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Incremental Change Versus Transformation

Winston Churchill is credited with the quotation, “To change is to improve, to improve often is to perfect.” An organisation’s ability to survive is determined by its capability to implement incremental change or to transform. The terms ‘change’ and ‘transformation’ are used interchangeably, and although both are about improving an organisation’s performance, they differ in terms of complexity and effort.


The Leadership of Change® defines that an organisation can improve performance using change management in one of two ways:


Incremental Change: Small strategic improvements or adjustments that will improve organisational performance but will not alter the organisation’s core.


Transformation: Fundamental change that takes the organisation in a different direction. This could alter the structure, processes, systems, culture, or strategy to improve long-term performance or market position. Transformations are usually driven by the C-Suite, as they could include a change to the operating model, which would fundamentally alter the way an organisation operates.


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"Any organisation or leader who thinks they can implement a high number of major transformation programmes simultaneously, probably does not understand the organisation's capacity for change or their employees' workload"

It should be noted that these definitions will vary from organisation to organisation, as will the reasons for incremental change or transformation. However, for strategy execution to be successful, both incremental change and transformations will require change management support in terms of a change framework, models, processes, and tools, including internal capability. These two change types are further developed below:


Incremental Change

Small strategic improvements or adjustments might include:

  • Continuous or business improvement initiatives to make incremental improvements to manufacturing processes.

  • Implementation of new computer systems to increase efficiencies.

  • Reorganisation of a department to reduce the head count.

  • Outsource the marketing department because it is no longer considered a strategic core capability.


Transformation

Fundamental changes to the organisation might include:

  • Digital transformation to integrate digital technology across the organisation.

  • The addition or removal of a product or service within the market.

  • Altering the distribution model, for example, a manufacturer starts to sell to customers directly using e-commerce channels.

  • A shift in the business culture of an organisation.

  • Making the organisation more future proof to align with technology, competition, consumer trends, etc.

“An organisation’s ability to survive is determined by its capability to implement incremental change or to transform”

Other Considerations:

Organisation Change Capacity:

An organisation only has so much capacity for change while normal day-to-day operations continue. Pushing too much change into the organisation will limit successful implementation. It could also put an extra workload on the employees, who may then resist the change or be unable to adopt the new way of working. There are typically four key organisational capacity components; normal day-to-day operations, unplanned work or rework, mandatory change capacity, and finally strategic change capacity. A key question for organisations and leaders when implementing change is, "How much capacity for strategic change do we really have?"

Employee Workload:

Workload and organisational change capacity should be a key consideration when changing technology, systems, or processes. If new and additional work is created by the change, then leaders need to remove some of the employees' original workload to enable them to have enough capacity for new activities. Employees who complete our change history assessment© (CHA©) consistently score ‘workload’ very low, indicating that the organisation does not consider their workload when implementing change.

“Organisation change capacity and employee workload are ignored in change implementation until they become the reason for failure”



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Peter consults, speaks, and writes on the Leadership of Change®.

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Peter F Gallagher is a Change Management Global Thought Leader, Guru, Expert, International Speaker, Author and Leadership Alignment Coach.

Listed #1 by leadersHum Top 40 Change Management Gurus You Should Follow in 2022 (Mar 2022).

Ranked #1 Change Management Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Change Management (2023-2022-2021-2020) by Thinkers360.

Listed #15 in the “Top 30” for Global Gurus Leadership (2024) by Global Gurus.

Ranked #1 Business Strategy Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Business Strategy (2022) by Thinkers360.

Ranked #6 Leadership Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Leadership (April 2024) by Thinkers360.


Business Book Ranking

Change Management Behaviour - Leadership of Change® Volume 6, listed among the 50 Books from Thinkers360 Thought Leaders to read in 2022.

Change Management Adoption - Leadership of Change® Volume 5, listed among year-to-date’s (Jul 2021) most popular books on business and technology from Thinkers360 member thought leaders.

Change Management Handbook - Leadership of Change® Volume 3, listed among the 50 Business and Technology Books from Thinkers360 Thought Leaders to read in 2021.

Change Management Pocket Guide - Leadership of Change® Volume 2, ranked within the top 50 Business and Technology Books (Jan 2020) from Thinkers360 Thought Leaders.


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