Leading Change

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Leading Change

• Why Transformation Efforts Fail

Hooman Mehrdadi
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Outline

• The research
• Eight common mistakes
• Lessons to be learned

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The research

• More than 100 companies with different
  characteristics have been studied.
• The efforts have gone under many names.
• The result of changes

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The research

• In almost every case the basic goal was
• to make fundamental changes in how business is
  conducted in order to help cope with a new, more
  challenging market environment

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Error 1 Not establishing a great enough sense
of urgency

• How most successful changes begin.
• Crises, potential crises or great opportunities.
• Over 50 have failed in phase 1,because of
• Underestimate motivating people.
• Overestimate their success.
• Lack of patience.
• A paralyzed senior management.

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Error 1 Not establishing a great enough sense
of urgency

• The need for a leader, CEO or division manager.
• Bad business results are both a blessing and
  curse in first phase.
• An almost universal tendency to shoot the bearer
  of bad news.
• When is the urgency high?

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Error2 not creating a powerful enough guiding
coalition

• In most successful cases coalition is always
  pretty powerful.
• Senior management always forms core of the group.
• More than high sense of urgency is required.
• Reasons for failing
• No history of teamwork at top.
• Expecting the team to be led by a staff executive.

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Error3 lacking a vision

• In very successful cases, coalition develops a
  picture of future.
• A vision says something that helps clarify the
  direction in which an organization needs to move.
• A list of confusing and incompatible projects.
• A useful rule of thumb.

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Error4 Undercommunicating the vision

• Three patterns with respect to communication
• Holding single meeting or sending out a single
  communication.
• Making speeches to group of employees.
• Newsletters and speeches.
• Particularly challenging in case of short term
  sacrifices.
• Walk the talk, nothing undermines change more
  than wrong behavior by important individuals.

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Error5 not removing obstacles to the new vision

• Emboldened employees.
• Obstacles for employees
• Narrow job definitions.
• Compensation and appraisal systems.
• The action is essential both to empower others
  and to maintain the credibility of change effort.

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Error6 not systematically planning for and
creating short term wins

• Most people go on a long march unless
• In one or two years you should find
• Quality beginning to go up.
• Decline in net income stopping.
• Product introduction.
• Upward shift in market share.
• In successful cases manager actively plan to
  achieve objectives. They dont hope for.
• The benefits of commitments to produce short-term
  wins.

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Error7 declaring victory too soon.

• New approaches are fragile and subject to
  regression.
• Ironically, it is often a combination of change
  initiators and change resistors that creates the
  premature victory.
• What, instead of declaring premature victory.

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Error8 not anchoring changes in the
corporations culture.

• In the final analysis changes sticks when it
  becomes the way we do things around here
• Two factor in institutionalizing change
• To show people , the effects of new approaches.
• Make sure that next generation of top management
  will personify the new approach.

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Lessons to be learned

• Change process goes through a series of phases.
• Critical mistakes in any of the phases can have
  devastating impacts.
• A fewer errors can spell the difference between
  success and failure.

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Reference

• John P. Kotter, Leading Change, Why
  Transformation Efforts Fail, HBR , April 1995.

Thanks for your attention