Organizational change occurs when businesses go through a major transition that impacts company culture, infrastructure, technologies, or internal processes. Many employees feel the effects of organizational change—whether that change involves onboarding new leadership, introducing new tools, or updating your company goals. Learn about the different types of organizational change and how big transitions can impact your team—plus some key strategies to handle change when it occurs.
David Bowie was right—change happens, whether we like it or not. In life and in business, we’re constantly evolving. And sometimes, changes are big enough that their aftershocks can be felt throughout an entire organization.
Organizational change occurs when a business experiences a major transition that affects most or all of its employees. This type of change is far-reaching because it impacts company culture, infrastructure, technologies, or internal processes. In other words, organizational change alters your team’s day-to-day experience. Sometimes these big transitions are meticulously planned out, and other times they happen without any advance notice.
Here are some examples of organizational change:
Changing leadership, like onboarding a new CEO or department head.
Company mergers or acquisitions.
Introducing new technologies, like switching from email to project management software.
Updating your company goals as you grow, like switching from lead generation to upselling.
The terms organizational change and organizational change management often go hand-in-hand. That’s because whenever big transitions occur, it’s important to plan how you’ll guide employees to make sure everyone is set up for success in the new environment. That’s what organizational change management is all about—preparing for and managing any new organizational change.
On the other hand, organizational change by itself just describes the transition—not the process you’ve put in place to manage change. That means whenever you anticipate or experience organizational change, you should also start preparing your change management process to plan how you’ll tackle transitions in stride.Lead through change
Organizational change can be big, small, or somewhere in between—and that’s where the change spectrum comes into play. On one side of the spectrum is incremental change, which represents smaller transitions your company makes over time. On the other side is transformational change, which represents big transitions when your company reinvents existing processes or infrastructure. We’ve outlined the difference between incremental and transformational changes below, but keep in mind that your particular situation may not fall directly into one of these buckets. Rather, you may find yourself somewhere in between.
Incremental changes are smaller transitions your company makes over time. Incremental change often goes hand-in-hand with steady growth and continuous improvement—because as organizations get bigger, old processes, strategies, and resources may not work as well as they did before. Incremental changes have less immediate impact than transformational changes, but they can build up over time. That means it’s still important to guide your team through incremental transitions and make sure everyone still has the support and clarity they need.
Example incremental change: Your company is expanding its brand awareness by producing content across different online channels. As a result, you have more brand assets than you can keep track of—including photography, designs, and videos. To organize everything, you invest in a new digital asset management tool (DAM). While this is necessary for your company to grow and organize work, it can lead to some growing pains—like teaching stakeholders how to use a new tool, migrating content, and creating processes to ensure content is added to the DAM correctly.
Transformational changes are large-scale transitions where your company must completely reinvent existing processes or infrastructure. Instead of slowly adapting over time, your organization makes a large change all at once. When they’re not managed well, transformational changes can create confusion and ambiguity—which in turn can negatively impact team morale and performance. As such, it’s important to create a change management plan to guide your organization or team through bigger transitions.
Example transformational change: Your company only operates within the US right now, but you’ve decided to expand internationally. As a result, you’re going to build a new international office, sales team, and infrastructure to operate overseas.
Organizational change comes in three main forms: strategy changes, process changes, and structural changes. Here’s an overview of each type, with examples.
Strategy changes are changes to your company’s strategic plan, business goals, or vision statement. This type of organizational change affects your individual team goals and how team members should prioritize work.
Example strategy change: As your company grows, your focus may shift from creating new products to refining your existing products. That means your business objectives must also change—from increasing brand awareness and inventory to boosting customer loyalty and satisfaction. For your individual product team, that might mean focusing less on feature creation and more on user testing.
Process changes are changes to how employees do their work. This can include changes to existing processes or the implementation of entirely new workflows. Process changes often have a significant impact on the day-to-day experience of your team.
