What differentiates change and transformation and why differentiating the two matters

That change is the only constant in our lives has been brought to our attention over the past few years. The global financial and real estate crisis in 2008 led to major changes in the economy and also in society. New technologies, global competition and disruptors, such as Elon Musk, also continue to drive change. The COVID-19 pandemic and the continuing escalation of the climate crisis are accelerating the pace and scale of change. In recent years, companies made repeated attempts to realign themselves in individual areas of activity. In doing so, executives tend to be driven into action instead of proactively embracing the underlying changes and laying the foundation for a sustainable future of the company.
Changes are adjustments in individual areas of a company, such as accelerating product development through optimization of processes, in order to keep pace with the international competition, outsourcing certain operational functions in order to save costs, or introducing a new collaboration tool for improving interaction in the international supply chain. These are often responses to external changes that are dealt with by internal measures. It is, of course, important to turn those affected into participants, i.e. to discuss and organize change with the active involvement of employees and thus strengthen the readiness and ability of the workforce to embrace change.
The willingness and ability to change in organizations is increasingly becoming a core competence and cannot be delegated to a change manager. They are key tasks and challenges for everyone. However, the COVID-19 pandemic and the intensifying climate crisis clearly show that this will not suffice. Organizations are forced to proactively address far-reaching and long-term changes in their environment and to initiate a strategic transformation that affects all areas of the business. Transformations are significantly more extensive than changes, both in terms of the breadth and depth of subject matter, the temporal scope, and the consequences for the strategic orientation of the organization.
A transformation involves not only a targeted change, but typically a comprehensive adjustment of processes, structures, strategies and culture, to name just a few of the areas to be addressed. Where the focus of a transformation is in each case, must be clarified before any measures are taken. This can include, for example, the digitization of a company, agilization, or the re-orientation of the way work is done in the organization, which is often referred to as “New Work”.
Due to the scope of a transformation, management is usually the key driver and begins with the formulation of a suitable vision or strategy. While changes are often organized in the form of projects, transformations can only be realized through comprehensive programs with a large number of underlying projects. Of course, projects and programs in the context of change are not to be defined, planned and controlled like those in the context of construction. After all, it is primarily a matter of human behavior, embracing uncertainties and often a sense of what is the right course of action. Nevertheless, the expectations of many stakeholders and the task itself require effective completion of the tasks at hand, which can be done effectively in the form of projects and programs with the appropriate management of transformation and change.
The key, however, is to proactively prepare for the challenges of the future through transforming, to set the course for the organization in a timely manner, and not to wait until there is no other way. Organizations that embraced the possibilities of technology for digital training and home offices early on had a clear advantage in the current pandemic. Doing this just after the outbreak of the pandemic not only brought disadvantages, but also endangered the existence of one or the other firm. Additionally, we can already see the consequences of global warming or the looming climate catastrophe in the form of the current extreme heat and flood events. We should take this as a wake-up call and act!

Author: Reinhard Wagner, CEO of Tiba

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