Writing in the Harvard Business Review, business consultant Ron Ashkenas claims that too many change managers don’t know the difference between change and transformation.
The two terms seem to get muddled, Ashkenas argues. However, there are crucial differences between them, which is why so many transformation efforts fail – around 70% of them, according to research firm McKinsey Solutions.
Let’s make the distinctions clear: “change management” involves implementing clearly circumscribed initiatives designed to bring about a well-defined change in the way things work within an organisation. Ashkenas cites the example of a big tech firm that integrated specialised engineers into regional sales teams, a change that affected hundreds of people and altered their roles. Established change management strategies worked a treat – building a new coalition of leaders, making the business case clear to all, engaging stakeholders and executing with discipline.
However, compare this with another example: a big tech company that suddenly realised that the single product that had generated 90% of its sales was now being produced at a lower cost by competitors. A massive change was needed – not just getting more immediate revenue from the current product, but a shift from intra-organisational focus to externally partnered product development, a leaner support organisation, and searching for adjacencies and acquisitions.
That was transformation, not change – a portfolio of initiatives aimed at reinventing the organisation and building a new business model, not a single gear shift. Change managers executing transformations will still need to draw on their traditional capabilities, but they’ll also need new ones, like building strong collaboration across boundaries, fostering more dynamic and flexible coordination of resources, and communicating with clarity in the midst of confusion and anxiety.
As Ashkenas states, “…we really do know how to execute discrete changes. What we know much less about is how to engineer a transformation. And if we want to get better, let’s at least start by being more clear about which one is which.”