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Assessing Your Organisation’s Change Capability

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Contents
Introduction

A clear definition is important because it clarifies what is changing, why it is changing, and how to distinguish different types of change.

Within this website, organisational change is defined as:

“The adaptation of an organisation’s Enterprise System and, where necessary, its Governing Logic to enable the realisation of its strategy and objectives.”

This definition positions organisational change within the broader context of strategy, organisational capability, and Operational Continuity. The following sections explain this relationship.

Alternative Definitions of Organisational Change

Review alternative perspectives on organisational change and consider how they relate to the definition used here.

Make The Comparison

Strategy Is Executed And Realised Through Operational Continuity

This website maintains that strategy is executed and realised through the ongoing use of organisational capabilities to fulfil the organisation’s purpose and achieve its objectives. This continuing use of organisational capabilities is referred to on this website as Operational Continuity. The term is preferred over Business As Usual (BAU), not because BAU always means routine or unimportant activity, but because it can imply those meanings.

Operational Continuity highlights that ongoing operations are essential to executing and realising strategy. It does not mean operations are routine or unchanging. Organisations may respond to new circumstances, handle complex tasks, and adjust how they use their capabilities. The key distinction is between using organisational capability and adapting it. Operational Continuity involves the former; organisational change adapts the Enterprise System and, if needed, its Governing Logic.

Operational Continuity Depends on the Enterprise System

Operational Continuity depends upon the organisational capabilities available to fulfil the organisation’s purpose and execute its strategy. Within this website’s framework, the organisation’s Enterprise System provides those capabilities – the interconnected Business Model, Value Chain, Operating Model, and Culture through which the organisation creates value and operates. These elements are interconnected. Changes to one can affect the others and, together, alter the organisation’s capabilities and how it uses them.

The organisation’s Governing Logic influences the Enterprise System, shaping value creation, decision-making, authority, and operations. While analytically distinct, Governing Logic and the Enterprise System influence each other.

The constructs of the Enterprise System and Governing Logic are explored here.

When Organisational Change Becomes Necessary

Organisational change is necessary when the current Enterprise System cannot achieve the organisation’s goals.

If the required capabilities are clear and the Governing Logic remains appropriate, the organisation can achieve change by adapting elements of the Enterprise System. This explains the first part of the definition:

“…the adaptation of an organisation’s Enterprise System…”

Sometimes, the challenge is deeper. The principles shaping the Enterprise System may be outdated or uncertain. In these cases, the Governing Logic must be reconsidered. This explains the second part:

“…and, where necessary, its Governing Logic…”

The relationship between strategy and organisational change, explored here, is not always linear. When fundamental assumptions are questioned, exploration and learning may redefine required capabilities and inform ongoing strategy development. Organisational change links strategy to capability by adapting the Enterprise System and, if needed, its Governing Logic, enabling the organisation to better achieve its strategy and objectives.

Two Orders of Organisational Change

The distinction between the Enterprise System and Governing Logic underpins this website’s framework of two orders of organisational change.

If the organisation can develop the required capabilities by adapting the Enterprise System while the Governing Logic remains appropriate, it is undergoing First-Order Change. This changes operations without altering core principles and assumptions.

If the Governing Logic is no longer appropriate or its suitability is uncertain, the organisation faces Second-Order Change. This involves reconsidering the principles shaping the Enterprise System. Second-Order Change does not assume the Governing Logic will change; instead, exploration and learning determine if and how it should change.

This distinction is not based on scale, cost, complexity, or disruption. In this framework, it depends on the organisational level of change. Large, complex changes may still be First-Order, while Second-Order Change entails questioning the Governing Logic. The two constructs are explored here.

Organisational Change Enables Strategy Realisation

Organisational change and strategy realisation are closely linked but distinct. Organisational change adapts capabilities, while strategy is realised by putting those capabilities into use through Operational Continuity. This construct is further explored here.

Designing, developing, or implementing a new capability alone does not realise strategy. A new operating model, platform, or service becomes strategically important only when the organisation uses it operationally, and it contributes to its objectives.

This distinction does not depend on the formal end of a change initiative. Changed capabilities may enter Operational Continuity gradually, with benefits emerging as they are used, not just when the initiative concludes. The boundary between organisational change and Operational Continuity is conceptual, not strictly chronological. 

What Is Organisational Change Management?
If organisational change defines what is being adapted and why, organisational change management addresses how to achieve that adaptation. Within this website’s framework, Organisational Change Management is:

“The coordinated leadership, governance, design, delivery and change engagement through which organisational change is conceived, directed, implemented, adopted and sustained.”

Organisational change management is an enterprise activity that integrates leadership, decision-making, specialist practices, and delivery capabilities to achieve change. It is not limited to a single role, function, or practitioner.

Various practice areas contribute expertise to this activity. In this framework, these include Initiative Management, Change Architecture, and Change Engagement, all integrated and supported by the Enterprise Change Office.

Different Meanings of Change Management

The term Change Management has varying scopes. Consider how these differences affect what is included in the practice areas.

Explore The Distinction

Bringing the Definition Together

Organisational change adapts the Enterprise System and, where necessary, its Governing Logic to provide the capabilities the organisation requires.

Those capabilities enable strategy realisation through their use in Operational Continuity, while Organisational Change Management coordinates how the change is brought about.

Explore More

When Did Transformation Become Just Another Meaningless Buzzword

Transformation now describes almost every kind of change. This article examines how the term lost precision and proposes a more useful way of distinguishing between system change and genuinely transformational change.

Organisational Change Practice Areas

Organisational change is defined in many different ways. Explore the definition adopted by this website and the reasoning behind it.

From Strategy To Organisational Change

How strategic intent is translated into Business Needs, organisational-change priorities and the capabilities required to realise the organisation's objectives.
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The Potential Weaknesses Of An Organisational Change Playbook

Some of the potential weaknesses of an Organisational Change Playbook and possible mitigations are addressed below.

Potential Weakness Mitigation
Bureaucracy and unnecessary work Lean processes, proportionate governance, and only the documentation necessary.
Rigidity and reduced agility Explicit tailoring provisions, alternative approaches and professional judgement within defined governance boundaries.
False confidence in competence Defined competence requirements, appropriate training, specialist support, assurance and escalation arrangements.
Outdated or ineffective guidance Accountable stewardship, regular review, feedback from practice and evidence-based improvement.
Fragmentation and duplication A coherent process architecture linking activities, decisions, responsibilities, methods and information.
Limited use in practice Integrate with normal management activities, provide accessible guidance, set leadership expectations, and offer practical support.
Disproportionate costs Assess organisational need, develop incrementally, and evaluate the value delivered.

Figure best viewed on tablet or above

These mitigations reduce risks but do not guarantee Playbook effectiveness. Its value depends on the quality of underlying practices, user competence, and leadership’s willingness to address deficiencies.

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