Winning at Change
by John P. Kotter
Leader to Leader, No. 10 Fall
organization today -- large or small, local or global -- is
immune to change. To cope with new technological,
competitive, and demographic forces, leaders in every sector
have sought to fundamentally alter the way their organizations
do business. These change efforts have paraded under many
banners -- total quality management, reengineering,
restructuring, mergers and acquisitions, turnarounds.
O
Yet according to most assessments, few of these efforts
accomplish their goals. Fewer than 15 of the 100 or more
companies I have studied have successfully transformed
themselves. The particulars of every case vary, but I have
found that the change process involves eight critical stages
(see box). Mismanaging any one of these steps can undermine
an otherwise well conceived vision, but four mistakes in
particular are the source of most failures.
Thought
Leaders
Forum:
John P.
Kotter
John P. Kotter is
Konosuke Matsushita
Professor of Leadership at
Harvard Business School
and a frequent speaker at
top management meetings
around the world. He is the
author of six best-selling
books, including Leading
Change and A Force for
Change: Leadership Differs
from Management. His
most recent is Matsushita
Leadership. (9/98)
1. Writing a memo instead of lighting a fire. At least half
More on John P. Kotter
of failed change efforts bungle the first critical step establishing a sense of urgency. Too often leaders
This article
is Chapter
launch their initiatives by calling a meeting or
9 in Leader
circulating a consultant's report, then expect people to
to Leader.
rally to the cause. It doesn't happen that way. To
See the
complete
increase urgency, I suggest you gather a key group of
contents.
people for a day-long retreat. First, identify every
possible factor that contributes to complacency. If you From Leader to Leader,
No. 10 Fall 1998
work at it, you will come up with 25 to 50. Then
brainstorm specific ways to counter each factor.
• Table of
Finally, develop an action plan to implement your
Contents
• From the
ideas. If you attack all 25 or 50 items, your chances of
Editors
creating a sense of urgency -- and building necessary
• Resources
momentum -- improve immeasurably. However, the
effort involved in creating a sense of urgency is
usually several times what leaders expect. They slide
Additional resources for
through this first crucial step, and when the effort stalls this article
six months later, they wonder why.
2. Talking too much and saying too little. Most leaders undercommunicate their
change vision by a factor of 10. And the efforts they do make to convey their
message are of the least convincing variety -- speeches and memos. An effective
change vision must include not just new strategies and structures but also new,
aligned behaviors on the part of senior executives. Leading by example means
just that -- spending dramatically more time with customers, cutting wasteful
spending in the executive suite, or pulling the plug on a pet project that doesn't
measure up. People watch their bosses -- particularly their immediate bosses -very closely. It doesn't take much in the way of inconsistent behavior by a
manager to fuel the cynicism and frustration of his or her direct reports.
3. Declaring victory before the war is over. When a project is completed or an initial
goal met, it is tempting to congratulate all involved and proclaim the advent of a
new era. While it is important to celebrate results along the way, kidding yourself
or others about the difficulty and duration of organizational transformation can be
catastrophic. I met recently with a capable, intelligent management group that has
begun to see encouraging results in a difficult initiative. They are only six months
into what is probably a three-year process -- but are already talking about
"wrapping this thing up in a few months." Such talk is nonsense. They are far
from where they need to be, and in danger of losing the ground they have gained.
People look forward to completion of any task. The problem is, the results of a
change vision are not directly proportional to the effort invested. That is, one-third
of your way into a change process, you are unlikely to see one-third of the
possible results; you may see only 1/10th of the possible results. If you settle for
too little too soon, you will probably lose it all. Celebrating incremental
improvements is a great way to mark progress and sustain commitment -- but
don't forget how much work is still to come.
4. Looking for villains in all the wrong places. The perception that large
organizations are filled with recalcitrant middle managers who resist all change is
not only unfair but untrue. In professional service organizations, and in most
organizations with an educated workforce, people at every level are engaged in
change processes. Often it's the middle level that brings issues to the attention of
senior executives. In fact, I have found that the biggest obstacles to change are not
middle managers but, more often, those who work just a level or two below the
CEO -- vice presidents, directors, general managers, and others who haven't yet
made it to "the top" and may have the most to lose in a change. That's why it is
crucial to build a guiding coalition that represents all levels of the organization.
