Clear cultural, value based and strategic change initiatives can be vital for organizational survival. In this video, Bob McGannon takes you through the three levels of organizational change. These three levels are: adjusting the processes and approaches used to accomplish work in the organization; wholesale changes to the way your business is conducted; and seeking to change the very purpose of your organization's existence.
- [Voiceover] The project management guide describes the need for organizational change management quite well. For financial and business services organizations business change is not only a characteristic of many projects undertaken in a sector. It's also one of the strategic drivers of performance. The need for organizational change is not just limited to businesses. Government organizations need it too. You don't have to go very far to find news of public protest and initiatives that alter governments not serving the needs of their citizens.
Along with the individual and procedural change I've discussed in this course. Clear cultural value based and strategic change initiatives can be vital for organizations to survive. These are often big complex projects and they need to be managed with care. However, all organizational change initiatives are not the same. Let's break these ambitious initiatives into three categories as defined by the project management institute. They are first order change, second order change, and third order change.
A first order change involves adjusting the processes and approaches used to accomplish work in the organization. You're looking for incremental improvement here, and typically you can measure the results rather easily. Usually your team members can practice the change you're trying to implement, and you can make adjustments in advance of implementation. For example, I worked on a project in Australia where medical cost reimbursements no longer require paperwork, and were processed electronically. This first order change benefited citizens and significantly changed internal processes for the governments medical insurance department.
First order change initiatives can also be installed iteratively across parts of your organization, and they can even be reversed if the changes don't go as intended. First order changes are the most straight forward, but they still require diligent management and you can spend a notable amount of money and time implementing them. Next is a second order change. These initiatives involve wholesale changes to the way your business is conducted rather than incremental change.
This is typically a reaction to notable changes in the marketplace. Like that happened within the bookstore industry when Amazon.com entered the scene. A great deal is involved in second order change initiatives. Including new policies, cultural adjustments, significant job shifts, training to support those job shift, and new key process indicators. In many cases, these changes are so broad and far reaching they cannot be reversed.
The organization is sent on a new course and the cost of reversing that change would be so significant, it's often impractical. These initiatives require an extensive planning and thorough buy ins from all levels of the management team. Employee support is also extensive since many will be working in significantly altered jobs when the change is implemented. Finally, there are third order change initiatives. These are rare, but they can be vital.
Especially when a business is facing obsolescence. Companies like Kodak, Radio Shack in the U.S., and any number of video stores have disappeared because they didn't properly monitor the world around them, and engage in a third order change initiative in order to survive. Third order change initiatives require exceptional skill and dedication. You need to be in lock step with your organizations senior leadership as you seek to change the very purpose of your organizations existence.
In these change initiatives, you not only have to manage the elements of a second order change, but you must perform innovation and market analysis management as well. Organizational changes often required for retention of market share. No matter whether it is first, second, or third order change. These are challenging and exciting initiatives that stretch the capabilities of any change management team. Do this well and it'll mean you've made a significant contribution to the lifeblood of your organization.
- Understanding the levels of change management
- Working through the five phases of change management
- Creating a change plan
- Communicating change
- Implementing change
- Managing risk
- Reinforcing change
- Evaluating the change
- Guiding individuals through change