Leading Change

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Leading Change

• By John P. Kotter

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Why Firms Fail at Change

• Allowing too much complacency
• Having no powerful guiding coalition
• Underestimating the power of a vision
• Undercommunicating the vision
• Permitting obstacles to block the vision
• Failing to create short-term wins
• Declaring victory too soon
• Neglecting to anchor changes in the new culture

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Leading Change By John P. Kotter

• Create a Sense of Urgency
• Create a Guiding Coalition
• Develop a Vision and a Strategy
• Communicate the Change Vision
• Empower Employees for Broad-based Change
• Generate Short-term Wins
• Consolidate Gains and Produce More Change
• Anchor New Approaches in the Culture

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Case Study The Changing Hospital
Read the Case
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Stage 1

• Create a Sense of Urgency

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Sources of Complacency
The absence of a major and visible crisis
Too many visible resources
Too much happy talk from management
Human nature capacity for denial
Low overall performance standards
Complacency
A kill the messenger or low confrontation
culture
Org. Structures that focus employees on narrow
functional goals
A lack of sufficient performance feedback from
external sources
Internal measurement systems that focus on the
wrong indexes
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Ways to Raise Urgency Level

• create a crisis
• eliminate obvious examples of excess
• set goals so high that they cant be reached by
  business as usual
• stop measuring sub-unit performance. Measure
  broader indices of performance
• send more information about customer satisfaction
  and financial performance to more employees

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Ways to Raise Urgency Level (cont.)

• use consultants to force more relevant and honest
  discussions into management meetings
• put more honest discussions of company problems
  in newsletters and speeches
• bombard people with the upside opportunity of
  change (i.e., reward, future opportunities,
  etc..)
• insist that people talk regularly to unhappy
  customers, suppliers and shareholders

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Stage 2

• Create A Guiding Coalition

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Effective guiding coalitions have 4 key
characteristics

• Position power
• Expertise
• Credibility
• Leadership

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Building a Coalition

• Find the Right People
• power, expertise, and credibility
• leadership and management skills
• Create trust
• through planned off-site meetings
• With lots of dialogue and joint activity
• Develop a common goal
• sensible to the head
• appealing to the heart

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Case Study The Changing Hospital
Stage 1 2 Analysis
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Case Study The Changing HospitalStage 1 and 2
Analysis

• Stage 1
• What was done to create a sense of urgency for
  change?
• What could have been done?

• Stage 2
• What was done to form a group of people who would
  drive the change?
• what could have been done?

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Stage 3

• Develop a Vision and a Strategy

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(No Transcript)
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Six Characteristics of an Effective Vision

• Imaginable
• Desirable
• Feasible
• Focused
• Flexible
• Communicable

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Creating an Effective Vision

• initial first draft by an individual
• modified clarified by guiding coalition
• effective teamwork is essential
• process can be messy, difficult, and charged with
  emotion
• takes months or even years to formulate
• appeals to head and heart
• ends with direction that is desirable, feasible,
  focused, flexible and conveyed in 5 minutes or
  less

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Stage 4

• Communicate the Change Vision

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Key Elements in Effective Communication of Vision

• simplicity
• metaphor, analogy, example
• multiple forums
• repetition
• leadership by example
• explanation of inconsistencies
• two-way communication

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Case Study The Changing Hospital
Stage 3 4 Analysis
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Case Study The Changing HospitalStage 3 and 4
Analysis

• Stage 3
• What was done to develop a vision and strategy
  for change?
• What could have been done differently?

• Stage 4
• What was done to communicate the vision?
• What could have been done differently?

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Stage 5Empower Employees for Broad-based Change
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Barriers to Empowerment
Formal structures make it difficult to act
Bosses discourage actions aimed at
implementing new vision
A lack of needed skills undermines action
Employees understand vision and want to
assist, but are boxed in
Personnel and information systems make it
difficult to act
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Empowering People to Effect Change

• Communicate a sensible vision to employees
• Make structures compatible with the vision
• Provide the training employees need
• Align information and personnel systems to the
  vision
• Confront supervisors who undercut the needed
  change

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Stage 6

• Generate Short-Term Wins

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Characteristics of Effective ST Wins

• Its Visible
• people can see for themselves
• Its Unambiguous
• there is little argument over the call
• Its clearly related to the Change Effort
• they can see the relationship

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The Role of ST Wins

• provide evidence that sacrifices are worth it
• reward change agents with a pat on back
• help fine-tune vision and strategies
• undermine cynics and self-serving resisters
• keep bosses on board
• build momentum

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Case Study The Changing Hospital
Stage 5 6 Analysis
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Case Study The Changing HospitalStage 5 and 6
Analysis

• Stage 5
• How were people empowered to make the changes?
• What could have been done differently?

• Stage 6
• What possibilities for short-term successes were
  set-up?
• What could have been done differently?

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Stage 7

• Consolidate Gains and Produce More Change

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Successful Stage 7 Change

• more change, not less. Use credibility
• more help is solicited and developed
• leadership from senior management
• project management and leadership from below
• reduction of unnecessary interdependencies

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Stage 8

• Anchor New Approaches in the Culture

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Anchoring Change in the Culture

• culture change comes last, not first
• new approaches sink in only after its clear they
  work
• requires a lot of talk about the validity of the
  new practices
• may involve turnover
• make succession decisions that are
  culture-compatible

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Case Study The Changing Hospital
Stage 7 8 Analysis
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Case Study The Changing HospitalStage 7 and 8
Analysis

• Stage 7
• What was done to consolidate the successes and
  produce more change?
• What could have been done differently?

• Stage 8
• What was done to formalize and institutionalize
  the change?
• What could have been done differently?

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Leading Change BY John P. Kotter

• Create a Sense of Urgency
• Create a Guiding Coalition
• Develop a Vision and a Strategy
• Communicate the Change Vision
• Empower Employees for Broad-based Change
• Generate Short-term Wins
• Consolidate Gains and Produce More Change
• Anchor New Approaches in the Culture