Understanding Organizational

Change and Transformation

Dr. Henry G. Magat, LPT

Adjunct Professor, TNEEP
Philippine Christian University
What is Organizational Change
Organizational change is assessing the past, comparing it to the
present and determining the ideal future state from the current
business state.
Success measurement of change is how much better the future state is
from the current state.
What is Business Transformation

Transformation is redefining what something is (the current state). It

begins by first assessing the present to the desired future.

Success measurement of business

transformation is how much different the
future state is from the current state based
on the initial vision and organizational
strategy definition.
Transformation in not about doing it better.
It’s about REDEFINING how it’s done
Business Transformation is More than a
Trending Buzzword
Throughout the 90s and into the first decade of the millennium, change
management was the buzzword throughout corporate.

It sometimes just plain got out of control.

It seemed like changing a toilet paper roll required a change
management plan from the organizational change management office.

Every organization is using the newly-crowned buzzword, but few

execute business transformation.
Business Transformation is More than a Trending Buzzword

They are still very much focused and planning around change
management but are now just calling it transformation.
The number one reason business transformation programs fail because
most organizations and people do not fully understand what
transformation is.
Business transformation is very different from change management.
Each has a very defined role in organizational goals.
 Understanding
Organizational Change and
Transformation
1. Goals and Process Differences
Between Organizational Change
and Transformation
The goals and processes of business transformation and change are
entirely different.
You will soon learn that the dependencies on both are also different,
which is key in defining specific goals for each.
Goal of organizational change
The need to change is identified by a
standardized assessment of the present to the
past.
When you have decided to make a change, you
are evaluating current state to the past. That
process goes back and forth until there is a
determination that something must change.
 Goal of organizational change

The process continues even through all stages

of change management. There is a constant
evaluation of past and present to gauge
progress and to measure completion and
success.
 Goal of organizational change

From an organizational perspective, that measure of success is ROI

Did the totality of the change management investment

indirectly or directly drive revenue?

One of the causes of failed change initiatives is the lack of business

process documentation. Making major decisions based on
assumptions sets you up for failure.
The result of change
You (organization, leader, team or individual)
– only better – based on your defined
change objectives.
The result of change might even be you
becoming what you were in the past because
you broke something along the way.
It all depends on the goals of the defined
change, but ultimately you are still ‘you’ but
in a different state.
Goal of business transformation
Transformation assesses the present with little
or no regard to the past to define an entirely
different future.
The goal of different does not mean forgetting
critical lessons of the past during the
transformation process.
 Goal of business transformation

You have learned through a series of changes, and you must bring
those experiences forward – including to forgive but never forget the
past.
Throughout the transformation process, there is a constant assessment
of present and future with intermediate milestones to gauge progress
and success.
Result of business transformation
The result of the transformation is something or
someone that is completely different from the
present.
You (organization, leader, team or individual)
became something entirely different and redefined
based on your assessment of the future and your
objectives of redefining the future.
Result of business transformation
The result of the transformation is something or
someone that is completely different from the
present.
You (organization, leader, team or individual)
became something entirely different and redefined
based on your assessment of the future and your
objectives of redefining the future.
The comparison of whether the future is entirely
different from the present is a transformation
comparison.
2. Origination Differences of
Organizational Change &
Business Transformation
Origination of business
transformation
Business transformation originates at the
highest level of an organization due to its goals,
magnitude, and scopes of timing and budget.
Transformation cannot originate in a
department, division or team.
Organizational strategy, process,
and training will not support that
transformation sustainably.
 Origination of business transformation

