The Importance of Managing Transition in the Workplace

This article is an excerpt from the Shortform book guide to "Managing Transitions" by William Bridges and Susan Bridges. Shortform has the world's best summaries and analyses of books you should be reading.

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What is the importance of managing transitions in the workplace? How can you handle change with grace?

Organizational leaders must learn how to manage transitions effectively. Susan and William Bridges’s book Managing Transitions says it’s important that everyone is on the same page during the transition, which is largely a leader’s job.

Read below to learn why you need to effectively manage transitions in the workplace.

The Importance of Managing Transition

Simply put, organizational leaders must learn to manage transition because every organization experiences transition. All organizations will naturally change throughout their lifetime as they grow from an idea to a start-up to an established company. Managing transition in the workplace in an effective manner is critical if an organization is to move successfully from one stage of its evolution to the next.

(Shortform note: William and Susan Bridges emphasize the importance of managing people through the stages of organizational growth. Implicit in their argument is the importance of broader cultural change during these periods of transition: Get enough people (or the right people) on board, and it triggers the necessary cultural change for the organization to evolve. But just like internal psychological transitions, cultural change can’t be mandated. People may grudgingly accept a mandated change, but they will lack the optimism, creativity, and excitement that are necessary to ensure the change is successful and long-lasting.)

The Stages of an Organizational Life Cycle

According to the authors, all organizations evolve through a predetermined set of stages. As organizations evolve, each transition will require a closing out of the previous phase, a bridge to the next, and an emerging into the subsequent phase.

William and Susan Bridges outline seven stages of an organization’s life cycle:

Ideating: Ideas are thrown around before becoming reality.
Taking Off: The idea is now a reality. Though the organization exists, there are very few systems and a lot is still uncertain.
Settling In: Roles, policies, and systems get more clearly defined and formalized. The day-to-day of the organization becomes more organized and predictable.
Achieving: The organization has reached maturity and is a competitive player in its market with potential for expansion.
Becoming Established: The organization becomes a household name in its field with a strong reputation. Dramatic changes are less frequent and there is little motivation to disrupt the status quo.
Stagnating: Complacency results in the organization failing to adapt and evolve. The organization stops actively reacting to its environment and, as a result, becomes less relevant and competitive.
Ending: The organization ceases to exist—either because it folds, or is broken apart, sold, and no longer recognizable.

Revitalization: The organization re-enters the ideation phase and reimagines the way it does business, allowing it to continue to evolve and start the organizational life cycle anew.

An organization’s life cycle doesn’t have to end in failure. A company has the potential to experience a rebirth (or revitalization) depending on how leaders handle the transitions involved.

The History of the Organizational Life Cycle Model

The organizational life cycle model grew out of the study of life cycles in the natural world. The first example of nature as a metaphor for organizational development can be traced all the way back to 1890 when Alfred Marshall compared the growth of companies to that of “trees of the forest.” However, many attribute the organizational life cycle (OLC) model we use today to Mason Haire’s work in Modern Organizational Theory, published in 1959. Since then, the concept of organizational life cycle has gone through many iterations.

While the concept of organizational life cycle is still broadly used by organizational consultants and leaders to predict potential opportunities and challenges based on the company’s development stage, some researchers question the continued relevance of the model.

A 2021 article published in the Journal of Organizational Design suggests that the current model is too simplistic and over-determines the importance of growth as a factor of success. The authors argue instead that companies evolve differently, regardless of size, and that an “evolutionary” model would more accurately reflect the unpredictable paths companies take in response to their environment. Unlike the more prescriptive OLC model, an evolutionary model is more flexible and focuses on an organization’s ability to adapt based on the changing environment.

The Process of Revitalization

According to the authors, the biggest transition an organization can go through is the process of revitalization. Organizational revitalization is the alternative to failure. It starts the organizational life cycle over again, so instead of stagnating and going out of business, the organization chooses to respond to change strategically and reimagine how it does business. If you can successfully manage the transitions involved in a revitalization process, your business can continue to thrive.

Consider the example of Lego, the Danish toy company. When Jørgen Vig Knudstorp took over as CEO in 2004, the company was facing declining sales. He recognized that the company needed a revitalization, but he also understood that that process would require managing transition in the workplace. Vig Knudstorp focused on building relationships with employees throughout the organization before implementing any dramatic changes.

Once he gained the trust of his team, he worked with them to clarify the company’s mission and vision. Like previous CEOS, Vig Knudstorp’s willingness to reimagine how the company does business and guide his team thoughtfully through that transition has enabled Lego to continue to survive and thrive in the global marketplace.

(Shortform note: In Hit Refresh, Microsoft CEO Satya Nadella offers another strong example of the power of a well-managed revitalization process to sustain an organization. In 2014, Microsoft was lagging behind its competitors. When Satya Nadella took over as CEO, he worked collaboratively with his team to reimagine the company–clarifying the company’s mission, transforming the corporate culture, and promoting innovation, resulting in huge success for the company. Through his intentional change management, Microsoft saw a market capitalization of $1.6 trillion.)

The Importance of Managing Transition in the Workplace