Leading Change

1
Leading Change

• John P. Kotter

2
Transforming OrganizationsWhy Firms Fail

• Allowing too much complacency
• Failing to create a sufficiently powerful guiding
  coalition
• Underestimating the power of vision
• Under-communicating the vision

3
Transforming OrganizationsWhy 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

4
Related Consequences

• New strategies arent implemented well
• Acquisitions dont achieve expected synergies
• Reengineering takes too long and costs too much
• Downsizing doesnt get costs under control
• Quality programs dont deliver hoped-for results

5
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

6
The Eight Stage Change Process

• Sense of Urgency
• Guiding Coalition
• Vision Strategy
• Communicating the Change Vision

• Empowering Action
• Generating Short-Term Wins
• Producing More Change
• Anchoring New Culture

7
1. Establishing a Sense of Urgency

• Examining the market and competitive realities
• Identifying and discussing crises, potential
  crises, or major opportunities

8
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

9
3. Developing a Vision and Strategy

• Creating a vision to help direct the change
  effort
• Developing strategies for achieving that vision

10
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

11
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

12
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

13
7. Consolidating Gains and Producing More Change

• Using increased credibility to change all
  systems, structures, and policies that dont fit
  together and dont 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

14
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

15
Management vs. Leadership

• Planning budgeting
• Organizing staffing
• Controlling problem-solving

• Establishing direction
• Aligning people
• Motivating inspiring

16
Sources of Complacency

• Absence of a major visible crisis
• Too many visible resources
• Low overall performance standards
• Organizational structures with narrow functional
  goals

17
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

18
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

19
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

20
Why Vision is Essential

• It clarifies the general direction for change
• It motivates people to take action in the right
  direction
• It helps coordinate the actions of different
  people

21
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

22
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

23
Communicating the Change Vision

• The magnitude of the task
• Keep it simple
• Use metaphors, analogies, and examples
• Use many different forums

24
Communicating the Change Vision

• Repeat, repeat, repeat
• Walk the Talk, or Lead by Example
• Explicitly address seeming inconsistencies
• Listen and be listened to

25
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

26
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

27
The Role of Short-Term Wins

• Undermine cynics and self-serve resistors
• Keep bosses on board
• Build momentum

28
A Successful Change Effort

• More change not less
• More help
• Leadership from senior management
• Project management and leadership from below
• Reduction of unnecessary interdependencies

29
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

30
Anchoring Change in Culture

• Comes last, not first
• Depends on results
• Requires a lot of talk
• May involve turnover
• Makes decisions on succession crucial

31
The Organization of the Future

• A persistent sense of urgency
• Teamwork at the top
• People who can create and communicate vision
• Broad-based empowerment

32
The Organization of the Future

• Delegated management for excellent short-term
  performance
• No unnecessary interdependence
• An adaptive corporate culture
• Getting from here to there

33
Mental Habits that Support Life-Long Learning

• Risk-taking
• Humble self-reflection
• Solicitation of opinions
• Careful listening
• Openness to new ideas