People often hear the president or CEO cheerleading a change and promising
exciting new opportunities. Most people in the middle want to believe that; too
often their managers give them reasons not to.
These common mistakes suggest three key tasks for change leaders: managing multiple
time lines, building coalitions, and creating a vision.
Managing Multiple Time Lines
establish a sense of urgency and avoid declaring premature victory leaders must
manage a key strategic resource -- time. Responding quickly while also accepting the
long-term nature of the change process sounds like a paradox. But effective leaders make
O
it clear that meaningful change takes years. At the same time, they create shorter term
wins and continuously remind people that the need for change is urgent precisely because
it takes so long. When, for example, Konosuke Matsushita started the Matsushita Institute
of Government and Management -- his graduate school for people who want to go into
public service -- he explained that his vision was to help Japanese politics become less
corrupt and more visionary. When a skeptical reporter asked how long that would take,
he said, "In my judgment, about 400 years -- which is why it's so important that we start
today."
The best leaders that I have known balance short-term results with long-term vision.
(When it comes to organizational change, I define short-term as six to 12 months.) They
engage directors, investors, employees, and other constituents in the excitement of
delivering both long- and short-term results. They operate in multiple time frames.
Results and vision can be plotted on a matrix that has four dimensions (see figure). Poor
results and weak vision spell sure trouble for any organization. Good short-term results
with a weak vision satisfy many organizations -- for awhile. A compelling vision that
produces few results usually is abandoned. Only good short-term results with an
effective, aligned vision offer a high probability of sustained success.
Some leaders fear they have too little time to manage long-term change and therefore
focus only on quarterly or annual results. Yet many now reach senior leadership positions
at age 50 or younger and have an opportunity to lead a number of transformations
necessary to long-term leadership. Jack Welch, for instance, has led at least three major
change visions at GE. Of course, he had the benefit of starting early and keeping his job a
long time -- but he has kept the job precisely because he made organizational change an
ongoing, multiphase process.
Transforming an organization is the ultimate test of leadership, but understanding the
change process is essential to many aspects of a leader's job. Two skills in particular -building coalitions and creating a vision -- are especially relevant to our times.
Building Coalitions
today's less hierarchical but more complex organizations, leaders must win the support
of employees, partners, investors, and regulators for many types of initiatives. Because
you are likely to meet resistance from unexpected quarters, building a strong guiding
coalition is essential. There are three keys to creating such alliances.
N
Engaging the right talent. Coalition building is not simply reaching out to whoever
happens to be "in charge" of a department, organization, or other constituency; it is
assembling the necessary skills, experience, and chemistry as well. A coalition of 20
people who are decent managers but ineffective leaders is unlikely to create meaningful
change -- or much else that is new. You don't necessarily start with the president or CEO
as your partner; it may be the executive vice president who brings more to the party, and
yet still connects you to the line organization. The most effective partners usually have
strong position power, broad experience, high credibility, and real leadership skill.
Growing the coalition strategically. Like a good board of directors, an effective guiding
coalition needs a diversity of views and voices. Once a core group coalesces, the
challenge is how to expand the scope and complexity of the coalition. It often means
working with people outside your organization -- even for an internal change effort.
Leaders must not only reach beyond the confines of their enterprise but also know where
and how to build support. That may mean, for instance, giving others credit for success,
but accepting blame for failures oneself. It means showing a genuine care for individuals
but a toughmindedness about results -- getting results being the best way to recruit allies.
