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Successfully managing individual change initiatives does not necessarily establish an organisation’s capability to undertake organisational change effectively. The need to adapt an organisation’s capabilities to realise its strategy and objectives is a continuing enterprise requirement.

Meeting that requirement depends on coordinated governance, competent people, appropriate methods, organisational readiness and the ability to learn from experience. Together, these arrangements constitute an organisational-change capability, the form and sophistication of which should reflect the organisation’s circumstances.

This website explores how existing organisational arrangements can be developed and integrated to strengthen enterprise organisational-change capability, including the circumstances in which an enterprise-level function, referred to here as an Enterprise Change Office, may be justified.

Organisational Change As An Enterprise Capability

Why organisational change requires an enduring enterprise capability, and when more deliberate arrangements for developing and sustaining that capability may be justified. Read More
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Does First-Order And Second-Order Change Still Apply?

First-Order and Second-Order Change were developed long before current descriptions of organisational environments such as VUCA (Volatility, Uncertainty, Complexity, Ambiguity) and BANI (Brittle, Anxious, Nonlinear, Incomprehensible). Organisations are now seen as continually adapting, rather than moving episodically between stable states. It is therefore reasonable to question whether a distinction from an earlier context remains useful.

The distinction remains relevant because First-Order Change does not necessarily mean simple, predictable, or incremental change. It can be extensive, continuous, complicated, complex, emergent, and highly uncertain. Organisations may repeatedly adapt structures, processes, technologies, and ways of working while their underlying organisational order remains intact.

VUCA and BANI may increase the frequency, interconnectedness, and unpredictability of adaptation. However, neither uncertainty nor complexity determines the order of change. An organisation can experiment, learn, and adapt continuously without fundamentally changing its organisational order.

Second-Order Change identifies a qualitatively different situation: the underlying organisational order itself becomes subject to reconsideration and potential change. Developments in markets, technology, regulation, societal expectations or other conditions may eventually challenge fundamental assumptions about how an organisation creates value, understands its identity, exercises authority, allocates resources or determines accountability. Adaptation within the existing order may then no longer be sufficient.

The boundary is not always clear. Successive First-Order adaptations may gradually challenge the existing organisational order. However, uncertainty, emergent outcomes, or experimentation alone do not make change Second-Order. The distinction lies in the level at which change occurs, not its size, frequency, or predictability.

Although the organisational environment has changed since these concepts were introduced, the distinction remains relevant. In fact, under ongoing uncertainty and adaptation, distinguishing between change within an existing order and change to that order may be even more important.

Linda Ackerman and Three Types of Change

Linda Ackerman developed an influential distinction between Developmental, Transitional and Transformational Change in Ackerman (1986). At the time, she was primarily an Organisation Development practitioner and consultant.

Ackerman defined Developmental Change as improving existing conditions. Transitional Change involves moving from a current state to a clearly defined new state, with the transition managed over a controlled period. In contrast, Transformational Change results in a fundamentally different state that emerges over time and cannot be fully specified in advance.

This distinction means Transformational Change is qualitatively different from improving an existing organisation or implementing a predetermined design. Figure 2 illustrates these three forms.

Developmental Change Improvement of what is; new state is a prescribed enhancement of the old state. 26_11
Transitional Change Design and implementation of a desired new state that solves an old state problem; requires management of the transition process to dismantle the old state while putting in place the new state; managed timetable. 26_12
Transformational Change

Market requirements force fundamental changes in strategy, operations, and worldview.

New state is unknown - it emerges from visioning, trial and error discovery, and learnings.

New state requires fundamental shift in mindset, organising principles, behaviour, and or culture, as well as organisational changes, all designed to support new business directions.

Critical mass of organisation must operate from new mindset and behaviour for transformation to succeed and new business model or direction to be sustained.

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Figure best viewed on tablet or above

Adapted from Ackerman (1986) and Ackerman Anderson (2016) 

Figure 2: Ackerman’s Classification Of Change

On this website, daschange.info, Ackerman’s Developmental and Transitional Change are interpreted as forms of First-Order System Change, while her Transformational Change is interpreted as Second-Order Transformational Change. This is an analytical mapping made within this website and is not part of Ackerman’s original model:

  • Developmental and Transitional Change are treated as forms of First-Order Change because both can occur while the underlying organisational order remains substantially intact.
  • Transformational Change is associated with Second-Order Change, where that underlying organisational order itself becomes subject to reconsideration and potential change, and the eventual future state cannot necessarily be specified in advance.

