Kotter – 8 Steps Leading Change

Guiding change may be the ultimate test of a leader – no business survives over the long term if it can’t reinvent itself. But, human nature being what it is, fundamental change is often resisted mightily by the people it most affects: those in the trenches of the business. Thus, leading change is both absolutely essential and incredibly dif? cult. Perhaps nobody understands the anatomy of organizational change better than retired Harvard Business School professor John P Kotter. This article, . originally published in the spring of 1995, previewed Kotter’s 1996 book Leading Change.

It outlines eight critical success factors – from establishing a sense of extraordinary urgency, to creating short-term wins, to changing the culture (“the way we do things around here”). It will feel familiar when you read it, in part because Kotter’s vocabulary has entered the lexicon and in part because it contains the kind of home truths that we recognize, immediately, as if we’d always known them. A decade later, his work on leading change remains de nitive.

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Leading Change Why Transformation Efforts Fail Leaders who successfully transform businesses do eight things right (and they do them in the right order). y John P. Kotter O I have watched more than 100 companies try to remake themselves into signi? cantly better competitors. They have included large organizations (Ford) and small ones (Landmark Communications), companies based in the United States (General Motors) and elsewhere (British Airways), corporations that were on their knees (Eastern Airlines), and companies that were earning good money (Bristol-Myers Squibb). These efforts have gone under many banners: total quality management, reengineering, rightsizing, restructuring, cultural change, and turnaround.

But, in almost every case, the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment. A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale. The lessons that can be drawn are interesting and will probably be relevant to even more organizations in the increasingly competitive

The most general lesson to be learned from the more successful cases is that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result. A second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hardwon gains. Perhaps because we have relatively little experience in renewing organizations, even very capable people often make at least one big error.

Not Establishing a Great Enough Sense of Urgency Most successful change efforts begin when some individuals or some groups start to look hard at a company’s competitive situation, market position, technological trends, and nancial performance. They focus on the potential revenue drop when an important pat- ent expires, the  ve-year trend in declining margins in a core business, or an emerging market that everyone seems to be ignoring. They then  nd ways to communicate this information broadly and dramatically, especially with respect to crises, potential crises, or great opportunities that are very timely.

This  rst step is essential because just getting a transformation program started requires the aggressive cooperation of many individuals. Without motivation, people won’t help, and the effort goes nowhere. Compared with other steps in the change process, phase one can sound easy. It is not. Well over 50% of the companies I have watched fail in this  rst phase. What are the reasons for that failure? Sometimes executives underestimate how hard it can be to drive people out of their comfort zones. Sometimes they grossly overestimate how successful they have already been in increasing urgency.

Sometimes they lack patience: “Enough with the preliminaries; let’s get on with it. ” In many cases, executives become paralyzed by  the downside possibilities. They worry that employees with seniority will become defensive, that morale will drop, that events will spin out of control, that short-term business results will be jeopardized, that the stock will sink, and that they will be blamed for creating a crisis. A paralyzed senior management often comes from having too many managers and not enough leaders. Management’s mandate is to minimize risk and to keep the current system operating.

Change, by de nition, requires creating a new system, which in turn always demands leadership. Phase one in a renewal process typically goes nowhere until enough real leaders are promoted or hired into senior-level jobs. Transformations often begin, and begin well, when an organization has a new head who is a good leader and who sees the need for a major change. If the renewal target is the entire company, the CEO is key. If change is needed in a division, the division general manager is key.

Bad business results are both a blessing and a curse in the  rst phase. On the positive side, losing money does catch people’s attention. But it also gives less maneuvering room. With good business results, the opposite is true: Convincing people of the need for change is much harder, but you have more resources to help make changes.

But whether the starting point is good performance or bad, in the more successful cases I have witnessed, an individual or a group always facilitates a frank discussion of potentially unpleasant facts about new competition, shrinking margins, decreasing market share,  at earnings, a lack of revenue growth, or other relevant indices of a declining competitive position. Because there seems to be an almost universal human tendency to shoot the bearer of bad news, especially if the head of the organization is not a change champion, executives in these companies often rely on outsiders to bring unwanted information.

Wall Street analysts, customers, and consultants can all be helpful in this regard. The purpose of all this activity, in the words of one former CEO of a large European company, is “to make the status quo seem more dangerous than launching into the unknown. ” In a few of the most successful cases, a group has manufactured a crisis. One CEO deliberately engineered the largest accounting loss in the company’s history, creating huge pressures from Wall Street in the process. One division president commissioned  rst-ever customer satisfaction surveys, knowing full well that the results would be terrible.

He then made these  ndings public. On the surface, such moves can look unduly risky. But there is also risk in playing it too safe: When the urgency rate is not pumped up enough, the transformation process cannot succeed, and the longNow retired, John P Kotter was the Kono.  When is the urgency rate high enough? From what I have seen, the answer is when about 75% of a company’s management is honestly convinced that business as usual is totally unacceptable. Anything less can produce very serious problems later on in the process.

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Kotter – 8 Steps Leading Change. (2016, Dec 18). Retrieved from https://graduateway.com/kotter-8-steps-leading-change/