Working as a team, not just a collection of individuals. Leaders often say they have a
team when in fact they have a committee or a small hierarchy. The more you do to
support team performance, the healthier will be the guiding coalition and the more able it
will be to achieve its goals. Especially during the stress of change, leaders throughout the
enterprise need to draw on reserves of energy, expertise, and, most of all, trust. Personnel
problems often lurking beneath the surface of a team -- all too easily ignored during
placid times -- come to the fore during times of change. The pressures of transformation
make a strong team essential. Beyond the customary team-building retreats and events,
real teams are built by doing real work together, sharing a vision, and commitment to a
goal.
Creating a Vision
by example is essential to communicating a vision. But
A vision of the future is
more emotional than
how do you actually build a vision? Because it relates to the
rational.
future, people assume that vision building should resemble the
long-term planning process: design, organize, implement. I have never seen it work that
way. Defining a vision of the future does not happen according to a timetable or
flowchart. It is more emotional than rational. It demands a tolerance for messiness,
ambiguity, and setbacks, an acceptance of the half-step back that usually accompanies
every step forward.
EADING
Day-to-day demands inevitably pull people in different directions. Conflict is inevitable.
Having a shared vision does not eliminate tension between, say, sales and manufacturing
groups, but it does help people make appropriate trade-offs. The alternative is to bog
down in I-win, you-lose fights that can paralyze an organization. Thus, leaders must
convey a vision of the future that is clear in intention, appealing to stakeholders, and
ambitious yet attainable. Effective visions are focused enough to guide decision making
yet are flexible enough to accommodate individual initiative and changing circumstances.
For example, this narrowly defined but effective change vision was developed by the
operations group of a financial services company: "We want to reduce our costs by 30
percent and increase the speed with which we respond to customers by 40 percent. When
this is completed, in approximately three years, we will have ... better satisfied customers,
increased revenue growth, more job security, and the enormous pride that comes from
great accomplishment."
Traits of Effective Leaders
exist at all levels of an organization. At the edges of the enterprise, of course,
leaders are accountable for less territory. Their vision may sound more basic; the number
of people to motivate may be two. But they perform the same leadership role as their
more senior counterparts. They excel at seeing things through fresh eyes and at
challenging the status quo. They are energetic and seem able to run through, or around,
obstacles.
EADERS
I have found that people who provide great leadership are also deeply interested in a
cause or discipline related to their professional arena. A leader in a pharmaceutical firm,
for example, might have a passion for reducing suffering. He or she may have watched a
parent or loved one suffer, and be motivated by deep emotions, not just intellect. Such
leaders also tap deep convictions of others and connect those feelings to the purpose of
the organization; they show the meaning of people's everyday work to that larger
purpose.
However, the most notable trait of great leaders, certainly of great Great leaders continue
to take risks.
change leaders, is their quest for learning. They show an
exceptional willingness to push themselves out of their own
comfort zones, even after they have achieved a great deal. They continue to take risks,
even when there is no obvious reason for them to do so. And they are open to people and
ideas, even at a time in life when they might reasonably think -- because of their
successes -- that they know everything. Often they are driven by goals or ideals that are
bigger than what any individual can accomplish, and that gap is an engine pushing them
toward continuous learning.
Leaders invest tremendous talent, energy, and caring in their change efforts, yet few see
the results they had hoped for. But there is a good reason why so few organizations have
transformed themselves. Today's leaders simply don't have much practice at large-scale
change. Thirty years ago few organizations were thinking about radical reinvention, so
there is little practical experience to be passed on to a new generation of managers. The
good news is, the percentages are bound to improve. The kinds of changes routinely
undertaken by today's organizations -- producing ever better products, more quickly, at
ever lower cost -- were unimaginable 30 years ago. Over the next decade, thousands of
leaders will guide equally remarkable changes. That is more than a safe prediction; it is a
social and economic necessity. All institutions need effective leadership, but nowhere is
the need greater than in the organization seeking to transform itself.
