The Enterprise Change Office

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Understanding The Governing Logic

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Contents
Definition

Within this website, organisational change is defined as:

“The adaptation of an organisation’s Enterprise System and, where necessary, its Governance Logic to support the achievement of its strategy and objectives.”

Consequently, organisational change management is defined as:

“The coordinated leadership, governance, delivery, and engagement activities through which organisational change is conceived, governed, delivered, adopted, and sustained.”

The concepts developed throughout these pages form an integrated framework in which each idea builds upon those that precede it. A shared understanding of organisational change provides the foundation needed to distinguish between different forms of change, explain how the framework fits together, and identify the organisational capabilities required to support effective change.

Alternative Definitions Of Organisational Change

Compare how leading organisations define the concept and understand why this website adopts its own definition.

From Strategy To Organisational Change

This website argues that all organisational change should ultimately be justified by strategic intent: either because it is required to pursue the organisation’s chosen direction or because changing circumstances require that direction, strategy or associated objectives to be reconsidered.

Strategy shapes what the organisation needs to be capable of doing. Where existing capabilities are sufficient, organisational change may not be necessary simply because strategy evolves. Where a gap emerges between the capabilities required and those currently available, organisational change may be needed. The nature of that gap, and the uncertainty surrounding what will be required, help determine the form that change should take.

The relationship is not entirely one-way. Strategy evolves through action and learning, while organisational change itself can generate evidence that changes the organisation’s understanding of the capabilities it requires and potentially influences its continuing strategy. 

These concepts are explored in greater detail here.

The Organisation's Governing Logic and Enterprise System

The definition above identifies the Enterprise System and Governing Logic as the potential objects of organisational change. The Enterprise System comprises Culture, Business Model, Value Chain and Operating Model, while Governing Logic describes the deeper principles and assumptions that shape enterprise-level choices.

Organisational change may involve adaptation of the Enterprise System while Governing Logic remains substantially intact or, where necessary, changes to Governing Logic itself. Understanding these two constructs is therefore fundamental to understanding what this website means by organisational change.

These concepts are explored in greater detail here.

Operational Continuity

Whilst the Enterprise System provides the capabilities required to create value, Operational Continuity exploits those capabilities through day-to-day activities. It is through Operational Continuity that customers are served, products and services are delivered, regulatory obligations are met, and value is created and delivered. Consequently, Operational Continuity is the primary mechanism by which strategy translates into tangible outcomes.

The concept of Operational Continuity is considered further here. The webpage also explores why the term Operational Continuity is preferred to the more commonly used phrase Business-As-Usual.

Governance Logic

Whilst the Enterprise Ecosystem describes how an organisation currently creates and delivers value, Governance Logic describes the underlying assumptions, principles, and decision-making mechanisms that shape how the organisation is directed and controlled. Governance Logic influences how resources are allocated, how authority is exercised, how risk is managed, how performance is assessed, and ultimately how organisational success is defined.

The concept of Governance Logic is explored further here.

The Two Orders of Organisational Change

Organisational change literature recognises that not all organisational change occurs at the same level. In some situations, change can be achieved by adapting elements of the Enterprise Ecosystem whilst preserving the existing Governance Logic. In other situations, the Governance Logic itself must change. This distinction gives rise to the concept of the Two Orders of Organisational Change:

Adapts elements of the existing Enterprise System whilst preserving the organisation’s underlying Governance Logic. Although processes, structures, technologies, capabilities, or ways of working may change, the fundamental assumptions about how the organisation creates value and governs itself remain intact. Most organisational change falls into this category because organisations continually refine and improve their capabilities without fundamentally redefining their identity or governing principles.

Occurs when the organisation’s existing Governance Logic is no longer capable of supporting its strategic needs. In these circumstances, the organisation must reconsider more fundamental questions concerning how value is created, delivered, governed, measured, or sustained. Rather than simply adapting elements of the Enterprise System, Second-Order Change challenges the assumptions that underpin the ecosystem itself and may result in a fundamentally different way of operating.

The distinction between the two orders of change is important because approaches that are effective for First-Order Change are not necessarily effective for Second-Order Change. Understanding which order of change is being undertaken, therefore, has significant implications for how change is led, governed, and executed.

The concepts of First-Order Change and Second-Order Change are explored further here.

