How are leadership roles affected by different circumstances? Let's discuss the different types of change that occur in organizations, the context of change and how the leaders role affects change implementation. Do you know the importance of first order and second order change? Understanding the difference between the two will help you identify what types of strategies you can use to implement the changes your organization needs. First order changes are changes that don't really affect the end result, but they may affect a process or method of doing something. For example, if you were to change the type of information technology system that your accounting department uses, this would be a first order change. This is because you aren't changing the end result, which would be the output of the accounting information. You're simply changing the process that gets the task done. A second order change is a much larger change than a first order change. And often it's more difficult for the people to accept. This type of change might involve changing the organization's vision or maybe changing its structure to meet business needs. It can also involve going in a completely different direction with the business model or strategy. This is often called transformational, revolutionary or radical change. There may be times when leaders will implement first order changes to solve problems when a second order change would actually be the best solution. If that happens a lot of time and money is wasted in an attempt to solve problems that actually need a bigger change, a second order change. Let's look at an example of a second order change. Suppose a company sold a product that had declining demand over the past few years. To slow this decline, the company leaders implemented the following measures, lowering the item's price, spending more of their marketing budget on social media marketing and switching product manufacturers to produce a better quality item. Let's assume that the product only saw small increases in demand with these changes, but the company also saw lower profit because of the lowered price and the additional funds spent on their marketing budget. All these changes are first order changes. That is changes that didn't really stick or solve the problem of lowered product demand. This company needs a second order change, a big change to help solve their problem. A second order change is needed when, the solution doesn't actually solve the problem. There are multiple reasons why the problem is occurring and other problems are caused by implementing the first order solution. The organization now needs to implement a second order change to solve the problem. Maybe they drop the product from the product line, or perhaps they innovate and completely change the product. Now that you know the difference between a first order change and a second order change, let's look at how the change determines the context of leadership.