The corporate world is changing expeditiously: technology and customer trends keep evolving, governments continue to impose new market regulations regularly, and corporations are forced to cope with the unprecedented global crises, such as the ongoing coronavirus (COVID-19) pandemic. Hence, in order to remain competitive in the market, companies must adapt and grab growth opportunities as they arise; otherwise, they are highly likely to be outcompeted by agile competitors. Thus, organizational changes should be a top priority for organizations. Through organizational changes, companies can adapt to the needs of the word as well as meet their organizational goals while addressing the challenges they face in the business world. The core values of organizational change include the following: the change should be developmental, transitional, or transformation to ensure effective or successful organizational change management. Understanding the best practices within organizational change will be crucial for the growth and success of an organization.
Best Practices in Organizational Change
For an organization to be successful, some practices and procedures must be adopted. In particular, organizational change management leaders must find the best practices for their organization and adopt such practices in their organizational change management plans. In this way, the leaders would be able to protect their organization's well-being and contribute to its success. The best practices adopted by an organization in its change management plans depends on several factors, including the type of organizational change employed by the organization. There are three types of organizational change, namely, developmental change, transitional change, and transformation change. For each type of organizational change, organizational change management can put in place a number of best practices to ensure organizational success.
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Developmental Changes
The first type of organizational change is development change. This type of change entails making improvements or corrections to an existing situation or process in an organization in order to make the process more effective. For example, an organization may make changes to its billing system or update its payroll system to be more efficient. With the developmental change, a company does not recreate the entire process or system. Rather, it refines it to make the process or system better. Organizations make these developmental changes to improve the effectiveness of their organizational processes and make themselves more competitive in the market. By making improvements to the existing systems or processes, an organization can attain a lot of things, including the following: receive greater output and/or quality from the employees and generate more revenue, thus, increasing profits.
Organizational change management can be a very complex process. Thus, when implementing a change in their organization, managers must use best practices. This includes understanding the organization's needs or goals, understanding the organization's culture, and gaining support from the key stakeholders when adopting or implementing the change (Kotter, 2012). One of the best practices is to define the goals of every organizational change management initiative clearly. By setting up clear goals, organizational managers and their subordinates will have something to refer to when implementing or evaluating the organizational change.
The second best practice is identifying the needs of the organization. As stated earlier, a developmental change involves making improvements to a process or system. For instance, an organization can decide to improve its existing information system to make the system more effective. In order to facilitate the change, the organization ought to first determine its organizational needs and the gaps in the existing information system. In the context of the information system, this best practice will help the organization know the areas in the information system that need improvements. This information assists with the best practice of understanding the organization's needs. By understanding the needs of the organization and with the proper information, an organization will be able to prioritize and improve processes rather than wasting efforts on systems or processes that are less efficient or successful. This best practice is often referred to as capturing tribal or functional knowledge (Allen, 2013). This best practice primarily focuses on documenting the results and processes used in each organizational change management process for others to use. According to Allen (2013), in this way, the organization would be able to adopt the change process, build on it, and spread it to different processes in the organization. The leaders implementing the change ought to address or prevent any obstacle that occurs during the change management process in order to ensure continuous improvement works.
Another best practice is communicating the vision and engaging employees in the improvement process. The process of adopting or implementing organizational changes is often associated with several challenges. According to Wang et al. (2019), one of the main challenges that managers face is resistance to change. Some stakeholders resist organizational changes due to several reasons. Some of the reasons for resistance to change include fear of job loss, poor communication and engagement, lack of trust, and poor timing, among many other reasons.
With regard to the fear of job loss, Kotter (2012) outlines some of the best practices that managers can use to combat this type of fear in his 8-step change model. These best practices include communicating the change vision to the employees and empowering them to act. By communicating the change vision and engaging them, employees will feel they are part of the change momentum. This will, in turn, bring a deeper connection to the employees that they can hopefully share with other employees. Engaging employees in the change management process involves welcoming the opinions or suggestions given by employees. In this way, managers will be able to keep the workforce involved and be able to increase adaptation of the process improvement amongst the staff.
Another best practice is recognizing and rewarding small wins. Developmental changes are meant to be continuous, and thus, when facilitating such changes, it is vital to recognize and reward small wins and remain positive during the changes. Through this, managers would be able to ensure the team involved in the change management process is engaged. In addition, managers would be able to maintain the positive morale or culture of the organization. Thus, when implementing developmental changes, managers should use the best practices outlined by Kotter in his 8-step change model. These best practices include: “(I) create urgency, (II) form a powerful coalition, (III) create a vision for change, (IV) communicate the vision, (V) remove obstacles, (VI) create short-term wins, (VII) build on the change, and (VIII) anchor the changes in corporate culture” (Kotter, 2012). By using these best practices, managers would be able to implement organizational changes successfully.
