemented and established processes, systems, strategies, or procedures.
  • Transitional Change. This is a change that falls between the less drastic (developmental) and major (transformational) type of change. It occurs when an organization moves away from its current state to a new state or phases out one way of doing things and replaces it with another. This often happens in the form of mergers, acquisitions, and system automation.
  • Transformational Change. This is a major organizational change that fundamentally changes a business’s structure, values, and company culture and will likely cause a large disruption in their daily operations.
Developmental, Transitional, and Transformational are the 3 most prevalent types of #OrganizationalChange within business. Understanding all three is crucial for an effective #ChangeManagement strategy. @Projections Click To Tweet

There are several different types of changes that can occur in the workplace. In fact, some say there can be as many as twelve different types of organizational change. However, these are three of the most prevalent; most instances of change will fall somewhere on the spectrum. Next, we’ll cover some examples of organizational change to give you a better idea of real-life scenarios that exemplify each.

types of organizational change

Organizational Change Examples

Netflix

Perhaps one of the most successful examples of organizational change within a major company is Netflix and its shift from a business that mailed DVDs to their customers’ doors to a colossal streaming service that creates its own content. You could say they have undergone multiple organizational changes. After the switch to strictly digital streaming services, they decided to make another significant shift in the way they do business. In 2013, their CEO, Reed Hastings, shared his vision detailing a commitment to move from simply streaming existing television and movies to become a leading producer of original content.

Netflix provides a great example of transformational change since it significantly impacted the way Netflix conducts business over the years. As technology transformed the way people watched television and movies, Netflix restructured its business model to a service that dominates the streaming space with over 208 million customers as of 2021.

With over 208 million customers in 2021, @Netflix is a prime example of successful #OrganizationalChange - leaning into a transforming tech industry in order to dominate the streaming space. #ChangeManagement @Projections Click To Tweet

Adobe

Adobe acquired Magento and Marketo, respectively, other eCommerce and marketing companies, in 2018. In addition to the acquisition, they underwent a separate and massive transformation. Named #2 out of 20, (behind Netflix) in The Top Global Companies Leading Strategic Transformations Of 2019, Adobe moved “beyond core in creative & document software into digital experiences, marketing, commerce platforms, and analytics,” while simultaneously transforming their entire business model from packaged software to cloud subscriptions for their customers.

Nokia

An even more recent example of a company currently undergoing major organizational change is Nokia. Pekka Lundmark, the President, and CEO shared the following in a statement, “Our industry is undergoing profound changes. Industrial automation and digitalization are increasing customer demand for high-performance networks, with a trend towards open interfaces, virtualization, and cloud-native software. This will revolutionize how we design, deploy, manage and sell our products and solutions.”

Nokia’s plan will be rolled out in three phases that have just begun as of quarter one of 2021. It has led to the creation of four new business groups that will focus on areas such as mobile network products, tech support, IP networks, and Cloud and Network services. Essentially, Nokia recognizes that they need to meet customer needs and improve cost-efficiency, among other changes, in order to compete in their market and remain relevant in their field.

organizational change examples

Training Your Leaders to Prepare for Change

Change can be difficult for any workplace to navigate, but it doesn’t have to be. Change is a normal part of the lifecycle of every business, and your leaders need to feel educated and empowered with the skills to adapt. While this process doesn’t happen overnight, you can implement leadership training that equips them to navigate and champion all phases of organizational change.

If you feel ill-prepared to handle upcoming changes in your workplace, no matter how minor, we’d love to help. Projections, along with our partners at A Better Leader, specialize in custom leadership development with resources that help your team to provide and develop skills that matter.

About the Author Walter Orechwa

Walter is Projections’ CEO and the founder of UnionProof & A Better Leader. As the creator of Union Proof Certification, Walter provides expert advice, highly effective employee communication resources and ongoing learning opportunities for Human Resources and Labor Relations professionals.