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Five Levels of Change

Disciplines > Change Management > Planning for Change > Five Levels of Change

Fine tuning | Incremental adjustment | Process reengineering | Modular transformation | Corporate transformation | See also

There are five levels of change that can occur in an organization, each of which is more difficult and needs more careful management.

1. Fine tuning

Most business are changing all the time in all kinds of ways, including refining policies, developing people, adjusting processes and so on.

This is relatively easy and is often done without needing separate improvement or change projects. Nevertheless, even small changes can create surprising resistance and whilst the business change may be easy, care may need to be taken in deployment. There can also be a risk of 'butterfly wings' (the story of a butterfly who flaps its wings in the Amazon and tips air movement into a hurricane further North), so watching the overall system may also be sensible.

2. Incremental adjustment

Slightly larger than fine tuning, incremental adjustment to the organization can include correcting faulty processes, changing business emphasis, reallocating staff and so on.

This takes more work and has a greater risk of going wrong and so is more likely to use local improvement projects, where people take time out of their day work to engage in study of the situation and design of appropriate solutions.

Companies that do this often have internal facilitators who are trained up in the methods of improvement and techniques of facilitating teams.

3. Process reengineering

Beyond incremental improvement is 'Business Process Reengineering', or BPR, where the principle is that where incremental changes have limited effect, significant improvements may be achieved by forgetting how the process is enacted at the present and starting with a clean drawing board.

Such 'clean slate' approaches both liberate the designer to entirely re-think how things are done and also give the opportunity for significant failure. A common failure in such projects is where a process gets automated but the software does not behave as well as intended.

4. Modular transformation

The next stage is to take an entire section of the business and re-think and re-build it, possibly in re-engineering way to be more efficient and maybe to re-direct it into new products or markets.

Whilst reengineering may be done with the support of an external consultant, modular transformation is far more likely to require external support from consultants, organizational psychologists and the like.

5. Corporate transformation

Corporate transformation is larger again and involves major change that affects the whole company. Such levels of change may appearing mergers or acquisitions, where entire management layers may be swept away, departments combined and so on. Another case is where a company has stagnated and seeks to transform itself for the modern age and new markets.

This is the most difficult form of change and is typically much harder than starting a company from scratch. Power battles, that may certainly appear at lower levels, escalate to a new level as directors fight for their jobs, let alone the opportunity to build new empires.

A full change of this style may be many months in the preparation and take years to stabilize into normal working. It is expensive and is likely to require consultant and specialist support for a  long period.

See also

Facilitating change, Power

Dunphy, D. and Stace, D. (1993). The Strategic Management of Corporate Change, Human Relations, 45, 8