The Importance of Change Management in Today’s Volatile Business Environment

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Change within a company is unavoidable, but there are strategic ways you can handle it. Read more to learn about the different kinds of change and how to handle them.

Change management has become a bit of a buzzword among business leaders since the pandemic began. But there’s a world of difference between knowing its importance and prioritizing the development of change management skills among your organization’s leadership. With solid change management best practices and an understanding of the challenges organizations face when navigating change, you can prepare your business to meet the next challenge with a good foundation.

In this article, we’ll discuss:

  • The types of change businesses experience
  • The challenges of change management
  • The strategies leaders use to navigate change
  • Preparation for periods of change

Types of change

Organization-wide change

As you might expect, organization-wide change is a change that affects an entire organization simultaneously. A merger with a competitive company or a buy-out (acquisition) by another company are both examples of organization-wide change. Any organization-wide policy change, such as a voluntary move to hybrid or remote-only work, also falls under this category. This type of change impacts all levels of the company more or less simultaneously, which can contribute to the challenges leaders face when guiding the organization through this time. With all employees and levels of operation in flux, the challenge is to create a sense of stability and trust that everything will work out eventually.

Transformational change

Transformational change refers to intentional changes, such as updates to business strategy, operations, products, or services. This includes things like taking a company public (or private) and altering the products or services a business offers. Typically, company leaders plan transformational changes to improve the long-term outlook and profitability of the company. Being that transformational changes are generally planned, businesses and their leaders have a better chance of approaching the changes with strategy and preparation to make the change management process as painless as possible.

Personnel change

Personnel change refers to major changes in staffing and recruitment. This may refer to changes to high-level leadership, layoffs, new hiring initiatives, fast-paced growth, or significant employee turnover. Personnel change is hard to plan for because it often happens rapidly and is outside the control of company leaders. These changes may also compound to worsen the overall personnel situation within the business. For example, when businesses experience a high amount of turnover, existing employees often need to take on extra responsibilities to maintain normal operations. This can lead to overworked and burned-out employees, who may decide to search for a new job, thereby worsening the personnel situation.

Unplanned change

Unplanned change is often organization-wide and may surprise both employees and leaders with its unpredictability and consequences. We all received a crash course in navigating unplanned change when the COVID-19 pandemic escalated in March of 2020, causing many businesses to close their doors and many more to navigate a difficult series of unplanned changes including remote work, government financial aid, and operational changes.

Remedial change

Remedial change is intentional changes made to personnel or operations in an attempt to mitigate negative consequences and course correct the business toward a more successful future. It may include things like firing or replacing key employees due to poor behavior or mismanagement of company resources. Remedial change may also be necessary for businesses that are ailing financially; key changes may be recommended by board members or an external consulting group.

What makes change management difficult?

With so many types of change to navigate, many of them being unplanned, it is challenging to develop good change management strategies to prepare your leadership to navigate unprecedented business complications. One way to develop a better change management strategy is to anticipate the complicating factors that make change management more difficult and include mitigation strategies to work through organizational change. Here are a few factors that often complicate change management in businesses:

  • Poor communication. Employees expect (and deserve) transparency wherever possible.
  • Lack of support. While the responsibility of planning large-scale change generally falls on upper-level management, the day-to-day responsibilities of this change are usually handled by mid- and lower-level employees. In order to handle new responsibilities and challenges, they need to be informed and supported by upper-level managers.
  • Lack of trust. Employees need to have faith in their company leadership, but never more so than during a stressful period of change. Leadership can prove themselves worthy of this trust by following through on commitments and providing support for employees.
  • Negative attitudes. Sometimes, expecting the worst can be a self-fulfilling prophecy. Employees often meet the news of significant organizational change, such as restructuring or personnel changes, with dread and fear. Maybe they’re concerned about layoffs, or they disagree with the changes that are being made. While there are limits to the impact leaders can have in this area, approaching change with positivity, enthusiasm, and optimism can go a long way … if it’s sincere.

Models for change management

Lewin’s change management model

Lewin’s change management model is a strategy for updating your processes and strategies to meet the demands of current and future changes. There are three steps:

  1. Unfreeze – evaluate current processes, workflows, systems, and strategies for efficacy. Nothing is off-limits for analysis.
  2. Make changes – make changes according to the weaknesses you detected when unfreezing your business processes.
  3. Refreeze – solidify the changes you’ve made into a permanent strategy. Make any infrastructure changes necessary to support this long-term.

McKinsey 7-S Model

Analyze your company’s performance and outlook through the perspective of the 7-S framework, which includes:

  1. Shared values
  2. Skills
  3. Style
  4. Staff
  5. Structure
  6. Strategy
  7. Systems

Kotter’s Theory

Kotter’s theory is an eight-step process:

  1. Create a sense of urgency
  2. Build a guiding coalition
  3. Form a strategic vision
  4. Enlist a volunteer army (e.g. your employees)
  5. Enable action by removing barriers
  6. Generate short-term wins
  7. Sustain acceleration
  8. Institute change

The “Nudge” Theory

Unlike the strategies above, the nudge theory doesn’t include a set of rules or steps to take. Rather, it encourages business leaders to ‘nudge’ their employees in the direction they want them to go in. The term ‘nudge’ is used here because it implies a gentle, corrective, and supportive effort, rather than a strict, rules-based approach.


ADKAR is an initialism that describes five components of successful change management:

  1. Awareness of the problem
  2. Desire to solve the problem
  3. Knowledge of how to change
  4. Ability to change
  5. Reinforcement to solidify the change(s)

How to prepare for periods of change

Be honest

There may be limits to what you can share with your employees or customers about any change your business is experiencing, and that’s okay. To the best of your ability, be honest about your strategic plans for the business and how you intend to continue supporting employees and customers through times of change. Honesty is the best policy, even when you have to say, “I don’t know.”

Think ahead

Some types of change are totally unforeseeable. But plan for them anyway. Brainstorm worst case scenarios and map out potential financial and operations stopgaps you can take advantage of in a crisis. Have plans for personnel, leadership, and strategy set up in case of emergency.

Offer support

When employees or customers react negatively to businesses going through periods of change, they’re usually doing so because they don’t feel supported through the change. Do what you can to show employees you support them and then follow through on those commitments. Whether it’s financial support or restructuring without layoffs, showing up for your employees can give your organization the strength it needs to overcome any challenge.

All organizations experience change, and there’s no one-size-fits-all way to ensure you’re prepared for what’s in store. But with transparency, loyalty, and care for your employees, your company will be able to successfully navigate whatever changes lie ahead. When you experience these unexpected changes, lean on professionals you can count on. Our executive recruiters are here to guide you through any personnel transitions! Explore how we can help your business with a free employer consultation.


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