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Change Leadership

Updated on May 4, 2024
Article byKhalid Ahmed
Edited byKhalid Ahmed
Reviewed byDheeraj Vaidya, CFA, FRM

What Is A Change Leadership?

Change Leadership refers to a proactive management style encompassing a people-centric approach, conceptualizing change directives as an organizational growth opportunity and transformation instead of being limited to a single pattern. It aims to emphasize continuous improvement in the organization to ensure it makes successful and strategic adjustments in its operation.

Change Leadership

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Leaders here are serious about large-scale transformative vision for the organization. They find ways to empower employees to contribute to the formation of vision. An effective change leadership influences and enthuses others using vision, personal advocacy, and resource access to drive them to build an impeccable base for change.

Key Takeaways

  • Change leadership is a practice management style that takes change directives as avenues for organizational growth and transformations by focusing on regular improvements and strategic adjustments.
  • Change leadership requires strategic thinking, vision, enthusiasm, problem-solving, adaptability, empathy, resilience, project management, a growth mindset, innovation promotion, and Effective Communication.
  • Its importance lies in helping organizations steer change, drive innovation, create a positive work environment, inculcate change as a growth opportunity, identify shortcomings, encourage employee development, and improve financial performance.
  • It fulfills particular milestones inside a structured execution plan, whereas change management tries to encourage people to follow and abide by a strategic vision having a set purpose and enthusiasm.

Change Leadership Explained

Change leadership is defined as a strategic framework to guide organizations and individuals through different stages of transformation. It underscores the fostering of positive change, achieving desired results, and managing change while guaranteeing sustainable and smooth progress. It equips leaders using mindset and tools to navigate numerous complexities arising from new situations, driving innovation and adaptation.

Most financial institutions remain under the ongoing threat of disruptive forces like regulatory changes, technological enhancements, and workforce attrition but can use them to their advantage. It is also the process of taking an organization through significant transitions, disruptions, or various organizational transformations as a leader in a smooth manner. It can be implemented in an organization through three models:

1. The Kotter Method

The Kotter Method suggests that for any change to be adapted to, it is important to create an urgency to show how necessary it is to adapt to the new requirements. Once, this is done, the next step is to convince people around and share the vision for change with them to remove related obstacles and achieve success.

2. The ADKAR Approach

ADKAR stands for Awareness, Desire, Knowledge, Ability, and Reinforcement. The full form of the term implies how this approach works. This change management model begins with the awareness of the need for change and then the desire to adapt to it for transformation. To achieve success in the process, it is important to gain adequate knowledge on the required change and the ability to follow the same for reinforcement and sustainability. 

3. The Bacharach Model

The Bacharach approach, named after Professor Samuel Bacharach, suggests the mindsets that one must have to implement change leadership. It allows change leaders to bring about transformation organically by developing certain mindsets. It projects leaders vouching for change as agents of change.

It deals with and is concerned with changing people’s attitudes and the work culture of an organization. Influential leaders of change can exhibit self-awareness and empathy and embrace the chaos of change strategically. Organizational change leaders are deeply engrossed in every stage of change, knowing that leadership here has to be miles ahead of everyone else.

For the financial world, it has many positive implications, like – increased agility, resilience, and innovation in an organization. It leads to the ultimate impact on their financial performance. Many research studies have highlighted leadership’s significance in fostering the financial performance of a firm. It also leads to working collectively with employees to make them ready for change and bring positive financial outcomes to a firm.

It has become a critical skill and factor for senior management, managers, and supervisors in the financial field for managing change leadership to enable them to inspire stellar performance and drive through organizational change impactfully. 

Skills

Change leadership needs an amalgamation of various tactical and soft skills for effectiveness, which are listed below:

  • Forward and strategic thinking
  • Vision
  • Enthusiasm 
  • Problem-solving skills
  • Adaptability 
  • Empathy 
  • Resilience
  • Project management 
  • Growth mindset
  • Innovation promoter
  • Communicating skills
  • Quick implementor
  • Strong outside relationships
  • Tactical perspective
  • Effective Communication

Besides these, a leader for change must have the ability to re-design the system and guide staff in physical training, high-performance teams, organizational design, and facilitation. 

Examples

Let us use a few examples to understand the topic.

Example #1

Let us imagine a technology firm, Jenna Tech, which is transitioning from work from home to normal business operations under change leader Joshua. He feels the need to recognize the need for a seamless and successful transition. Hence, he starts to guide the organization towards the change process. He communicates effectively and openly with employees, making them understand the reasons behind the change and also addressing their concerns. 

