Change or Transformation?

By Dr. Nina Mohadjer

It may be said that to implement change in an organisation takes a real leader. But, as Nina Mohadjer contends, to carry out a transformation calls not only for a leader but also the wholehearted commitment of all those involved – and that, while more challenging, can only be positive.

AI is everywhere and almost everyone is frightened by ChatGPT. Sure, some are excited, believing that AI will eliminate boring tasks and write their emails, articles, and books. This point of view does not consider that a system, in this case AI, aka ChatGPT, is only as successful as we, the humans, make it. So the question comes up of whether it will lead to change or transformation in our business world. If you look for the difference between change and transformation, you come across the following definitions. Change is the exchange of one thing for another of similar type. Transformation, on the other hand, is a complete change in the appearance or character of something or someone in a way that the thing or person is improved (Cambridge Dictionary, n.d.). In the business environment, a change is automatically a top-down request and an external factor, regardless of the agreement of the people involved. A transformation, however, requires the internal agreement of the involved, making the transition from one stage to the next seem seamless (Behrend, n.d).

Just like many words in the business world, these two words are used interchangeably, and unfortunately not always in the right context.

Change Management

Often, when the word “change” is used in business, people connect it with discomfort. While it is supposed to bring positive aspects to an already-existing situation, service or product, it creates an unknown, combined with unease. This does not consider the fact that change in business should have two important components: (a) system change and (b) personal change. One is for the introduction and implementation of the system, and the second is the human individual aspect to ensure the acceptance and the use of the application.

The dynamic Lewin model of change indicates the following three steps in order to have a successful implementation of change: (1) unfreezing the present stage; (2) implementing the new behaviour; and (3) re-freezing the stage (Levasseur, 2001). Within the entire process, however, the key success factor is timely leadership communication. Thus, it becomes the leadership’s challenge to select which parts to keep, and which to eliminate.

However, the second aspect has to be considered and becomes the main success factor for the change management. While employees used to obey a leader’s request for change and the leader’s decision of what needs to be unfrozen, implemented, and refrozen, today, employees want to be part of it. As 70 per cent of change requests fail due to employee resistance (Ewenstein et al., 2015), management needs to respond to the employees’ question: “Why?” (Hiatt, 2006).

As Prosci (2012) indicates, change management can only be successful if the individuals who are obliged to use the changed product or system or face the changed situation understand the reason for the change. Simultaneously the organisation has to accept that an application will never be successful if the individuals do not have that comprehension of the changed vision of the desired outcome (Ewenstein et al., 2015).

Transformational Management

Transformation needs the change, but goes one level deeper into the cultural system of an organisation. It completely replaces one thing with another by not only changing the external perception, but by reinventing all the aspects.

Additionally the time component is not definite. Instead, a transformation aims at a continuous reinvention to adapt to the present state, as well as the needs of the future. As transformation aims to reinvent a complete situation, service, or product, it involves different business units and, thus, it becomes more challenging and more unpredictable to involve all the parties (Golden-Biddle, 2007). The transformation phase requires that employees step outside their comfort zone, but this is only possible if the leaders are transparent and show them where their journey will lead. The employees have to understand that different phases with the associated time period are a necessity and will lead to a prosperous future.

It becomes automatically the leader’s job to motivate, engage, communicate, and demonstrate the urgency of the transformational steps (Kotter, 1996; Kotter, 2007; Golden-Biddle, 2013). At this point, it also becomes the leader’s task to understand frustrations and subsequent criticism and use the feedback to re-evaluate the direction. Furthermore, the leader has the opportunity to demonstrate the urgency by indicating that the business will not be able to remain in the present state, but that the transformation into the next stage is an absolute necessity.

Lastly, transformation management is a repetitive procedure and a never-ending circle of feedback, comment, adjustment, and re-evaluation (Golden-Biddle, 2013).

Why do we refer to digital transformation and not digital change? After analysing the different aspects of each, it becomes clear that a digital change would not have room for survival. A system implementation would not work without the involvement of the people who are supposed to use it. The success of a transformation requires the collective commitment of users, the understanding of the why and when, and the right vision for the future.

While senior executives have the power to request a change in almost any aspect of an organisation, a successful transformation requires a step-by-step application with the assistance of the involved parties. The best example is Lufthansa. In 1991 the airline, close to bankruptcy, had to reinvent the business and create a global aerospace partner by creating a mental change in the employees. While employees were excluded from the cost management and cost reduction, the remainder had to be involved in a trusting relationship with the airline from strategic and rental arrogance to devolution and simplification and finally reintegration (Bruch, 2001). The airline was able to engage everyone not only by changing the mental state regarding the transformation, but had a simultaneous top-down, bottom-up approach within four weeks. By putting leadership into action and not just requesting a change from the top, employees as individuals were able to see the future and, thus, started relying on their own strength in dealing with the crisis.

Conclusion

In conclusion, transformation focuses on the future. Thus, when we speak about digital transformation, we indicate that the individuals using the digital devices, system, and products are involved. It will be a top and bottom relationship. A digital “change” would indicate a top-down approach, but a digital device, system, or product without the involvement of the end users would be redundant in the shortest time period.

To quote Tanmay Vora: “Change fixes the past and transformation focuses on the future.” (Behrend, n.d.).

About the Author

Dr. Nina Mohadjer, LLM has worked in various jurisdictions where her cross-border experience as well as her multilingual capabilities have helped her with managing reviews. She is a member of the Global Advisory Board of the 2030 UN Agenda as an Honorary Advisor and Thematic Expert for Sustainable Development Goal 5 (Gender Equality), and a co-founder of Women in eDiscovery Germany.

References

• Behrend, F. (n.d.). “The difference between change and transformation”, retrieved 11 April 2021, from https://transformation.work/blog-en/insights/the-difference-between-change-and- transformation/
• Bruch, H., & Sattelberger, T. (2001). “Lufthansa’s Transformation Marathon: Process of Liberating and Focusing Change Energy”, Human Resource Management, 40(3), 249–59. https://doi.org/10.1002/hrm.1015
• Cambridge Dictionary. (n.d.) “Change” and “transformation”, in Dictionary Cambridge.com, retrieved 10 April 2021, from https://dictionary.cambridge.org/dictionary/english/transformation.
• Ewenstein, B., Smith, W., & Sologar, A. (2015). “Changing change management”, McKinsey Digital
• Golden-Biddle, K. (2013). “How to Change an Organization Without Blowing It Up”,  MIT Sloan Management Review, 54(2), 35-41.
• Hiatt, J. M. (2006). ADKAR:A model for change in business, government and our community: How to implement successful change in our personal lives and professional careers. Loveland, CO: Prosci Research
• Kotter, J. P. (1996). Leading change, Cambridge, MA: Harvard Business Press.
• Kotter, J. P. (2007). “Leading Change: Why Transformation Efforts Fail”, Harvard Business Review, 85(1), 96–103.
• Levasseur, R. E. (2001). “People Skills: Change Management Tools – Lewin’s Change Model”, Interfaces, 31(4), 71,  https://doi.org/10.1287/inte.31.5.71.9674
• Prosci, X. Y. (2012). Best Practices in Change Management, Loveland, Colorado: Prosci Learning Centre Publications.