Transitional Changes
The second type of organizational change is transitional change. This type of change entails replacing an existing organizational process or system with a new one. According to Rodda et al. (2017), organizations usually implement transitional changes when solving a problem or acquiring or automating a new system or process. An example of a transitional change is replacing a manual production process with an automated one. The change requires the manufacturing plant or the company to lay down the old procedure and implement the new method. Other examples of transitional changes include manufacturing new or innovative products and providing new services to customers. An organization can implement a transitional change for various reasons, such as to generate more revenue or eliminate waste.
Just like when implementing development changes, employees may be on high alert when implementing transitional changes. This is because the employees may fear that the change may lead to job losses and change in organizational processes. As such, the employees may resist the change. As with developmental changes, it is vital to communicate the change vision and engage employees in the improvement process. Most importantly, it is vital to establish a sense of urgency around the need for change. This may help the managers garner support from senior managers, employees, and other key stakeholders. Kotter (2012) explains developing a sense of urgency as making the company's management "buy into" the change. To achieve this, the individuals facilitating the change must identify opportunities that should or could be exploited, provide reasons why these opportunities should be exploited, and request support from key stakeholders.
Other than the 8-step change model developed by Kotter, one can also use the awareness, desire, knowledge, ability, and reinforcement (ADKAR) change management model to successfully implement a transitional change. Jeff Hiatt developed this change model. ADKAR stands for “awareness of the need for change, desire to support the change, knowledge of how to change, ability to demonstrate skills and behaviors, and reinforcement to make the change stick” (Goyal & Patwardhan, 2018). The model outlines some of the best practices that can be used to implement organizational changes, such as understanding the need for change and gaining support from key stakeholders. The power of the ADKAR model is that it focuses on the need for change. In particular, it focuses on identifying the potential threats associated with the old system or methods and why the proposed change should be exploited. Another best practice outlined by the model is the need to seek support when implementing the change. This includes seeking the support of senior managers, employees, and other key stakeholders.
The ADKAR model is important to the success of mergers and changes that involve replacing inefficient processes or systems. This is because it can be used to identify the root cause of the merger or failed system. This way, the change management will be able to identify the necessary changes to ensure the success of the merger or organizational processes. The corporate world is changing at a fast pace. In order to adapt to this change, organizations must implement transitional changes to keep up with the evolving technologies, changing customer trends, and new market regulations in addition to global crises, such as the COVID-19 pandemic. With the added pressure of COVID-19, organizations should implement transitional changes and align their employees with these changes to ensure organizational success in the midst of this crisis. Employees should support these changes and adapt, as well. To build a sense of normalcy when implementing changes amid the ongoing COVID-19 pandemic, organizations should build teams to drive organizational changes. In particular, the teams should facilitate the following: internal communications, training, and development. In other words, the team should be the face of the transition, facilitating communication between team members, setting expectations, and realizing wins. They will also be responsible for identifying and removing obstacles in order to ensure the success of the transition.
Transformational Changes
The third type of organizational change is transformational change. This type of organizational change entails shifting the way an organization operates and comprises developmental and transitional changes. For example, a business can decide to introduce new technologies, conduct an overhaul of its products or services, or restructure its business strategy. The change may even lead to a change in the organization's culture.
One of the best practices often used when implementing transformational changes is empowering employees for broad-based action. Just like developmental and transitional changes, implementing a transformational change can be a complex process. For this reason, when implementing transformational changes, managers must use best practices, such as empowering employees, for broad-based action. Leaders should empower their employees to ensure that they have the right tools to perform when facilitating the implementation of an organizational change. According to Kotter (2012), empowered employees tend to align themselves with their organizational goals as well as put their organization in a winning position. One of the ways in which managers can empower employees is to give proper training. According to Voegtlin et al. (2015), organizations can improve employees' work performance and participation through training. It better prepares the workforce for their assignments and makes employees confident in performing. In addition, empowering employees can bring out the creativity of employees (Dong et al., 2015). It can also increase their motivation. Through this, the employees may help move the company's change vision by ensuring the change is implemented successfully (Kotter, 2012). Thus, managers should empower their employees for broad-based actions when implementing organizational changes.
Case Studies in Organizational Change
There are a number of real-world cases that demonstrate organizational-level change. Although best practices are often used to implement organizational changes, the changes are not always successful. As such, there are both successful change cases and cases where change was not successful. In this paper, three real-world cases will be discussed.