He also teaches a culture of resilience, adaptability, and problem-solving to help employees accept change and work towards it. Furthermore, to make tasks easier, he gives them tools and resources to adjust to the new work environment. Finally, Joshua successfully transformed the company into an office-operated traditional business in a positive and short time.

Example #2

In a hypothetical scenario, a retail chain, BrightMart, needs help to adapt to changing consumer preferences and increasing competition. Recognizing the need for change, the CEO, Alex, initiates the unfreezing stage by conducting meetings with department heads to discuss the challenges and explore new strategies. Through open dialogue and collaboration, they decide to revamp the store layout, enhance customer service training, and implement a digital marketing campaign. 

During the changing stage, Alex leads by example, actively participating in training sessions and encouraging employees to embrace the changes. As the new initiatives begin to yield positive results, such as increased foot traffic and customer satisfaction, Alex reinforces the changes by integrating them into the company’s culture and performance evaluations, ensuring sustained success and growth for BrightMart in the competitive retail landscape.

Example #3

Amidst Novartis’ ambitious organizational restructuring in 2021, Ashley Sardjoe, VP of Country and People, HR, navigated both professional and personal transitions, emphasizing the critical link between self-care and effective leadership. As the company aimed for $1 billion in cost savings by 2024, Sardjoe championed the importance of prioritizing physical and mental well-being, recognizing its role in guiding the workforce through substantial changes.

His leadership underscored transparent communication, empathy, and resilience, which are crucial in rebuilding trust post-restructuring. Drawing from his own experience of job insecurity, Sardjoe advocated for HR leaders to prioritize personal well-being, setting a precedent for fostering resilience and trust amidst transformative change.

Importance

It is crucial for the survival of an organization in the current turbulent times and technology advance era, as listed below: 

  • Helps organization to navigate through various stages of implementing change successfully
  • Drives innovation within an organization and increases sales
  • Creates a positive work environment leading to satisfied employees and ensures overall growth
  • Inculcates change as a growth opportunity in the mindset of employees, making the organization adaptable to any situation
  • Provides a sense of stable leadership during change implementation
  • Helps identify shortcomings, loopholes, and inefficiencies in workflow to amend them for efficiency
  • Encourages ongoing all-around development of skills and knowledge base of employees, bringing a competitive edge to organizations
  • Makes change-ready organizations by adding change readiness into it
  • Helps in tracking change and creating a history of successful changes, leading to better decision-making abilities
  • Brings enormous improvement in financial performance

Change Leadership vs Change Management 

Both center on aiding changes and accomplishing critical purposes, but their goals differ as per the table below:

Change leadershipChange management
Its goal is to fulfill particular milestones inside a structured execution plan.It tries to encourage people to follow and abide by a strategic vision with a set purpose and enthusiasm.
Change managers take the responsibility for strategizing, organizing, and implementing all milestones.Change leaders have the responsibility to generate and share organizational vision. 
Change managers provide employees with ample training and resources and supervise their progress.It empowers staff to pursue vision with a mindset of positivity.
It directs itself toward monitoring continuous change at the organizational level.It contains a set of simple structures or tools aimed at containing change efforts within control.
It brings about change in an organization by using different change leadership models.It aims at minimizing the impacts and distractions of the transformation of an organization. 

Frequently Asked Questions (FAQs)

1. How to change leadership culture?

To change leadership culture, one must apply the following steps:
It must start by setting a clear vision for an organization
Then, it must choose from the most desirable form of leadership
An organization must encourage its staff to align with its mission.
It should foster confidence amongst challenges in the workforce.
Inculcate the habit of learning from mistakes.
To shape the culture, a proper mode of communication must be devised.

2. What are the 5 C’s of change leadership?

The 5 Cs of change leadership include culture, communication, courage, conviction, and compassion. These elements are essential for navigating organizational transformation successfully. Culture shapes the context in which change occurs, while effective communication ensures alignment and understanding among stakeholders. Courage is needed to overcome resistance and drive change forward, supported by conviction in the vision and goals. Compassion fosters empathy and support for individuals impacted by change, promoting a positive and inclusive environment.

3. What are the three stages of change leadership?

The three stages of change leadership are often referred to as unfreezing, changing, and refreezing. In the unfreezing stage, existing patterns and attitudes are challenged to prepare for change. The changing stage involves implementing new practices, processes, or behaviors. Finally, in the refreezing stage, the changes are reinforced and integrated into the organization’s culture to ensure they become the new norm.

This article has been a guide to what is a Change leadership. Here, we compare it with change management, and explain its examples, skills, and importance. You may also find some useful articles here –

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