Eight Steps to Transform Your Organization
1. Establish a Sense of Urgency


Examine market and competitive realities
Identify and discuss crises, potential crises, or major opportunities
2. Form a Powerful Guiding Coalition


Assemble a group with enough power to lead the change effort
Encourage the group to work as a team
3. Create a Vision


Create a vision to help direct the change effort
Develop strategies for achieving that vision
4. Communicate the Vision

Use every vehicle possible to communicate the new vision and strategies Teach
new behaviors by the example of the guiding coalition
5. Empower Others to Act on the Vision



Get rid of obstacles to change
Change systems or structures that seriously undermine the vision
Encourage risk taking and nontraditional ideas, activities, and actions
6. Plan for and Create Short-Term Wins



Plan for visible performance improvements
Creating those improvements
Recognize and reward employees involved in the improvements
7. Consolidate Improvements and Produce Still More Change



Use increased credibility to change systems, structures, and policies that don't fit
the vision
Hire, promote, and develop employees who can implement the vision
Reinvigorate the process with new projects, themes, and change agents
8. Institutionalize New Approaches


Articulate the connections between the new behaviors and organizational success
Develop the means to ensure leadership development and succession
Return to reference
The Ways Change Happens
Organizations change of necessity and for a variety of reasons. But the single biggest
impetus for change in an organization tends to be a new manager in a key job. These
change leaders range from the middle to the top of an organization; it is often a new
division-level manager or a new department head -- someone with fresh perspective -who sees that the status quo is unacceptable.
While there is no single source of change, there is a clear pattern to the reasons for
failure. Most often, it is a leader's attempt to shortcut a critical phase of the change
process. Certainly, there is room for flexibility in the eight steps that underlie successful
change -- but not a lot of room.
When people say, for instance, "We're going to empower employees to act
entrepreneurially -- but we don't need to spend a lot of time changing our whole
organization," they are almost bound to fail.
Producing change is about 80 percent leadership -- establishing direction, aligning,
motivating, and inspiring people -- and about 20 percent management -- planning,
budgeting, organizing, and problem solving. Unfortunately, in most of the change efforts
I have studied in the past 20 years, those percentages are reversed. Our business
schools and work organizations continue to produce great managers; we need to do as
well at developing great leaders.
Copyright © 1998 by John P. Kotter. Reprinted with permission from Leader to Leader,
a publication of the Leader to Leader Institute and Jossey-Bass.
Print citation:
Kotter, John P. "Winning at Change" Leader to Leader. 10 (Fall 1998): 27-33.
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John Kotter (who teaches Leadership at Harvard Business School) has made it
his business to study both success and failure in change initiatives in business.
"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 satisfactory results" and "making critical mistakes in any of
the phases can have a devastating impact, slowing momentum and negating
hard-won gains". Kotter summarizes the eight phases as follows.
1] Establish a Sense of Urgency
Talk of change typically begins with some people noticing a vulnerability in the
organization. The threat of losing ground in some way sparks these people into
action, and they in turn try to communicate that sense of urgency to others. In
congregations it is typically membership loss, financial struggles or turnover in
key volunteers and leaders. Kotter notes that over half the companies he has
observed have never been able to create enough urgency to prompt action.
"Without motivation, people won’t help and the effort goes nowhere….
Executives underestimate how hard it can be to drive people out of their comfort
zones". In the more successful cases the leadership group facilitates a frank
discussion of potentially unpleasant facts: about the new competition, flat
earnings, decreasing market share, or other relevant indicators. It is helpful to
use outsiders (say, for us, to bring in consultants, the unchurched, people from
other denominations, regional or national staff people) who can share the "big
picture" from a different perspective and help broaden the awareness of your
members. When is the urgency level high enough? Kotter suggests it is when
75% of your leadership is honestly convinced that business as usual is no longer
an acceptable plan.
2] Form a Powerful Guiding Coalition
Change efforts often start with just one or two people, and should grow
continually to include more and more who believe the changes are necessary.
The need in this phase is to gather a large enough initial core of believers. This
initial group should be pretty powerful in terms of the roles they hold in the
church, the reputations they have, the skills they bring and the relationships they
have. Regardless of size of your organization, the "guiding coalition" for change
needs to have 3-5 people leading the effort. This group, in turn, helps bring
others on board with the new ideas. The building of this coalition – their sense of
urgency, their sense of what’s happening and what’s needed – is crucial.
