Change Management versus Transformation

There seems to be confusion as to what constitutes change and transformation, as both terms are similar in meaning and can be used interchangeably. In a management context, change means implementing well-defined initiatives, and focuses on the execution of the approach. Unlike change management, transformation focuses on a portfolio of initiatives, with the intention to reinvent the organisation and discover alternative business models. Due to its unpredictable and experimental nature, transformation entails a higher risk. More importantly, successful change management does not result in overall transformation, hence the difference between both concepts. Change involves executing a defined initiative, whilst transformation looks further ahead and involves strategies which affect the organisation on a more extensive level.

Leaders who possess change management skills are able to launch strategies which create a more sustainable and competitive business model. However, to ensure that overall transformation is a success, leaders have to learn a broader set of leadership capabilities, whilst also prioritising efficiency and profitability over lower-value activities. Leaders are faced with the uncertainty of transformation, and are forced into unchartered waters to discover ways of engineering a successful transformation of the organisation. Transformation is a progressive process of discovery and experimentation. Leaders who can adapt to the transformational climate are those who can stay relevant in their respective industries, and continue changing and transforming their organisation to meet market demands.

Both change management and transformation are crucial to the development of an organisation as competitors are always on the lookout for edges which improve their position within the industry. Although organisations have gradually become more adept at instigating change, they continue to struggle with transformation. If leaders want to improve the latter, they must first establish and understand the difference between both concepts, and apply the correct approach to ensure success. Below are examples of change management and transformation, to put the difference of both concepts into perspective.

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“[…] when a large technology firm integrated specialized engineers into its regional sales teams, there were shifts in roles, client coverage, compensation, goal setting, and teamwork. The change affected hundreds of people. By applying well-known change management principles and tools — such as making the business case, building a coalition of leaders, getting early results, engaging stakeholders, executing with discipline, etc. — the new sales approach was implemented successfully, and is generating improved results.

[…] examples of other companies successfully executing discrete change initiatives, like introducing a new performance management system, shifting from decentralized to centralized marketing support, and utilizing new personal productivity tools. The point is that all of these initiatives were reasonably well-defined.

[…] recently met with the senior leadership team of a large technology company that had been successful because one unique product constituted 90% of its sales. When competitors started developing a less expensive version of the product, it became clear that they could not survive as a one-product firm. As a result, the CEO launched a transformation strategy with the goal of figuring out a more sustainable business model. It included a number of major “must-do” initiatives: get more immediate revenue from the current product, create a leaner support organization, shift from internally-focused to externally-partnered product development, and ramp up the search for acquisitions and adjacencies.

The transformation also called for a new set of cultural principles and a revised performance management approach aligned with these initiatives.” – Ron Ashkenas, Contributor at Forbes

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Benjamin Lee Cheng Han | Benjamin is a student of International Relations at the University of Nottingham, currently exploring unchartered realms in the Public Relations field. Writing is clearly his interest – a decisive contributor to his foray into the public relations industry. To date, he boasts the proud record of having tamed one of the office cats, and drinking expired tea from the pantry.