What is the difference between change and transformation

Change Management vs. Business Transformation - niklausblaserinside - leading transformations

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Change Management vs. Business Transformation

It has been 22 years since John Kotter published his article "Eight Cardinal Errors in Transformation" in Harward Business Revue in 1995. The statements made in it have found wide acceptance in the business world. Nevertheless, the question arises again and again why the success of change projects is not significantly higher. In larger SMEs and large companies, the success rate is still an insufficient 20% to 30%, depending on which study is used.
Dozens of books and articles on the subject of "change management" exist, universities offer CAS or MBA programs. Nevertheless, expectations of success are often disappointed. This is all the more worrying as we are in the middle of the digital transformation phase. One reason for failure lies in underestimating the variety of topics that have to be considered and managed in change projects. Business transformations are often approached with the determined methods of change management. In my experience, it is important for the success of initiatives to differentiate between simple change projects and transformations in order to do justice to the degree of complexity of changes.
"All organizations are in transformation because the world is in transformation"
(Sean Miller, Corp. Development & Strategy, IDEXX Laboratories, 2017)
Change management is the implementation of specific initiatives that are implemented in sub-areas or across the entire company. The focus is on realizing well-described changes in the way things are done in the company.
If, for example, a software area changes from the RUP methodology to the agile way of working according to SCRUM, new roles, new forms of cooperation with customers, new goals, new processes and new teamwork are required. The change has an impact on the entire development organization. With the application of the well-known change management methods - starting with the business case, through the involvement of executives, when achieving early partial successes (quick wins), when hiring key people or during training, when demanding and monitoring disciplined implementation, etc. - the new approach in development methodology successfully implemented and shows improved results.
Transformation is a topic that needs to be positioned differently. In contrast to change management, the focus is not on a few projects, but rather on a portfolio of mutually influencing initiatives. Even more important: The overriding goal of a transformation is not the implementation of a change, it is often about reinventing the company, redefining a business model based on a vision for the future. The current example here is digital business transformation. Because practically all areas of companies are affected by transformation projects, they are less predictable and therefore involve higher risks. Even if an experienced change manager successfully implements a single change project in the portfolio, the overall defined transformation can fail.
For transformation projects, in addition to knowledge of change management, managers must strengthen their leadership skills in the areas of corporate culture, flexibility, agility, dynamic coordination of resources, stronger cooperation across organizational boundaries and communication in situations with uncertainties. In addition, the uncertainty that prevails in many areas, coupled with risks, requires management to be highly self-confident and ready for crises.
Transformation is therefore equally a process of determination and experimentation as well as implementation. Success is not guaranteed even with effective change management. It takes more. As a result of a business transformation, however, a more agile company that is comprehensively oriented for the future is presented, which can sustainably assert itself in the market.
Sufficient instructions, tools and checklists are available in the area of ​​change management. When it comes to discrete, more broadly based and sustainable changes, the theoretical knowledge has not yet been worked through so broadly. It is therefore an advantage in this area to be able to bring in personal experience and the ability to deal with insecure people. Leadership is needed, seniority helps.
Change fixes the past, transformation creates the future!
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