Leading Change: Why Transformation Efforts Fail
By: John P. Kotter
Source: http:hbr.org/2007/01/leading-change-why-transformation-efforts-fail/ar/1
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 success factors—from establishing a sense of extraordinary 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 recognise, immediately as if we’d always known them. A decade later, his work on leading change remains definitive.
Article Proper:
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 (General Motors) and elsewhere (British Airways), corporations that were on their knees (Eastern Airlines), and companies that were earning good money (Bristol-Myers Squibb). These efforts have gone under many banners: total quality management, reengineering, rightsizing, restructuring, cultural change, and turnaround. 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 organisations in the increasing competitive business environment of the coming decade.
Most of the 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. The second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains. Perhaps because we have relatively little experience in renewing organisations, 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 financial performance. They focus on the potential 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 information 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 transformation program started requires the aggressive 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 phase. What are the reasons for that failure? Sometimes executives underestimate how hard it can be to drive people out of their comfort zones. Sometimes they grossly overestimate how successful they have already been increasing urgency. Sometimes they lack patience: “Enough with the preliminary; let’s get on with it. “In many cases, executives become paralyzed by the downside possibilities. They worry that employees with seniority will be defensive, that morale will drop, that the event will spin out of control, that short-term business results will be jeopardized, 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 not enough leaders. Management’s mandate is to minimize risk and to keep the current system operating. Change, by definition, requires creating a new system, which in turn always demands leadership. Phase one in a renewal process typically goes nowehere until enough real leaders are prompted or hired into senior-level jobs.
Transformations often begin, and begin well, when an organization has a new head who is a good leader and who sees the need for a major change. If the renewal target is the entire company, the CEO is the key. If change is needed in a division, the division manager is the key. When these individuals are not new leaders, great leaders, or change champions, phase one can be a huge challenge.
Bad business results are both a blessing and a curse in the first phase. On the positive side, losing money does catch people’s attention. But it also gives less maneuvering room. With good business results, the opposite is true: Convincing people of the need for change is much harder, but you have more resources to help make changes.
Assignment Tasks:
1. Make a critical review of the article above. Critically evaluate the strengths and weaknesses of the opinions of the author and discuss both the positive and negative points based on your overall judgment.
2. Outsource information from working personnel here in Oman and discuss your own point of view on how change can be implemented based on your evaluation. Relate your critical analysis to any of the theoretical models of change.
1.Critically evaluate the strengths and weaknesses on the opinions of the author (20 marks)
Discuss both the positive and negative points based on your overall judgment (20 marks)
2. Outsource information from working personnel here in Oman and discuss your own point of view on how change can be implemented based on your evaluation.
