The Impact of Organizational Change in Business

The news media frequently reports on new leadership appointments across various organizations. Regardless of how these leaders are chosen, stakeholders can anticipate organizational change. The new leader will bring fresh perspectives, priorities, processes and their own authority to implement change.

This change is often driven by the leader’s vision for a different future. Their motivation plays a crucial role. Are they pushing change merely to differentiate from their predecessor for personal advantage, or to benefit the organization and its stakeholders? Ideally, the latter, since the fundamental responsibility of leadership is to promote the health and welfare of the organization.

What causes organizational change?

If the organization underperforms, leaders need expert diagnosis of the underlying problem, and the appropriate steps to recovery. And before they decide to initiate change, they must carefully evaluate:

• The Need – What are the clear quantitative or qualitative measures that clarify what isn’t working well now?
• The Impact – What stakeholder groups will be affected by the change? Will the consequences be negative or positive for each? And, where it’s negative, how can that be alleviated or minimized?
• The Risks – What’s the potential for failure using a particular approach? What are alternatives?
• The Timing – When is the right time to begin the change process? Is there a sense of urgency among stakeholders? Is the organization in imminent danger of collapse or closure?

The pace

The pace of change can be experienced as a long car ride from point A to point B. Stops and starts may occur to refuel and re-energize, verify the route on GPS, and adjust the destination and arrival time. This method works well when speed isn’t a priority.

However, problems occur when the pace of change resembles a bumpy roller coaster ride where people are left hanging on for dear life and experience deep motion sickness thereafter. This type of rapid or major change can:

• Create chaos among stakeholders, where those impacted don’t know what to do, or where to turn for answers.
• Be too destabilizing, with previously dependable support structures (information, roles, processes) no longer existing or functioning as they have in the past.
• Generate uncertainty, as stakeholders don’t know what to expect in the future.
• Erode trust in the leader and their decision-making process.

These issues negatively impact productivity and can lead to failure. It emphasizes that while change itself isn’t bad, the process of change must be carefully considered.

The process

Introducing and driving change requires a well-thought-out process where leaders…

• Assess the key problem areas, drivers of the issues and complexity of the organization.
• Engage key stakeholders in planning and problem-solving.
• Provide clear and repeated communication on what, why, how, when, and who related to the change. And they must do it again, and again, and again.
• Monitor progress and adjust the process. This is the feedback and adjustment loop.

Overall, the leader must ask all stakeholders to engage with them on a journey where they balance the need to operate differently while building new and stable networks and processes. Leaders must generate trust along the way.

One clear way to build that trust is to demonstrate empathy, particularly to those who may be uncomfortable with change or may be negatively affected by it. This means understanding others’ perspectives and feelings about change, showing concern for them, and taking steps to respond to their needs as much as possible. Stakeholders who become bitter about the process of change are unlikely to perform well. Stakeholders who feel cared for and heard in the process are more likely to excel along the way and find new ways to contribute to the overall outcome.

The pace and process of organizational change significantly influence the result. Attentive leadership throughout the process primes the organization for a favorable outcome.

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