From Organizational to Business Change
Although organizations and businesses are often closely intertwined, they are fundamentally different concepts. In practice, however, business changes can often be perceived as organizational changes by individuals within a company, as they may only witness the aspects that affect the organization. But does this distinction matter?
The Difference Between an Organization and a Business
What distinguishes an organization from a business? Traditionally, business has been viewed in its simplest form as involving two main parties: the producer and the customer.
However, modern thinking goes further. Business models now describe businesses more comprehensively. For instance, the Business Model Canvas, a popular template, delves deeper by incorporating many essential business elements and various types of partners.
The Evolution of Business Change
In the past, business change was typically managed as a project. A successful change project would start with the customer side and then address the supplier side.
Today, we live in a VUCA (Volatile, Uncertain, Complex, and Ambiguous) world, where the frequency of change and the level of uncertainty have both increased. The old, project-based approach to change is no longer sufficient. There is a growing need to shift towards a continuous, process-based approach to change.
Towards Reinvented Business Change
In a reinvented, process-based approach to business change, all parts of a business model are continuously evolving. The goal should be to make these changes as simultaneous and coordinated as possible, though this is challenging, given that different elements of the model (such as customers or partners) may change at different rates and depths.
Business change encompasses the entire business community as defined by the business model. It involves not only shifts in mindset but also tangible changes in activities. It's surprising how little attention this new reality has received.
Practical Implications
- Business changes typically involve multiple organizations that must coordinate and implement changes simultaneously.
- Companies that cling to the notion that "our organization is our business" may struggle to adapt in VUCA conditions.
- Business is organized, but it is not an organization, which means that in the absence of direct hierarchies, change efforts need to be more appealing and less coercive.
- The Reinvention Method, as a shared change framework, can help bridge organizational culture differences and lead to more successful multi-party changes.
- Since business change is a continuous process, all involved parties should have the necessary reinvention capabilities and resources.
What is your current situation? How do you manage business as a whole in a change situation?