The Slice

Managing Change: Exploring Internal & External Factors

August 18, 2023

In this article, we'll explore what you need to know about the different types of change as well as the internal and external factors that can drive change.

We've all heard the old adage "change is the only constant in life," attributed to the Greek philosopher Heraclitus. Even though this expression is so common it's practically cliche, many of us struggle to deal with change personally and professionally.

Recognizing the need for change in an organization and knowing exactly how to successfully make that change are two distinct skills. There are countless ways that a company can change, be it personnel shifts, offering new products, responding to economic conditions, or outlining new company goals.

Not only that, but change can be driven by factors inside and outside your organization. Dealing with the inevitability of change is dealt with through effective change management, a strategic and systematic approach to the expected and unexpected in your company.

In this article, we'll explore what you need to know about the different types of change as well as the internal and external factors that can drive change.

Change Management: An Overview

Change is inevitable in any organization, and change management is a way to deal with change systematically. By applying knowledge, resources, and tools in a specific and directed manner, companies can develop structures, strategies, procedures, and technologies that help them handle both the project-based and technical sides of organizational change and the "people side" of the equation.

The central goal of change management is to implement new strategies, products, and processes while reducing the negative consequences of change.

While change management focuses specifically on external factors that drive change, organizational change is anything that has a major impact on the company, whether internal or external. This could mean major changes to service offerings, company goals, personnel, operations, and so much more.

Planning for change is an essential aspect of any successful business. As a company grows, new technologies are incorporated, new employees are hired, employees leave, and new departments and teams are created.

There are many components to effective change management, but success is ultimately achieved when the business continues to operate smoothly as transitions occur.

The Different Types of Organizational Change

Understanding the different types of organizational change can help you plan accordingly. One essential aspect of dealing with change for any company is ensuring that employees are aware of what changes are occurring and how they will be affected. Ultimately, you just want to make sure that everyone is kept in the loop.

You can break organizational change down into six more specific categories. By understanding the type of change you're going through, you can better understand how to design strategies that will keep the ship afloat and in good working order.

In this section, we'll take a look at the six most common types of change that any organization can anticipate facing at one point or another.

Strategic Change

When your company undergoes strategic change, it means that you are purposefully making alterations in order to boost your competitive advantage in the market, achieve goals, or respond to opportunities or threats in the market.

For example, if you change the structure of your business, your policies, or your standard processes, you're making a strategic change. In most cases, it's the higher-ups that are implementing and responsible for this particular type of change in an organization.

Structural Change

Structural change can be brought about by either internal or external factors. This type of change is made to the structure of the company– i.e., how the business is run. This might mean significant shifts in team organization, departmental responsibilities, the management hierarchy, job structure, the chain of command, and administrative procedures.

There are a number of different situations that could encourage or force structural change. These include market shifts, process or policy changes, mergers, and acquisitions. Structural changes almost always impact a large majority of employees, which means they typically overlap with our next type of organizational change: people-centric change.

People-Centric Change

No matter what type of change is occurring in your company, it's going to affect the people connected with the organization. That being said, some organizational changes are specifically focused on changes that significantly impact personnel.

It's important to understand that people typically will resist change when presented with it. This can make people-centric change a particularly delicate type of change to navigate.

For example, if you're bringing in new hires, changing roles and responsibilities for your existing employees, or undergoing layoffs, there's likely going to be some pushback. Leaders must go out of their way to ensure they communicate clearly and be transparent while remembering to take an empathetic approach when people-centric change is occurring.

Are you struggling to understand what you can do to help your team be more productive? Check out our recent post about psychological theories for team productivity.

Technological Change

In order to stay on the cutting edge, organizations always have to consider whether it's time to implement new technological solutions at every level of the company. In many cases, making technological changes means introducing a new system or software that helps make the business processes run more smoothly and efficiently.

While incorporating new tech into your company can put you at a significant competitive advantage, there are also potential consequences to this type of change. Employees can be resistant to technological change, particularly when it impacts what their day-to-day tasks consist of. It's essential to ensure that you are clearly communicating and defining technology project goals to minimize employee pushback.

Unexpected Change

To paraphrase a famous Oscar Wilde quote, expecting the unexpected makes you a smart cookie indeed. No matter how much planning and forecasting you do, there is always room in the business world for totally unforeseeable events to occur. Though you might not be able to predict an unexpected change ahead of time, you can be prepared via effective change management systems.

One glaringly obvious example of unplanned change occurred only a few short years ago when countless companies found themselves needing to shift to remote work in response to the COVID-19 pandemic. Few could have foreseen such an extreme situation, but companies that were prepared to deal with the unknown fared much better than those that were completely blindsided.