Example process change: Imagine your company created a new legal review process for all external communications. This has a direct impact on your marketing team because now there’s an additional legal review step in the content creation workflow.
Structural changes are changes to how your organization or team is organized. When done incorrectly, structural changes can create confusion around who’s responsible for what, and who should be looped in when.
Example structural change: Imagine your startup has just created a new human resources team to manage a growing number of new hires. As a result, individual hiring managers are no longer responsible for the onboarding process from start to finish. Due to these changes to your organizational structure, you need to determine which onboarding tasks fall within HR’s purview, and which tasks hiring managers should complete.
Organizational change is like someone doing a cannonball dive into a pool. After the initial impact, waves form and expand outwards, eventually disrupting the entire surface of the pool. Similarly, one change within your organization can cause waves of disruption that affect every employee.
However, a bit of extra planning can help you and your team smoothly navigate a changing work environment. To get you started, here are the three main pitfalls of organizational change—plus how to avoid them.
It’s human nature to feel resistance to change, especially if you don’t know why that change is happening and what the future might hold. That means without effective communication, big transitions can cause a drop in company and employee morale.
This impact is often the hardest to pinpoint but the most important to address. Organizational culture shapes and defines your work environment—and without good culture, your team won’t be motivated and set up for success.
For example, you might encounter a lot of employee resistance while introducing a new HR management tool to your team. People are comfortable with the current software—and even though it isn’t ideal, it can feel easier to stick with what you know than to spend time and energy learning how to use yet another tool. Without proper context, this change could feel like another hurdle in your team’s path and negatively impact morale.
But it’s not realistic to avoid change forever—especially when new processes could help your team avoid tedious work about work and make it easier for them to collaborate. Organizational change might degrade morale when it’s not done right, but with the right processes, you can use change to build an even stronger company culture.
As a manager, you can protect (and even improve) culture during times of change. Here’s how:
Use a change management process. A change process is essential to communicate why change is important, what your team can expect, and how to succeed going forward. For example, at Asana we developed the Asana Way of Change to help teams roll out new tools or technologies at an organizational level. Based on a change management model designed by Dr. John Kotter, the Asana Way of Change includes steps to define your why, establish metrics for success, and celebrate your team’s initial wins.
Establish shared goals. Creating and communicating clear goals helps your team understand why the organizational change is important. Goals help encourage intrinsic motivation and keep your team excited about the future. For example, you could create this SMART goal when transitioning to a new HR management tool: “By the end of Q1, decrease time spent on HR tasks (like requesting and approving time off, managing compensation, and submitting performance reviews) by 50%.”
Practice emotional intelligence. Change is hard, and it’s important to acknowledge that different people deal with change in different ways. Cultivating your emotional intelligence skills helps you understand your own emotions and recognize other people’s emotions accurately—so you can communicate with empathy, build stronger relationships, and effectively manage conflicts. During times of transition, emotional intelligence helps you understand how your team is doing and give them the support they need.
Ask for feedback. Asking for feedback helps in two ways. First, feedback helps you understand your team’s concerns and improve processes and team communication. And second, asking for feedback demonstrates that you value each team member’s input—especially when you take concrete steps to address your team’s concerns. Feedback is especially important during times of organizational change, because your team may encounter more roadblocks or growing pains than usual.
Big transitions can bring a lot of uncertainty. Without clear communication, organizational change can make it hard to know what to prioritize and who’s responsible for what. And due to that ambiguity, your team may not have the guidance and information they need to make good decisions.
Here’s a scenario: Imagine you work on a product development team and your company just created a brand new user research (UXR) team—complete with five freshly-hired researchers. Before, you only tested products to make sure they worked properly. But now you have additional resources to test and improve your products. However, those new resources come with a dose of ambiguity. Do you still drive testing, or is that the UXR team’s responsibility? When should you loop them into the product creation process? Who decides whether a product feature is successful or not? All these questions can make decision-making difficult.
