Leading Change

John P. Kotter

Transforming Organizations:Why Firms Fail

Allowing too much complacency

Failing to create a sufficiently powerful guiding coalition

Underestimating the power of vision

Under-communicating the vision

Transforming Organizations:Why Firms Fail

Permitting obstacles to block the new vision

Failing to create short term wins

Declaring victory too soon

Neglecting to anchor changes firmly in the corporate culture

Related Consequences

New strategies aren’t implemented well

Acquisitions don’t achieve expected synergies

Reengineering takes too long and costs too much

Downsizing doesn’t get costs under control

Quality programs don’t deliver hoped-for results

Successful Change and The Force that Drives it

Globalization of markets & competition

The Eight Stage change process

The importance of Sequence

Projects within projects

Management versus Leadership

The Eight Stage Change Process

1. Sense of Urgency

2. Guiding Coalition

3. Vision & Strategy

4. Communicating the Change Vision

5. Empowering Action

6. Generating Short-Term Wins

7. Producing More Change

8. Anchoring New Culture

1. Establishing a Sense of Urgency

Examining the market and competitive realities

Identifying and discussing crises, potential crises, or major opportunities

2. Creating the Guiding Coalition

Putting together a group with enough power to lead the change

Getting the group to work together like a team

3. Developing a Vision and Strategy

Creating a vision to help direct the change effort

Developing strategies for achieving that vision

4. Communicating the Change Vision

Using every vehicle possible to constantly communicate the new vision and strategies

Having the guiding coalition role model the behavior expected of employees

5. Empowering Broad-Based Action

Getting rid of obstacles

Changing systems or structures that undermine the change vision

Encouraging risk taking and non-traditional ideas, activities, and actions

6. Generating Short-Term Wins

Planning for visible improvements in performance, or “wins”

Creating those wins

Visibly recognizing and rewarding people who made the wins possible

7. Consolidating Gains and Producing More Change

Using increased credibility to change all systems, structures, and policies that don’t fit together and don’t fit the transformation vision

Hiring, promoting, and developing people who can implement the change vision

Reinvigorating the process with new projects, themes, and change agents

8. Anchoring New Approaches in the Culture

Creating better performance through customer- and productivity-oriented behavior, more and better leadership, and more effective management

Articulating the connections between new behaviors and organizational success

Developing means to ensure leadership development and succession

Management vs. Leadership

Planning & budgeting

Organizing & staffing

Controlling & problem-solving

Establishing direction

Aligning people

Motivating & inspiring

Sources of Complacency

Absence of a major & visible crisis

Too many visible resources

Low overall performance standards

Organizational structures with narrow functional goals

Sources of Complacency

Internal measurement systems focusing on wrong performance indexes

Lack of sufficient external feedback

Human nature, with its capacity for denial

Too much happy talk from senior management

Establishing a Sense of Urgency

Pushing up the urgency level

The role of crises

The role of middle and lower-level managers

How much urgency is enough

Creating a Guiding Coalition

Find the Right People Position power, expertise, & creditability Strong leadership & management skills

Create Trust Through carefully planned off-site events With lots of talk and joint activities

Develop a Common Goal Sensible to the head Appealing to the heart

Why Vision is Essential

1. It clarifies the general direction for change

2. It motivates people to take action in the right direction

3. It helps coordinate the actions of different people

Characteristics of an Effective Vision

Imaginable – conveys a picture of what the future will look like

Desirable – appeals to the long-term interests of employees & stakeholders

Feasible – comprises realistic and attainable goals

Characteristics of an Effective Vision

Focused – is clear enough to provide guidance in decision-making

Flexible – is general enough to allow individual initiative & alternate responses

Communicable – is easy to communicate; can be successfully explained in 5 minutes

Communicating the Change Vision

The magnitude of the task

Keep it simple

Use metaphors, analogies, and examples

Use many different forums

Communicating the Change Vision

Repeat, repeat, repeat

Walk the Talk, or Lead by Example

Explicitly address seeming inconsistencies

Listen and be listened to

Empowering Employees for Action

Removing structural barriers

Providing needed training

Aligning systems to the vision

Dealing with troublesome supervisors

Tapping an enormous source of power

The Role of Short-Term Wins

Provide evidence that sacrifices are worth it

Reward change agents with a pat on the back

Help fine-tune vision and strategies

The Role of Short-Term Wins

Undermine cynics and self-serve resistors

Keep bosses on board

Build momentum

A Successful Change Effort

More change; not less

More help

Leadership from senior management

Project management and leadership from below

Reduction of unnecessary interdependencies

Why Culture is so Powerful

Individuals are selected and indoctrinated so well

The culture exerts itself through the actions of many, many people

All of this happens without much conscious intent and thus is difficult to challenge or even discuss

Anchoring Change in Culture

Comes last, not first

Depends on results

Requires a lot of talk

May involve turnover

Makes decisions on succession crucial

The Organization of the Future

A persistent sense of urgency

Teamwork at the top

People who can create and communicate vision

Broad-based empowerment

The Organization of the Future

Delegated management for excellent short-term performance

No unnecessary interdependence

An adaptive corporate culture

Getting from here to there…

Mental Habits that Support Life-Long Learning

Risk-taking

Humble self-reflection

Solicitation of opinions

Careful listening

Openness to new ideas