Remedial Change

Finally, our last common type of organizational change is remedial change. Reactionary in nature, remedial change happens when a problem is discovered and needs to be fixed. Unlike strategic changes, which can be unfurled over a long timeline, remedial changes require a solution ASAP to ensure that the issue at hand is addressed.

While prevention is always the best cure, even the best-run organizations will face the need for remedial change from time to time.

Are you wondering what factors are necessary to ensure a team works together well? Take a look at our recent article about things that help and hurt team dynamics.

Internal Factors That Create Change

There are plenty of things that can occur within your organization that catalyze change in one way or another.

Let's look at some of the most common internal factors that create change.

Leadership and Management

Leadership and management teams have the ability to drive change in their organization by inspiring and directing their employees.

Not only can they institute new policies, implement new systems, and spearhead new projects, but they can also create change by leading by example.

Employee Attitudes and Behavior

Shifting employee attitudes and behavior can also be a driving force behind organizational change.

Whether management is responding to an apparent lack of motivation and morale or employee feedback spurs movement in a stagnant brand, leaders aren't the only ones who can bring about transformation.

Organizational Culture

The values and beliefs of a company's culture can evolve over time.

As they transform with personnel changes and other factors, the company can move in new directions.

Technological Advances

While changing technology in an industry can be seen as an external factor, organizations can choose whether or not to incorporate them into their business system.

While adopting new tech can open new doors for a company, it can also create resistance if not approached consciously and with a great deal of consideration.

Performance Problems

When a company isn't meeting its performance goals, it often leads to some soul-searching and much-needed change.

Depending on the circumstance, this might mean changing strategies, workflows, or processes within the company.

Financial Considerations

Change is often required if a business is facing growth opportunities, budget shortages, or other shifts in financial conditions.

Primarily, business strategies and resource allocation are the major aspects of a business that are affected here, but it's important to remember that with every change, you have to consider the human factor.

Changes in the Workforce

The dynamics of a team or an entire organization can be impacted when new people are hired, seasoned employees retire, or turnover is high. Beyond that, layoffs can create a lot of change and a lot of fear within an organization.

Navigating personnel changes carefully is essential to maintaining and supporting a healthy company culture.

External Factors That Create Change

In the business world, just as it is in our personal lives, there are always going to be some things that are out of our control.

No matter how seamlessly you're running your business, there's always the potential for an external event or influence that inspires or forces change in your organization.

Economic Conditions

No matter how large or small your business is, you've likely already felt the rollercoaster ride of economic fluctuations.

Business strategies must reflect the larger economic climate to be sustainable, riding the waves of booms, plateaus, and recessions.

Competitive Pressures

If you're the only circus in town, it's easy to feel like you're on top of the world. When new competition emerges, though, the time to act may have been yesterday.

Maintaining a competitive edge is key, and the wise know never to rest too easy.

Market Trends

Due to market trends, organizations can be forced to change products, services, and other elements of their business.

Whether customer preferences are shifting, demand is increasing or decreasing, or emerging trends are pointing your company in a new direction, it's always important to keep your finger on the pulse of the marketplace.

Technological Disruptions

Companies in the modern age have to be able to adapt swiftly. New technology is always emerging, meaning it's possible that a service or product you offer now could potentially become obsolete.

Beyond that, competitors with access to more advanced technological systems can grab the competitive edge you once held firmly in your grasp.

Supply Chain Issues

As became abundantly clear in the fallout from the pandemic, no business is an island.

One small supply chain issue can cause a rippling effect through an industry, and major global events can put a bustling company at a standstill.

Political Factors

Business operations and strategies can also be impacted by political factors.

This includes changes in geopolitical situations, trade agreements, government policies, and more.

Laws and Regulations

Depending on your industry, you may be more or less bound by strict laws and regulations.

That being said, it's important to keep your eye on changing compliance regulations and laws that impact your business so you are able to pivot quickly when necessary.

Creating Positive Change Through Team Building

While change can get a bad rap, the truth is that change is where growth occurs. A pool of water that stays stagnant will grow all kinds of nasty stuff, and the same can be said of any organization. When you're managing a team, ensuring that the whole operation is running like a well-oiled machine and receiving the fuel it needs to keep growing is essential.

That's where we come in. At PizzaTime, we specialize in providing catering and experiences for remote teams across the globe. We know just how hard it is to maintain a solid and healthy culture when your entire team is working from home, and we're here to help create memorable experiences and productive team-building exercises at the same time.

Are you ready to bring your remote team together and create a positive change in your team dynamics? If so, you can start your order today.

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