Microsoft
In the late 1980s, Microsoft was a leader in the software industry. However, the company lost its holding due to competition from agile companies. The hostile and changing corporate environment made it harder for Microsoft to gain a competitive edge in the market (Nadella & Euchner, 2018). As a result, the company missed critical opportunities, such as the explosion of the mobile industry. In addition, the culture of Microsoft devolved from innovative and performance-based to bureaucratic and internecine. To turn around things, Microsoft needed an organizational change. This change was brought about by the new Chief Executive Officer (CEO) Satya Nadella when he took over in 2014. Nadella quickly transformed the company. Nadella emphasized on the need for cloud and mobile-based foundation and the need for innovation. To achieve this, he engaged all of his employees and empowered them. The best practice that Nadella used, in this case, is communicating the change vision and empowering employees. He also instituted a "partner-positive" outlook, developing an acquisition strategy to expand their reach to a wide range of customers. To achieve
In addition, Nadella addressed company morale by replacing the company's stack ranking system with the Microsoft hackathon. In this way, the CEO brought together employees from different departments to work on new projects. Following these organizational changes, Microsoft made a remarkable recovery. Within five years after Nadella was appointed as CEO, Microsoft reaches a $1 trillion valuation. Now, Microsoft is one of the wealthiest publicly traded companies across the globe.
Nadella's story with Microsoft is similar to that of Judah in 2 Kings. In 2 Kings, we are informed how King Hezekiah helped the people of Judah while on their way into exile. After replacing King Hoshea, King Hezekiah changes behavior and leads the people of Judah into restoration. Similarly, Nadella transformed Microsoft by changing the previous behaviors of the company. To achieve this, Nadella used several best practices, which include communicating the change vision, engaging employees, empowering employees, and pushing a cohesive work partnership. According to Grenny (2013), Nadella invested in his employees and strategies that help abilities to successfully implement the organizational changes. Nadella embraced best practices to ensure the growth and success of Microsoft.
Google/Alphabet
Google is an Internet giant and a leader in information technology (IT). Its parent company is Alphabet Inc. Alphabet was created in 2015 through a restructuring of Google. Alphabet also became the parent company of several former Google subsidiaries. In the early 2000s, Google grew so fast such that it lost focus on some of its projects. Larry Page, the co-founder of Google, recognized the need to restructure Google because Google's research and development teams were exploring a diverse group of projects while still inundated with focusing on Google. To ensure all projects are implemented successfully, a decision was made to restructure the company. In this way, Google was brought under a new corporate structure, Alphabet. Thus, Alphabet became the parent company of Google. With its own CEO's and organizational goals, Alphabet was created to handle projects that are not directly related to Google.
The decision to restructure Google followed a few best practices, including showing the need for change or the urgency for change and communicating change vision. With regard to the needs for change, Google acknowledged that it would be difficult to maintain every project under Goggle. Google failed to manage some projects, and this created the urgency for change. As such, the company segmented into Alphabet. Following this segmentation, the company saw a number of successes as well as a number of failures. Larry Page and Sergey Brin, who are the co-founders of Google, stepped down from Alphabet. Also, some subsidiaries failed while others were absorbed back by Google. Another failure is that Alphabet turned into a more conventional company after losing its hold over the market. Though mistakes were made to restructure Google, Alphabet is still successful in some projects. The company is using the best practices outlined in the ADKAR model to ensure its subsidiaries are managed successfully in the future. By using the current best practices, the Alphabet has the opportunity to successfully implement organizational changes in the future.
America Online-Time Warner Merger
In the early late 2000s, American Online Merged with Time Warner. This merger, which is valued at $350b, is considered to be the largest merger in the United States. As we all know, a merger can either succeed or fail, and when it goes well, companies are praised for their abilities to successfully merge and increase their revenues and profits. The merger of America Online and Time Warner had all the makings to make it a great merger. This is because Warner had already merged with other companies successfully, such as Time. As such, the company had knowledge of how to successfully merge two companies. However, when America Online merged with Time Werner, the merger did not succeed as expected. A wide range of underlining issues caused this merger to fail. One of the issues is timing. Following the dotcom bubble in the early 2000s, America online reduced its value, and as a result, the company lost $90b (Robichaux, 2016). The two companies merged because America Online wanted to expand its offerings to include a broadband connection. However, the company failed to capitalize on this service because the market was moving away from dial-up services.
America Online-Time Werner merger failed because the companies did not use the current best practices. First, the management of the two companies failed to define a united vision and communicate it early. Since the two companies had different operations, cultures, and goals, there was a need to define a united vision and communicate the vision to all the key stakeholders. However, the companies only focused on paperwork and failed to do this. As a result, the employees failed to adjust accordingly.
Conclusion
Organizational changes ought to be accompanied by best practices. This paper has discussed the current best practices that can be used when implementing organizational changes. Following these best practices will make the implementation of a change as smooth as possible. With many organizations making changes due to evolving technologies, changing customer needs, and global crises, it is vital to use current best practices when implementing any changes. By successfully managing their organizational changes, companies will be able to adapt to the changing business world.
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