Organizational change is a complex, dynamic process that requires great strategic planning. Change can be initiated internally or externally and it is essential for any organization to recognize when changes are needed and how to effectively implement them. Striking the balance between short-term and long-term goals is one of the most important aspects of managing organizational change. This article aims to provide an overview of how internal and external triggers drive change and strike the balance between short and long-term objectives.
Many things can cause an organization to have to go through change. But the triggers of organizational change generally fall into one of two categories: internally driven change or externally driven change.
Long-Term Visions Take Shape with Internal Changes
Organizations launch internally-driven change to move toward or realize long-term objectives. This type of change seeks to alter the way the organization works, with an aim to increase its long-term and medium-term impact. Internally-driven change can also come from original ideas within the organization.
Internally-driven changes include inventions, innovations, and original process improvements. Based on ideas from inside the company, organizations might change products, processes, or even worker compensation.
Organizations can often find themselves in a rut when it comes to achieving their long-term goals. However, by launching internally-driven change, organizations can move towards and realize their objectives more quickly and effectively.
In contrast to externally driven changes such as new technology or market trends, internally driven change is focused on reorienting the internal structures and processes of an organization in order to enable it to better meet its goals. This could include realigning departments, introducing new roles, or shifting resources around in order to better support the long-term vision of the organization. By making these types of changes internally, an organization can ensure that they are tailored specifically for its own operations and culture.
Internally driven change may be disruptive in the short term but will ultimately prove effective if managed properly.
The Catalyst Behind Externally-driven Change
Externally-driven change happens as a response or solution to immediate and external circumstances. Typically, externally-driven changes are reactive. They’re usually intended to solve short-term problems.
Externally-driven change can come as a response to new legislation, bad publicity, or customer feedback. Or it might be a response to competition from rivals.
Externally-driven change is a term used to describe when an organization or group of people are presented with an external issue and must respond in some way. It contrasts with internally-driven change, which happens as a result of internal decisions or events. Externally driven change can often be seen as more disruptive than internally driven change because it is out of the organization’s control and usually requires quick decisions.
When externally driven changes occur, it is important for organizations to take into account the needs of their stakeholders and the impact on their operations. This type of analysis helps to ensure that the end result provides maximum safety, efficiency, and productivity among all involved parties. Often times this takes the form of risk management plans that help to identify potential issues and mitigate risks before they become major problems.
Unlocking the Potential for Significant Transformation
Let’s explore an example. Cody works for a soft-drink company. His company actively seeks ideas for new products from all its employees. When someone has a good idea, the company tries it out.
Cody’s company is always trying to keep one step ahead. It recently developed a new system to automate a process that used to be manual. And it managed to do this without having to lay off any employees.
Cody’s company is a market leader, but it found its position was threatened when a rival company started selling soft drinks produced from non-genetically modified corn. Cody’s company recognized that the public was concerned about genetically modified corn, so it sourced corn that wasn’t genetically modified. It also had to make some changes to its processes when the government issued new environmental regulations.
In this situation, Cody’s company trying out new ideas is an internally-driven change. So is the change to an automated system. But changing to non-genetically modified corn is an externally-driven change — the company made the change because of competition and public concerns. Changing processes because of environmental regulations is another externally-driven change.
Externally-Driven vs. Internally-Driven Change -Which is Most Effective?
Organizations are faced with two types of strategies — internally-driven and externally driven. Each has its own unique advantages and disadvantages, so the most effective strategy is dependent on the context in which it’s used.
Internally-driven change involves making changes within an organization that are based on internal factors. These changes may be in response to a new manager or executive, or as a reaction to customer feedback. This type of change often leads to more long-term stability and better morale within an organization because employees feel empowered and involved in the process.
However, internally-driven change can be slower than externally-driven change because decision-makers must take into account all stakeholders’ opinions before making any decisions. Externally-driven change is based on external factors such as economic conditions, competition, or technological advancements.
When organizations make externally-driven changes, they are reacting to their immediate business circumstances. However, making an internally-driven change is proactive and is often a result of innovative ideas. If you can recognize what’s triggered the change, you can often tell more about the scope of the change: externally-driven change is frequently aimed at dealing with short-term issues, while internally-driven change often focuses on the long-term.
Change is an essential part of any organization’s growth and development — there will always be triggers, either internal or external, that will drive a company to make changes. It is important for organizations to strike the balance between short and long-term goals during these periods of change so that they can achieve the best outcomes. Organizations should consider the needs of their employees, customers, and stakeholders in order to create a successful change management strategy.