20 June, 2024

What is the Difference between Organizational Change and Business Transformation?

Organizational Change and Business Transformation are terms Project Managers encounter a lot. And it can be tricky to distinguish between what we mean by change and transformation. Let’s have a go.

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What is the Difference between Organizational Change and Business Transformation?

I’m not sure there is a consensus.

In 2015, the Harvard Business Review published an article, titled: ‘We Still Don’t Know the Difference Between Change and Transformation.

My experience is that there’s a spectrum of initiatives with change at one end, and transformation at the other. Where a particular initiative falls on that spectrum is a product of multiple characteristics.

Maybe it’s about scale:

  • Change affects limited parts of the organization.
  • Transformation affects the whole organization.

Perhaps it’s about depth:

  • Change is shallow and affects methods, tools, and processes.
  • Transformation is profound and affects values and culture.

Maybe it’s about significance:

  • Change is about operations and tactical advantage.
  • Transformation is about vision and strategy.

Perhaps it’s about ambition:

  • Change is about doing things differently… better. What we do now is not good enough.
  • Transformation is about becoming a different organization. What we do now is the wrong thing.

Maybe it’s about where the initiative originates from:

  • Change can begin anywhere within the organization.
  • Transformation starts from the leaders recognizing that the organization is no longer fit for its future – or that its future needs to change.

Perhaps it’s about a hierarchy:

  • Change needs one or more projects to make it happen.
  • Transformation needs a portfolio of change programs to come about.

Maybe it’s about completion:

  • Change has finished when the process is completed. Then it’s time for the next change.
  • Transformation never ends. It’s a continuous process.

Different Skill-sets for Business Change and Organizational Transformation

As a result, the people who deliver change and transformation need different skill-sets:

Change Managers

Change Managers need to be able to work with people to help them navigate and thrive in their new roles, or in doing things in different ways. They need to master a wide range of tools and have a deep understanding of the psychological and emotional consequences of change.

Change managers need to deal with the intersection of processes and individuals.

Transformation Leaders

Transformation Leaders need to understand the skills of change management, but they don’t need to go as deep into the toolsets and psychology. Theirs is a more strategic role, coordinating a portfolio of strategic initiatives and providing visionary leadership – often over longer time scales.

Transformation leaders need to deal with the intersection of strategy and internal politics.

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What Kit does a Project Manager Need?

I asked Project Managers in a couple of forums what material things you need to have, to do your job as a Project Manager. They responded magnificently. I compiled their answers into a Kit list. I added my own. 

Check out the Kit a Project Manager needs

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Mike Clayton

About the Author...

Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 14 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.
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