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What Is Strategic Change Management? - Definition, Models & Examples

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Lesson Transcript
Instructor: Bethany Davis

Bethany has taught college business courses and has a master's degree in organizational and human resource development.

In this lesson, we'll be looking at strategic change management, which is a process of managing a change within an organization or company. We'll also look at the various models of strategic change management. Afterwards, you can test your knowledge with a quiz.

Definition of Strategic Change Management

Every day, companies face changes, such as launching a new product, or restructuring the organization. What if companies made changes without making careful plans in a conscientious way? The result would be chaos! Strategic change management allows companies to carefully and responsibly make needed changes.

Strategic change management is the process of managing change in a structured, thoughtful way in order to meet organizational goals, objectives, and missions. Change is necessary for organizations to continue to thrive and meet and exceed the competition of industry competitors. For example, if Mary's Markers is only making permanent markers, and Mary's top competitor, Wally's Writing Utensils, sells both permanent and dry-erase markers, Mary may need to lead her company through the change of beginning to sell dry-erase markers to remain competitive.

Selected Models and Examples

There are numerous models for managing a change process. Two models that are particularly well-known and useful in understanding strategic change management are John Kotter's Change Model and Kurt Lewin's Change Model.

Kotter's Change Model: This model advocates that companies lead employees through eight critical steps. The eight steps include:

  1. Establishing a sense of urgency, or making sure that there is a need for the change and that people understand that need
  2. Creating a guiding coalition of supporters that can help model the new change and work well together as a team
  3. Developing both vision and strategy, a 'picture' of where the company is going and the steps for how to get there
  4. Communicating that vision to employees in a way that is easy to understand
  5. Empowering employees throughout the company to act on making the change possible
  6. Generating short-term wins or small celebrations along the way to celebrate and encourage success
  7. Consolidating what is learned from the current change to help the company improve the change process in the future
  8. Anchoring the change in the corporate culture through strategies, such as making clear links to performance, profit, and customer satisfaction

As an example, if Mary of Mary's Markers decided her company should begin to sell dry-erase markers to improve competition, she would first need to convince her employees that there was an urgency to do so - that if they did not start selling dry-erase markers, the business would have to close or conduct employee layoffs. Next, Mary would form a coalition of employees that believed in the need for the change and could help push it through. After that, Mary and this group of employees must work to develop a clear vision and strategy for developing the new line of dry erase markers and communicate that clearly to the company.

Furthermore, Mary and her team must empower others to be involved. One way to empower others is to hold focus groups asking for the opinions of each employee. As the process continues, Mary must find short-term wins to celebrate, such as the first prototype of the new dry-erase marker being available. Nearing the end of the project, Mary should take what she learns from this process and consolidate the wins for the future. For example, if Bob in sales really surprised Mary with his enthusiasm, Mary can use that enthusiasm to include Bob on the next project. Finally, the new change must be anchored in the culture of the organization, meaning it must become a part of what the company does, who the company is, and what the company values.

While Kotter's model is an approach best used for careful, sequential change approaches, another approach to change management is Kurt Lewin's Change Model, which might be better for changes that are simpler in nature. In Lewin's model, he uses a linear understanding of change where three stages are necessary: unfreezing, moving, and refreezing.

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