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Leading Successful Change After reading Kotter’s Leading Change – Why Transformation Efforts Fail: · Submit: Describe which 3 of these 8 steps do you believe are the most critical to leading successful change. Address how you would avoid the pitfalls associated with that step. R0701J_pdf.fm www.hbrreprints.org B EST OF HBR Leading Change Why Transformation Efforts Fail by John P. Kotter • Included with this full-text Harvard Business Review article: The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 1 Article Summary 2 Leading Change: Why Transformation Efforts Fail A list of related materials, with annotations to guide further exploration of the article’s ideas and applications 10 Further Reading Leaders who successfully transform businesses do eight things right (and they do them in the right order). Reprint R0701J This document is authorized for use only by Kristopher Durham in Capstone Experience B - Fall 2021 at Wake Forest University Medical School, 2021. http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=R0701J http://www.hbrreprints.org B E S T O F H B R Leading Change Why Transformation Efforts Fail page 1 The Idea in Brief The Idea in Practice C O P YR IG H T © 2 00 6 H A R V A R D B U SI N E SS S C H O O L P U B LI SH IN G C O R P O R A T IO N . A LL R IG H T S R E SE R V E D . Most major change initiatives—whether in- tended to boost quality, improve culture, or reverse a corporate death spiral—generate only lukewarm results. Many fail miserably. Why? Kotter maintains that too many managers don’t realize transformation is a process, not an event. It advances through stages that build on each other. And it takes years. Pressured to accelerate the process, managers skip stages. But short- cuts never work. Equally troubling, even highly capable managers make critical mistakes—such as declaring victory too soon. Result? Loss of momentum, reversal of hard-won gains, and devastation of the entire transforma- tion effort. By understanding the stages of change— and the pitfalls unique to each stage—you boost your chances of a successful transfor- mation. The payoff? Your organization flexes with tectonic shifts in competitors, markets, and technologies—leaving rivals far behind. To give your transformation effort the best chance of succeeding, take the right actions at each stage—and avoid common pitfalls. Stage Actions Needed Pitfalls Establish a sense of urgency • Examine market and competitive reali- ties for potential crises and untapped opportunities. • Convince at least 75% of your man- agers that the status quo is more dan- gerous than the unknown. • Underestimating the difficulty of driving people from their comfort zones • Becoming paralyzed by risks Form a pow- erful guiding coalition • Assemble a group with shared commit- ment and enough power to lead the change effort. • Encourage them to work as a team outside the normal hierarchy. • No prior experience in teamwork at the top • Relegating team leadership to an HR, quality, or strategic-planning executive rather than a senior line manager Create a vision • Create a vision to direct the change effort. • Develop strategies for realizing that vision. • Presenting a vision that’s too complicat- ed or vague to be communicated in five minutes Communicate the vision • Use every vehicle possible to commu- nicate the new vision and strategies for achieving it. • Teach new behaviors by the example of the guiding coalition. • Undercommunicating the vision • Behaving in ways antithetical to the vision Empower others to act on the vision • Remove or alter systems or structures undermining the vision. • Encourage risk taking and nontradition- al ideas, activities, and actions. • Failing to remove powerful individuals who resist the change effort Plan for and create short- term wins • Define and engineer visible perform- ance improvements. • Recognize and reward employees con- tributing to those improvements. • Leaving short-term successes up to chance • Failing to score successes early enough (12-24 months into the change effort) Consolidate improve- ments and produce more change • Use increased credibility from early wins to change systems, structures, and policies undermining the vision. • Hire, promote, and develop employees who can implement the vision. • Reinvigorate the change process with new projects and change agents. • Declaring victory too soon—with the first performance improvement • Allowing resistors to convince “troops” that the war has been won Institutionalize new approaches • Articulate connections between new behaviors and corporate success. • Create leadership development and succession plans consistent with the new approach. • Not creating new social norms and shared values consistent with changes • Promoting people into leadership posi- tions who don’t personify the new approach This document is authorized for use only by Kristopher Durham in Capstone Experience B - Fall 2021 at Wake Forest University Medical School, 2021. B EST OF HBR Leading Change Why Transformation Efforts Fail by John P. Kotter harvard business review • january 2007 page 2 C O P YR IG H T © 2 00 6 H A R V A R D B U SI N E SS S C H O O L P U B LI SH IN G C O R P O R A T IO N . A LL R IG H T S R E SE R V E D . Leaders who successfully transform businesses do eight things right (and they do them in the right order). Editor’s Note: Guiding change may be the ulti- mate test of a leader—no business survives over the long term if it can’t reinvent itself. But, human nature being what it is, fundamental change is often resisted mightily by the people it most affects: those in the trenches of the busi- ness. Thus, leading change is both absolutely es- sential and incredibly difficult. Perhaps nobody understands the anatomy of organizational change better than retired Harvard Business School professor John P. Kotter. This article, originally published in the spring of 1995, previewed Kotter’s 1996 book Leading Change . It outlines eight critical suc- cess factors—from establishing a sense of ex- traordinary urgency, to creating short-term wins, to changing the culture (“the way we do things around here”). It will feel familiar when you read it, in part because Kotter’s vocabulary has entered the lexicon and in part because it contains the kind of home truths that we recog- nize, immediately, as if we’d always known them. A decade later, his work on leading change remains definitive. Over the past decade, I have watched more than 100 companies try to remake themselves into significantly better competitors. They have included large organizations (Ford) and small ones (Landmark Communications), companies based in the United States (Gen- eral Motors) and elsewhere (British Airways), corporations that were on their knees (Eastern Airlines), and companies that were earning good money (Bristol-Myers Squibb). These ef- forts have gone under many banners: total quality management, reengineering, rightsiz- ing, restructuring, cultural change, and turn- around. But, in almost every case, the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment. A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale. The lessons that can be drawn are interesting and will probably be relevant to even more or- This document is authorized for use only by Kristopher Durham in Capstone Experience B - Fall 2021 at Wake Forest University Medical School, 2021. Leading Change • • • B EST OF HBR harvard business review • january 2007 page 3 ganizations in the increasingly competitive business environment of the coming decade. 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 a satisfying result. A second very general lesson is that critical mis- takes in any of the phases can have a devastat- ing impact, slowing momentum and negating hard-won gains. Perhaps because we have rela- tively little experience in renewing organiza- tions, even very capable people often make at least one big error. Error 1: Not Establishing a Great Enough Sense of Urgency Most successful change efforts begin when some individuals or some groups start to look hard at a company’s competitive situation, market position, technological trends, and fi- nancial performance. They focus on the po- tential revenue drop when an important patent expires, the five-year trend in declining margins in a core business, or an emerging market that everyone seems to be ignoring. They then find ways to communicate this in- formation broadly and dramatically, especially with respect to crises, potential crises, or great opportunities that are very timely. This first step is essential because just getting a transfor- mation program started requires the aggres- sive cooperation of many individuals. Without motivation, people won’t help, and the effort goes nowhere. Compared with other steps in the change process, phase one can sound easy. It is not. Well over 50% of the companies I have watched fail in this first phase. What are the reasons for that failure? Sometimes executives underestimate how hard it can be to drive peo- ple out of their comfort zones. Sometimes they grossly overestimate how successful they have already been in increasing urgency. Sometimes they lack patience: “Enough with the prelimi- naries; let’s get on with it.” In many cases, exec- utives become paralyzed by the downside pos- sibilities. They worry that employees with seniority will become defensive, that morale will drop, that events will spin out of control, that short-term business results will be jeopar- dized, that the stock will sink, and that they will be blamed for creating a crisis. A paralyzed senior management often comes from having too many managers and