Summary

Organisational change cannot be understood in isolation from strategy. Strategy establishes what the organisation is seeking to achieve, whilst the Enterprise Ecosystem provides the capabilities required to achieve it. Operational Continuity exploits those capabilities to create and deliver value, and Governance Logic provides the underlying assumptions and principles through which the organisation is directed and controlled.

When the existing Enterprise Ecosystem and Governance Logic are no longer sufficient to support the organisation’s strategic objectives, organisational change becomes necessary. Depending on the nature of the challenge being addressed, this may involve either adapting the existing ecosystem through First-Order Change or fundamentally reconsidering the underlying Governance Logic through Second-Order Change.

Read On

Why I Use The Term “Enterprise Change Office”

The term Enterprise Change Office is used to distinguish the broader organisational capability required to support organisational change.

The Enterprise Change Office

An Enterprise Change Office provides the enterprise capability needed to govern, coordinate, and continually develop organisational change by integrating multiple complementary practice areas.

A Definition Of Organisational Change

This website adopts a strategy-led framework that examines the relationships between strategy, the Enterprise System, Operational Continuity, Governance Logic, and the Two Orders of Organisational Change.
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Alternative Definitions Of Organisational Change

There is no single universally accepted definition of organisational change. Whilst the various perspectives offered by different authors provide valuable insights, they often emphasise particular aspects of organisations, including structures, processes, technology, people, culture, strategy or organisational performance.

Two such perspectives are:

Definition

Harvard Business School Online (HBSO) is the digital learning platform of Harvard Business School, offering interactive, case-based courses designed to make the school’s business education accessible to learners worldwide.

HBSO defines organisational change as:

“The actions in which a company or business alters a major component of its organization, such as company culture, the underlying technologies or infrastructure it uses to operate, or its internal processes.”

It defines organisational change management as:

“The process of guiding organizational change to a successful resolution.”

Source: What Is Organisational Change? (Retrieved 31 July 2026)

Commentary

The HBSO definition focuses on changes to major organisational components, including culture, technology, infrastructure and internal processes. Within the conceptual framework presented in daschange.info, this appears principally to describe what daschange.info terms complex First-Order Change, where an organisation deliberately modifies elements of its existing Enterprise System whilst operating within its existing Governance Logic.

The HBSO definition gives relatively little attention to the continual, incremental improvements within First-Order Change through which organisations refine their existing ways of working without fundamentally altering how they are governed or operated. Although individually modest, such developmental change needs to be recognised as it collectively consumes organisational resources, requires governance and prioritisation, and should remain aligned with organisational strategy.

Additionally, the HBSO definition does not explicitly address Second-Order Change, where the organisation questions and changes aspects of its underlying Governance Logic rather than simply modifying the systems, structures and processes that operate within it.

Accordingly, this website adopts a broader definition of organisational change that encompasses the spectrum of First-Order forms of organisational change and Second-Order change.

Definition

The Chartered Management Institute (CMI) is a leading professional body in the United Kingdom for management and leadership, dedicated to improving the quality and standards of management and leadership across organisations. A Royal Charter formally recognises that the organisation serves the public interest and has achieved a position of permanence, stability and distinction within its field.

CMI defines organisational change as:

“Accomplishing a transition from position A to position B and handling any problems which come up during the process. The process of change within organisations usually results from interactions between four major elements: equipment (technology); processes (working procedures); organisation structure; and people. Change to any one of these will inevitably lead to changes to the others, as organisations are complex inter-related systems.”

Source: Change Management (Retrieved 31 July 2026)

Commentary

The CMI definition describes managing change as moving an organisation from one state to another whilst recognising the interdependence of technology, processes, organisational structure and people. Within the conceptual framework presented by daschange.info, this appears to correspond to First-Order Change, where an organisation adapts elements of its existing Enterprise System whilst operating within its existing Governance Logic.

The definition  can be interpreted as  treating First-Order Change as a single category and does not explicitly distinguish among forms of First-Order Change that may, in themselves, require different governance, leadership, and delivery approaches.

Additionally, the CMI definition  does explicitly address Second-Order Change, where the organisation questions and changes aspects of its underlying Governance Logic rather than simply modifying the systems, structures and processes that operate within it.

Need to think about complex statements

Accordingly, the website daschange.info adopts a broader definition of organisational change that encompasses the spectrum of First-Order forms of organisational change and Second-Order change.