If you are transforming a department, you are

completely redefining the division and likely
misaligning it out of the current operating
structure.
The exceptions to this are for large divisions and
departments that receive direct support from
the highest level of the organization.
The root support for the business
transformation is still originating from the top.
Origination of organizational
change
Change can originate in any part of the
organization.
The key to success is to ensure alignment with
the overall business strategy. Always
confirm that there are no other change
initiatives that will overlap or contradict the
change you are planning.
Origination of organizational
change
Organizational change SHOULD NOT originate at the highest level of an
organization.
It is a waste of resources and a lack of leverage of senior leadership and
thought leaders. However, organizational change still requires the
support from the highest levels of business leadership.
3. Current Business State Differences
of Change and Transformation
Current state of organizational
change
As determined, change is about ‘opportunity’ or fixing something in
the present relative to the past and changing that for the future.
Inherent to that, the current state is less than ideal.
That is what prompts the need for organizational change and is the
ultimate mark of success – are you better in the future than you are
today?
Current state of business
transformation
To even begin to think about transformation,
you (an organization, leader, team or
individual) has already got to be in a stable
‘happy’ place especially from an organizational
perspective.
You cannot successfully transform unless you
have a healthy level of stability.
4. Dependency Differences of Change
and Transformation
Dependency Differences of Change and Transformation

Change management is dependent on one or

more projects. Business transformation is
dependent on multiple change management
initiatives.
Therefore, change has no dependency on
transformation. Transformation is entirely
dependent on change.
Dependency Differences of Change and Transformation

The multiple change initiatives correct the current

state to a level of stability to define, plan and
execute transformation.
Transformation is ultimately dependent on
incremental change.
Organizational change has absolutely no dependency
on transformation.
5. The Depth of Organizational
Strategy Differences of
Change and Transformation
Organizational change strategy
definition
The strategy definition around change is
tangible, immediately measurable, discreet (a
very defined beginning and end) and
immediately tactical.
There is a precise definition of the targeted
program in a change management plan and
exactly how the focus of change will operate in
the future state.
Transformation strategy
definition
The strategy definition around business
transformation is much more intangible,
deeper and must remain more fluid at the
beginning.
Rigidity in the transformation plan is the
biggest mistake organizations make during
project execution.
 Transformation strategy definition

There are many unknowns with a business

transformation that can be defined and
mitigated at a high-level early on but need to
remain fluid as parts of the transformation
become operational.
 Transformation strategy definition

That is the hardest part of a group of executive

leaders to grasp, and it is understandably so as
they are accustomed to the rigidity and tight
definitions of change management programs
– especially as it relates to planning which
brings us to the fifth critical difference of
transformation and change.
6. Planning and Project
Execution Differences of
Change and Transformation
Organizational change timeline
& budget
Change is determined and executed when
there is an opportunity identified – a need,
expectation, desire or performance target not
achieved.
The timing of change depends on a less-than-
ideal present state as compared to the desired
end state.
 Organizational change timeline & budget

There are definitive beginnings and ends to the

organizational change initiative.
These defined start and end points are
necessary because one change initiative launch
is almost always dependent on a milestone or
end of a separate change action.
Many times these related and dependent
change initiatives are building to a business
transformation launch.
Business transformation
timeline & budget
Transformation is officially defined once an
organization gets to a stable present-state.
Once in a stable state and an official
transformation start, the timeline must remain
relatively fluid, and expectations set
accordingly amongst all layers of the
organization that are initially involved.
This is why incremental phases are critical in a
transformation plan.
Strategic Talent Resourcing
Because of the nature and origination of
transformation, critical talent must be
identified and retained throughout the course
of the transformation.
If this talent is not recruited and secured,
there will be vast disconnects in vision,
execution and ultimately the result.
Many times the transformation will not
complete without these resources.
 Strategic Talent Resourcing

Strategic staffing and retainment are critical to

any business transformation success.
That does not mean there should not be talent
and role transition throughout the
transformation.
That is where incremental planning comes into
play and talent should be resourced
accordingly.
 Strategic Talent Resourcing

The nature and duration of change allow more

fluidity of talent throughout the process;
however, key talent should be identified
throughout and, at least, one constant
champion of the initiative should be
strategically resourced and retained until the
completion of the change effort.
To end…
There you have them – the most critical differences between business
transformation and change.
It should be emphasized that both transformation and change are
essential for the overall health, success, and sustainability of any
organization.
They play different roles and hopefully, you have a better
understanding of the what, why, how and who’s to successfully
implement both change and transformation into your overall
organizational success planning!
Thank you.

Dr. Henry G. Magat, LPT

Adjunct Professor, TNEEP
Philippine Christian University