Luckily, this uncertainty can be solved with a few different strategies:
Create a RACI chart for key initiatives. A RACI chart outlines who is responsible, accountable, consulted, and informed for each task, milestone, or deliverable within a project. Creating a RACI chart establishes clear roles and responsibilities and reduces confusion about who should be looped in when. To continue with the example above, you could create a RACI chart to outline stakeholder responsibilities for your product testing process. You can also create ad-hoc RACI charts for especially tricky or complex products that might require a slightly different process.
Connect goals to work. Decision-making is really an act of prioritization—to make a decision, you have to decide if one option is more important than another. And before you can decide what’s important, you need to know how your day-to-day work ladders up into overarching goals. That means creating clear goals (and connecting them to your team’s work) is one of the best ways to help your team make good decisions during times of organizational change. For example, imagine your product development team has a goal to improve user satisfaction by 30% this year. If everyone on the team is aligned to that goal, they can more easily decide to work with the UXR team to optimize existing products instead of creating new ones.
Centralize collaboration in one place. When it comes to decision-making, clarity is key. You need to make sure every team member and stakeholder has access to up-to-date information about each project—because after all, what good are your RACI charts and project objectives if nobody knows where to find them? That’s why centralizing collaboration in one project management tool can ensure your team has the resources and information they need to make good decisions during times of change. For example, Asana lets you share project and task information, so key details are shared where work actually happens. You can also connect work directly to goals, so it’s clear how every task contributes to your overall objectives.
Sometimes organizational change isn’t due to growth, but rather an unforeseen business disruption—like lost revenue, a security breach, or the loss of key employees. Your business performance may be at risk when that type of sudden change happens, especially if you don’t have a contingency plan laid away in case of emergencies.
A lot of us experienced just that during the COVID-19 pandemic. Businesses who used to rely on in-person visitors were forced to take their businesses online. Museums had to create virtual exhibits, restaurants quickly pivoted to home delivery, and tour companies scrambled to curate online experiences. Each of those business types had to change their overarching goals to shift from in-person to online sales—plus adjust their company processes to produce different types of products. And to top it all off, they also had to learn how to function in a remote work environment. With all of that to deal with, it’s not surprising that many organizations experienced—and are still experiencing—unstable business performance due to those sweeping organizational changes.
But that doesn’t mean you’re doomed the next time an unforeseen business disruption occurs. The key is to be proactive. With a bit of prep work now, you can create a plan to manage risks due to unexpected organizational change—so you can hit the ground running and keep your performance as steady as possible. Here’s what to do:
Conduct a business impact analysis. A business impact analysis helps you predict the consequences of disruptions to business processes, so you have the data you need to proactively create recovery strategies. It helps answer questions like which processes are most important to keep your business running, what resources you need in order to operate successfully, and how long it will take you to get back on track after a disruption occurs. The data you collect during your assessments helps you plan in advance how to handle unforeseen events when they occur.
Create a contingency plan. A contingency plan is your backup strategy. It lays out how you’ll respond if unexpected events knock your business off track—like how to pivot if you need to change your business goals, and what you’ll do if you lose revenue and need to restructure your company. You can create a contingency plan for each significant risk you identified in your business impact analysis. Then when unforeseen organizational change happens, you’ll be able to spring into action.
Lay a strong foundation. When your business has a strong culture, clear communication, and effective collaboration tools, you can weather even the strongest of storms. That means it’s important to continuously improve your processes over time rather than just sticking to the status quo, so you’re set up for success when change occurs. This could mean building a best-in-class onboarding process to help bolster your organizational culture, establishing a regular cycle to give and receive feedback, or investing in a project management tool to help your team coordinate daily work.
Organizational change can be hard, but it’s also how we grow. And when we can navigate big transitions effectively, we set our teams up for success in a world that’s constantly shifting.
If there’s one takeaway you should get from this article, it’s that clarity and communication are essential during times of organizational change. Learn how Asana can help your team gain clarity by connecting goals to work, letting people collaborate directly on tasks, and making information easily accessible.Lead through change