Categorisation Of First-Order Change

In reviewing the commentaries to each definition, it should be noted that within the conceptual framework adopted by daschange.info, organisations are encouraged to establish a small number of categories of First-Order Change. These categories will differ from enterprise to enterprise,  being determined by objective criteria such as complication, complexity, scale, uncertainty and strategic significance.

This categorisation provides a proportionate basis for selecting governance arrangements, leadership expectations, assurance activities and behavioural change engagement. Relatively straightforward initiatives may require only light-touch governance, whilst more demanding forms of First-Order Change may warrant significantly greater oversight and control. The objective is not to increase governance, but to ensure that governance remains proportionate to the characteristics and risks of the change being undertaken.

Why A Website Specific Definition

The purpose of the website, daschange.info, is not to determine a universally accepted definition of organisational change. Rather, it adopts a definition that provides a coherent conceptual framework for understanding organisational change as an enterprise capability. Throughout the Knowledge Base, the concepts, models and guidance are therefore developed consistently from this foundation.

Does First- and Second-Order Change Still Apply?

A valid question is whether these concepts, developed in a different era, remain relevant today. Organisations now operate in environments described as VUCA – Volatile, Complex, Nonlinear, and Continuously Changing. Recently, BANI – Brittle, Anxious, Nonlinear, and Incomprehensible – has joined VUCA in describing such conditions. Does thinking from the 1970s and 1980s still provide value?

These concepts remain useful because First-Order and Second-Order Change classify what is being changed, not the environment in which change occurs.

An organisation in a highly uncertain environment may continually adapt its processes, structures, technologies, and capabilities, while its underlying assumptions and principles remain intact. Regardless of the extent or complexity, such adaptations are considered First-Order Change as defined here.

At times, environmental changes may challenge these underlying assumptions. When an organisation must reconsider how it creates value, exercises authority, allocates resources, defines its identity, or manages accountability, it enters the realm of Second-Order Change.

This distinction does not require change to move neatly from one stable state to another. Continuous adaptation, experimentation, and emergence can all occur within First-Order Change. The distinction is analytical, focusing on what is changing rather than the timing or frequency of change.

The boundary between these types of change may not always be clear, especially when ongoing adaptation starts to challenge the organisation’s underlying assumptions. However, the distinction remains analytically valuable: it clarifies whether change occurs within the existing Governing Logic or if that logic itself is being reconsidered.

VUCA and BANI offer different ways to describe organisational environments, but they do not replace the need to ask a fundamental question: Are we changing the organisational system within its existing logic, or does that logic itself require reconsideration?

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 new state that emerges over time and is not fully known in advance.

This distinction is important because it makes transformation qualitatively different from continuous improvement or implementing a set organisational design. The three types of change are explored in Figure 2.

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

Figure 2: Ackerman’s Classification Of Change

On this website, daschange.info, Ackerman’s Developmental and Transitional Change are considered forms of First-Order System Change, while Transformational Change aligns with Second-Order Transformational Change. This mapping is an analytical interpretation provided by this website, and not part of Ackerman’s original model:

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

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 the concept of schemata could help explain different forms of organisational change.

Schemata are organising frameworks through which people 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 extended the distinction between First-Order and Second-Order Change by highlighting the importance of how organisational members interpret their environment. It demonstrated that fundamental change may require altering the shared frameworks through which organisational reality is understood, not just structures, processes, or behaviours.

Amir Levy and Second-Order Change

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

Levy (1986) distinguished between changes within an existing organisational framework and Second-Order Change, which involves more fundamental organisational transformation. He characterised Second-Order Change as multidimensional, multilevel, qualitative, and discontinuous, involving a shift in organisational paradigm.

Together with Uri Merry, Levy developed these ideas further in Levy and Merry (1986). Their work examined organisational transformation through a range of perspectives, including organisational paradigms, culture, myths, purpose and approaches to managing Second-Order Change.

Levy’s work was instrumental in defining organisational transformation as conceptually distinct from extensive or incremental change. Transformation involves a qualitative shift in the organisation and its underlying paradigm, not just the scale or quantity of changes.

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 was further developed and applied to organisational change by Levy, Bartunek, and Moch. Ackerman, meanwhile, introduced a related framework distinguishing Developmental, Transitional, and Transformational Change.

Watzlawick et al. provides an important conceptual foundation for the Two Orders of Organisational Change used within this website.

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