Involving respected leaders from key areas of your church in this coalition will
pay great dividends later.
3] Create a Vision
Successful transformation rests on "a picture of the future that is relatively easy
to communicate and appeals to customers, stockholders, and employees. A
vision helps clarify the direction in which an organization needs to move". The
vision functions in many different ways: it helps spark motivation, it helps keep all
the projects and changes aligned, it provides a filter to evaluate how the
organization is doing, and it provides a rationale for the changes the organization
will have to weather. "A useful rule of thumb: if you can’t communicate the vision
to someone in five minutes or less and get a reaction that signifies both
understanding and interest, you are not yet done with this phase of the
transformation process".
4] Communicate that Vision
Kotter suggests the leadership should estimate how much communication of the
vision is needed, and then multiply that effort by a factor of ten. Do not limit it to
one congregational meeting, a sermon by the minister, or a couple of mailouts to
members. Leaders must be seen "walking the talk" – another form of
communication -- if people are going to perceive the effort as important. "Deeds"
along with "words" are powerful communicators of the new ways. The bottom line
is that a transformation effort will fail unless most of the members understand,
appreciate, commit and try to make the effort happen. The guiding principle is
simple: use every existing communication channel and opportunity.
5] Empower Others to Act on the Vision
This entails several different actions. Allow people in the church to start living out
the new ways and to make changes in their areas of involvement. Allocate
budget money to the new initiative. Carve out time on the Session agenda to talk
about it. Change the way your church is organized to put people where the effort
needs to be. Free up key people from existing responsibilities so they can
concentrate on the new effort. In short, remove any obstacles there may be to
getting on with the change. Nothing is more frustrating than believing in the
change but then not having the time, money, help, or support needed to effect it.
You can’t get rid of all the obstacles, but the biggest ones need to be dealt with.
6] Plan for and Create Short-Term Wins
Since real transformation takes time, the loss of momentum and the onset of
disappointment are real factors. Most people won’t go on a long march for
change unless they begin to see compelling evidence that their efforts are
bearing fruit. In successful transformation, leaders actively plan and achieve
some short term gains which people will be able to see and celebrate. This
provides proof to the church that their efforts are working, and adds to the
motivation to keep the effort going. "When it becomes clear to people that major
change will take a long time, urgency levels can drop. Commitments to produce
short-term wins help keep the urgency level up and force detailed analytical
thinking that can clarify or revise visions".
7] Consolidate Improvements and Keep the Momentum for Change Moving
As Kotter warns, "Do not declare victory too soon". Until changes sink deeply into
a church’s culture -- a process that can take five to ten years -- new approaches
are fragile and subject to regression. Again, a premature declaration of victory
kills momentum, allowing the powerful forces of tradition to regain ground.
Leaders of successful efforts use the feeling of victory as the motivation to delve
more deeply into their organization: to explore changes in the basic culture, to
expose the systems relationships of the organization which need tuning, to move
people committed to the new ways into key roles. Leaders of change must go
into the process believing that their efforts will take years.
8] Institutionalize the New Approaches
In the final analysis, change sticks when it becomes "the way we do things
around here", when it seeps into the bloodstream of the corporate body. "Until
new behaviours are rooted in social norms and shared values, they are subject to
degradations as soon as the pressure for change is removed". Two factors are
particularly important for doing this. First, a conscious attempt to show people
how the new approaches, behaviours, and attitudes have helped improve the life
of the church. People have to be helped to make the connections between the
effort and the outcome. The second is to ensure that the next generation of
congregational leaders believe in and embody the new ways.
Kotter writes, "there are still more mistakes that people make, but these eight are
the big ones. In reality, even successful change efforts are messy and full of
surprises".
Bibliography:
You can go further into Kotter’s ideas by reading one of the following:
The Article: "Leading Change: Why Transformation Efforts Fail" by John Kotter.
Harvard Business Review, March-April 1995.