“If you do not change direction, you may end up where you are heading.” – Lau Tzu
While change is a complex topic, fundamentally there are three kinds an organization can undertake. Often, on an organization’s journey from good to great to best, all three types will be undertaken at some point. The key to knowing which type you are undertaking currently is related to “why” an organization is changing. This not only sets the stage for the change, but also serves as a grounding element during the course of the journey.
There are many ways to depict the three change types, but the ancient Yin/Yang symbol provides a simple visual. The idea of Yin/Yang is that all things are connected and coexist with their opposite. You can read more about the symbol and its history here. This is an analogous model for change because regardless of the type of change there will always be elements of the other types embedded.
Three Change Types
As mentioned, change can be viewed as coming in three flavors. One is not better or worse than the other, each serves its purpose and each brings its own challenges and complications. Unlike some of the deeper meanings of the actual Yin/Yang symbol, the types of change do not carry similar connotations as male/female, good/bad, light/dark, etc. Rather it is a framework that demonstrates how the types of change are often intermingled with components of one another. The framework looks like this:
Offensive change refers to change efforts that focus on growth and tend to be proactive in nature. This could be an effort to expand market share, move into an adjacent market or capture the value of a market transition. These are often change events an organization undertakes in order to make something new possible. Many times, this is a case of what got you here won’t get you there. Meaning, while a company may have done great to get to this point in its existence, they must completely change in order to continue to move forward.
The Yin to the offensive change Yang is naturally defensive. These change efforts tend to focus more on performance improvement in order to adapt to something that has happened to the organization. This could include newly passed regulations, coping with a new market entrant (think Amazon) or an economic shift that requires more efficient and/or effective operations. There’s an unlimited number of reasons why such a change would be necessary, but defensive change is most often a reaction to something that’s happened or about to happen to the organization.
Strategic changes – think M&A – are commonly part of both offensive and defense changes as well as often standing on their own. It could involve acquiring an entity to move into a new market (offensive), or divesting a portion of your business to focus on higher profit margin activities (defensive). This is a specific type of change that can be undertaken in and of itself or to more rapidly enable a broader change effort.
Putting it Together
As we’ve seen, strategic change can be an accelerator for either defensive or offensive change. However, they can also be used to enable one another. For example, in order to enable an offensive change an organization may need to transform certain parts of its operations to adapt to the new market. This could have the effect of making existing operations more efficient and effective. Conversely, a change undertaken to improve operational performance could enhance organizational velocity thereby allowing more opportunities for growth.
End of the day, before you launch a transformational event, understand why you are doing so and, more importantly, ensure everyone that needs to execute understands the rational as well. A simple model such as this can help with communication facilitating a broader understanding of the change and more importantly, buy-in.