References

Ackerman, L. S. (1986) ‘Development, Transition, or Transformation: The Question of Change in Organizations’, OD Practitioner, 18(4), pp. 1–8.

Ackerman Anderson, L. (2016) ‘Organization Development and Transformation: What It Takes’, in Rothwell, W.J., Stavros, J.M. and Sullivan, R.L. (eds.) Practicing Organization Development: Leading Transformation and Change. 4th edn. Hoboken, NJ: John Wiley & Sons, pp. 60–78

Jean Bartunek And Michael Moch And The Orders Of Change

The Organisational Development scholars Jean Bartunek and Michael Moch developed the distinction between different orders of organisational change from a cognitive perspective. In Bartunek and Moch (1987), they examined how schemata could help explain different forms of organisational change.

Schemata are organising frameworks people use to understand and interpret events. Bartunek and Moch described First-Order Change as incremental change occurring within schemata already shared by organisational members. Second-Order Change involves modification of those shared schemata themselves.

They also introduced Third-Order Change, which they described as developing the capacity of an organisation’s members to recognise their existing schemata and change them as circumstances require.

Their work suggests that fundamental organisational change may require changes to the shared frameworks through which organisational reality is understood, rather than only to structures, processes or behaviours.

References

Bartunek, J. M. & Moch, M. K. (1987) ‘First-Order, Second-Order, and Third-Order Change and Organization Development Interventions: A Cognitive Approach’, The Journal of Applied Behavioral Science, 23(4), pp. 483–500.

Amir Levy And Second-Order Change

Amir Levy was an organisational theorist whose work in the 1980s helped apply First-Order and Second-Order Change specifically to organisations.

Levy (1986) distinguished between change within an existing organisational framework and Second-Order Change, which involves more fundamental organisational transformation. Together with Uri Merry, he further developed these ideas in Levy and Merry (1986), examining organisational transformation through perspectives including organisational paradigms, culture, myths, purpose, and approaches to managing Second-Order Change.

Their work reinforced an important distinction: organisational transformation concerns a qualitative shift in the organisation and its underlying paradigm, rather than simply the quantity, scale or difficulty of change undertaken.

References

Levy, A. (1986) ‘Second-Order Planned Change: Definition and Conceptualization’, Organizational Dynamics, 15(1), pp. 5–23.

Levy, A. & Merry, U. (1986) Organizational Transformation: Approaches, Strategies, and Theories. New York: Praeger.

Paul Watzlawick And The Two Orders Of Change

Paul Watzlawick was a psychologist, communication theorist and influential figure at the Mental Research Institute in Palo Alto, California. Working with John Weakland and Richard Fisch, he drew on systems theory to examine why attempts to solve problems sometimes leave the underlying conditions that generate them unchanged.

Watzlawick et al. (1974) distinguished between First-Order and Second-Order Change. First-Order Change occurs within an existing system: its components, behaviours or processes may change while the rules governing the system remain substantially intact. Second-Order Change alters the system itself by changing the rules, assumptions or relationships through which it operates.

This distinction provides an important conceptual foundation for the Two Orders of Organisational Change used within this website.

References

Watzlawick, P., Weakland, J. H. & Fisch, R. (1974) Change: Principles of Problem Formation and Problem Resolution. New York: W. W. Norton & Company.

Ecosystem

The Office of Government Commerce And P3O®

The Office of Government Commerce (OGC) was a UK government body established in 2000 to promote efficiency and best practices in public sector procurement, project management, and programme management. One of its significant contributions was the development of the P3O® (Portfolio, Programme, and Project Offices) framework, first published in 2008. This framework provides principles and guidance on designing and operating effective support structures for delivering change. P3O® was created in response to the growing need for organisations to align their strategies with execution and to standardise the roles of PMOs across different contexts.

In 2014, the stewardship of the OGC’s best practice portfolio was transferred to AXELOS, a joint venture between the UK Cabinet Office and Capita. AXELOS continues to maintain and publish the official P3O® guidance, with the most recent version being “Portfolio, Programme and Project Offices: P3O® Guidance” (AXELOS, 2013).

The guidance outlines a hierarchy of structures, which is summarised in Exhibit 1. It also notes that “projects” can stand alone and do not need to be part of a “programme”.

Exhibit 1: P30® Hierarchy