Strategic Change (With Definition, Types, and Examples)
By Indeed Editorial Team
Published September 27, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Companies can strategically implement changes to their business plans to help achieve goals or improve their competitive advantage in a market. Restructuring a business plan to meet objectives requires research and planning to ensure it adds value to an organization. Understanding this process can help you learn what changes you can make for a company, when to make them, and how the process affects business development. In this article, we discuss strategic change, explain the types of changes and the steps to restructure a business plan, and provide examples to help you make suitable changes.
What is strategic change?
Strategic change is about altering a business plan to increase a company's competitive advantage or meet organizational goals. A strategy is a long-term plan to achieve certain objectives. Organizations can perform in-depth research to evaluate and change their strategies accordingly. Embracing change is important to stay relevant in a highly evolving market. For example, a company may change its business policies, structure, or processes in response to market opportunities or challenges.
Changing a strategy can have long-term effects on an organization, and it can be challenging to predict and control the outcome. Senior management guide these changes. It's important for a management team to lead the change process in a structured way to achieve its goals. Using change management models, such as Kotter's 8-step change model, can help an organization implement changes.
Different types of this change
An organization typically changes its business strategy in response to the opportunities and challenges of an evolving market. Changes can help an organization maintain or gain a competitive advantage. It's important for a business to consider the cultural, political, and technical aspects of changing a long-term business plan. When considering the outcomes of this process, organizations typically choose one of the three following options:
Some organizations may choose to restructure aspects of their plan to remain competitive. The restructuring aims to make a business more profitable and efficient. Organizations may also restructure their departments and hierarchy by reducing the number of departments or changing the relationships between various departments.
This type of change focuses on a company's business processes rather than its functions to improve the organization's overall performance. Business processes are the tasks that help a company reach its organizational goals or deliver products to customers. Organizations may also redesign their strategies, technology, or culture throughout the reengineering process. For example, an organization may have cross-functional teams. Instead of waiting for one team to finish its tasks before the next team can start its work, both teams can work on the project together to save time.
Innovation uses skills and resources to develop new ideas or improve existing products. It can help an organization meet new and changing demands. Focusing on innovation as a method of change requires in-depth research, time, and investment in developing and testing new products. This type of change may have some risk associated with it because new ideas may not result in a positive financial outcome, but continuing to offer new and exciting products or services can also provide long-term value.
How to implement this type of change
Consider the following steps as a guide, along with existing change management models, to strategically implement changes to a business plan:
1. Determine the need for change
It's important to identify areas of improvement that may lead to the success of a business as you pursue changes to an organizational plan. Senior managers can identify these aspects for a business to remain competitive. For example, if a competitor releases a successful new product, you may make changes through innovation. You could analyze the strengths and weaknesses of the organization you work for to identify potential opportunities and challenges. Based on these factors, you can set goals to take advantage of the opportunities and overcome challenges.
2. Perform a stakeholder analysis
Several stakeholders within an organization typically have various interests and roles. You can identify how different changes might affect internal and external stakeholders. Then, prioritize the effects on the various stakeholders. Setting these priorities can help you assess how much to involve and communicate with them. Next, ask questions to understand their needs. These questions might focus on the stakeholders' financial or emotional interest in the change, the relevant resources or processes they control, their motivations, and the information they value.
3. Build support for change
Creating a sense of urgency and educating others can help you build support for change. This can help you identify the value of a company making changes to overcome potential challenges. It's also important to describe any potential risks associated with not changing the business plan. This information can help convince a team that change is necessary. You can also use influential stakeholders to support this point and provide supporting evidence. Individuals may feel more likely to believe in the change when they learn that someone they trust also supports it.
4. Create a change network
Establishing a change management team can make the implementation process easier. The team can include those who have the authority and necessary skills to introduce the change. This team often serves as a liaison between various stakeholders and ensures everyone understands the importance of the change. Other members of a change network can include:
Sponsors: Sponsors represent those who launch the change and provide support through words or actions. They lead by example by demonstrating their commitment to implementing the change.
Advocates: Advocates encourage support for the change but don't have the authority to direct resources or implement the change directly. They can motivate other stakeholders to gain their support and offer advice for implementing change.
Targets: Targets represent those who are most impacted by the change. As part of the change network, they maintain communication with superiors and provide feedback as required.
Change agents: Change agents implement changes and ensure their success. They have the expertise to make the changes and provide help to meet challenges and develop solutions.
5. Prepare a change management plan
A change management plan provides direction for a team. Once you agree on your plan for a company, the team can begin executing it. Here are some key elements to consider as you develop a plan:
Goals you aim to achieve
Scope of the change you plan to implement
Tasks and activities necessary for achieving goals
Tools or resources necessary for completing tasks
Timeline that defines the deadlines for each task
6. Identify and manage obstacles
Developing contingency plans can prepare a team to navigate potential challenges. It's important to be flexible and adjust plans as required. Obstacles may arise in the form of resistance from stakeholders. For example, they might worry that the change may negatively affect them. Depending on their concerns, you can offer reassurance and explain why the changes are necessary and highlight their relevant benefits.
7. Evaluate the change
Monitor the impact of the change to determine its effectiveness. You can compare data before and after the change to assess the differences. If you notice improvements, this may demonstrate an effective change. When the results show issues or little difference, you may make additional changes or readjust the plan.
Examples of strategic change
Here are examples of how an organization can implement change effectively:
Here's an example of how a news media company may implement change:
A newspaper publisher realizes that the industry is in decline. After collecting data, its management determines that most people receive their news through the internet. The company decides to alter its business plan to establish an online model that requires users to subscribe to read its content. This change requires restructuring the organization by selling its printing facility and making those producing the physical newspaper redundant. Eliminating the costs associated with the printed product enables the newspaper to continue its operations online.
Here's an example of how a vehicle manufacturing company may implement change:
A car manufacturer notices its competitor has started selling electric models. The company determines that to stay competitive, it's also important for it to begin offering electric vehicles, as consumer interest in these vehicles continues to grow. The organization designs and develops electric vehicles and eventually launches them on the market. To further differentiate itself, the company invests in research and development to lower the cost of its electric vehicles. It hopes by achieving this goal, it can attract more customers and outsell its competitors.
Explore more articles
- How to Solve Top Challenges Facing HR (With Helpful Tips)
- Traits of Chief Revenue Officers (With Steps and Skills)
- Authentication vs. Authorization (What's the Difference?)
- Client Report (Definition, Benefits, and Guidelines)
- What Is a Hero Shot? (With Benefits, Tips, and FAQs)
- 5 Excellent Software Programs to Use for Project Tracking
- The Complete Guide to the Construction Planning Process
- Why Is Dashboard Design Important? (With Best Practice Tips)
- Educating Patients (With Definition, Benefits, and Methods)
- CSAT vs. NPS: Learn Their Differences to Know What to Choose
- What Is Anchor Text and What Are Anchor Text Types?
- The Ultimate Guide to SMS Marketing (Definition and Tips)