Book Club: "Leading Change"

"Leading Change" by John Kotter offers an eight-step process for managing change and has become the foundation for organizations around the world. By outlining the process every organization must go through to achieve its goals, and identifying where derailment happens, Kotter provides practical advice that leaders can benefit from.

If you have a book suggestions, contact us, we’d love to hear your input.

Executive Summary: 

Change is inevitable; and the rate of change will continue to increase in our diverse global economy.  Leading successful change requires developing urgency, gathering the right team, creating an effective vision, and over-communicating that vision.

The Change Problem

The amount of change that organizations experience continues to increase. As a result companies will continue to be pushed to reduce costs, improve product quality, and find new opportunities for growth.

More often than not, improvements are meager and the downsides are endless:

•  Wasted resources

•  Frustration

•  Burned-out employees

•  and more...

The Eight Mistakes of Change

1) Allowing too Much Complacency

Smart leaders fail to create a sense of urgency because they (a) don’t recognize how their actions affect the status quo, and (b) they overestimate how much they can force big changes.

2) Failing to Create a Powerful Guiding Coalition

Not only is buy-in from leadership required to create lasting change, but the acceptance of a plethora of individuals and teams are also essential.

3) Underestimating the Power of Vision

Without vision, transformational projects will turn into a disjointed culmination of projects and stress. Vision helps align and direct actions across large groups of people.

4) Under-Communicating the Vision x10

People won’t make sacrifices to help achieve major change without understanding the vision and the potential benefits they will gain as a result of their sacrifices. When management behaves in a way that contradicts the vision, employees will see this as hypocritical and demotivating.

5) Letting Obstacles Block the New Vision

Supervisors who don’t adapt to change will often make demands that are incompatible with the vision. In other cases, organization structure and over-specialized jobs can make employees feel obstacles that aren’t really there.

6) Failing to Create Short-Term Wins

Because large changes take time, companies need to develop achievable short-term goals in order to motivate and maintain momentum.

7) Declaring Victory Too Soon

While celebrating a win is fine, any suggestion that the job is mostly done is generally a terrible mistake.

8) Neglecting to Anchor Changes Firmly in the Corporate Culture

Until new behaviors are rooted in social norms and shared values, they are always subject to degradation as soon as the pressure associated with a change effort are removed.

Successful Change and the Force That Drives It

Today, with a globalized economy, change is necessary for companies to stay ahead of competition and survive.

Other forces driving change:

• Technological advancement

• International economic integration

• Maturation of markets in developed countries

• More countries linked to capitalist systems

Establishing a Sense of Urgency

"Establishing a sense of urgency is crucial to gaining needed cooperation during periods of change."

Common Sources of Complacency

• No highly visible crisis or threats

• Too many visible resources

• Low overall performance standards

• Organizational structures that focus employees on narrow functional goals

• Internal measurement systems that focus on the wrong performance indexes

• A lack of sufficient performance feedback from external resources

• A kill-the-messenger-of-bad-news, low candor, low-confrontational culture

• Human nature, with its capacity for denial, especially if people are already busy or stressed

• Too much “happy talk” from senior management

"Creating a strong sense of urgency usually demands bold or even risky actions that we normally associate with good leadership."

How to Raise the Urgency Level

• Insist that people talk regularly to unsatisfied customers, suppliers, and shareholders

• Set goals that can’t be reached if things remain “business as usual”

• Speak more openly about company problems

• Allow errors to blow up, rather than correcting them at the last minute

The Role of Crisis

Creating an artificial crisis to remove complacency is a better alternative than waiting for a real crisis to occur. Major change is often thought to be impossible without significant loses being felt.

Key takeaway: 

Urgency needs to be genuinely felt by all people in an organization for major change to occur. This can be difficult to create when things are seemingly running smoothly, so it's up to leaders to create friction and jumpstart change.

Creating the Guiding Coalition

Building a team with the right composition, level of trust, and shared objective is essential for sustaining major change; it takes more than one or two passionate leaders.

4 Requirements for a Guiding Coalition

Position of Power - having enough managers on board will prevent resistance from others

Expertise - including relevant expertise to the problem at hand will help inform decisions

Credibility - a collection of good reputations will ensure that suggestions are taken seriously

Leadership - respected leaders are needed to drive the change process

Developing a Vision and Strategy

Authoritarian decree and micromanagement are often how leaders approach communicating change. Creating a vision motivates, rather than enforces, people to take action. Vision is also an efficient way to communicate a goal to a variety of different departments and people.

An effective vision is:

Imaginable - What will the future look like?

Desirable - Why do people want this?

Feasible - Is this realistic?

Focused - Is it clear?

Flexible - Can it adapt to changing conditions?

Communicable - Can it be easily explained?

"Reengineering, restructuring, and other change programs never work well over the long run unless they are guided by visions that appeal to most of the people who have a stake in the enterprise."

Key Elements of Effective Vision Communication

Analogies - paint a picture for people to remember

Multiple forums - don’t rely on one method for communicating vision

Repetition - verge on the side of over-communication

Lead by example - leaders can’t contradict the vision

Encourage discussion - talking about the ideas will help them sink in

"The time and energy required for effective vision communication are directly related to the clarity and simplicity of the message."

Empowering Employees for Broad-Based Action

• Communicate the vision and create a shared sense of purpose
• Make organizational structures compatible with the vision
• Provide the proper training that employees need
• Align information and personnel systems to the vision
• Confront leaders/managers who undercut the needed change

Generating Short-Term Wins

Celebrating small successes and milestones along the way helps provide evidence that sacrifices are worth it. This rewards people who are pushing the change by giving them an opportunity to be recognized along the way.

Additionally, generating short-term wins:

•  Helps refine the vision and accompanying strategies
•  Proves to cynics that the change is feasible
•  Keeps leaders happy with progress
•  Builds momentum

Looking to the Future

With rapid technological changes, more specific customer requirements, and more globalization, the ability to navigate and create lasting change will put companies miles ahead of the competition. Employees, managers, and leaders will need to become lifelong learners and be more accepting of new ideas and rapid changes.

"Better for most of us to start learning now how to cope with change [...] Better for most of us, despite the risks, to leap into the future. And to do so sooner rather than later."

- John P. Kotter