Leading Change – Johan P. Kotter

Group 6

Kotter 8 Step Change Model

Why Kotter 8 Steps methodology Organizations facing powerful macro economic forces

over past two decades compelling them to constantly improve quality, reduce cost, increase productivity etc. As a result many number of changes carried out in organizations like restructuring, re engineering, Mergers and acquisitions etc.

Many changes brought in disappeared quickly due to 8 common errors.

1. Allowing too much complacency2. Failing to create powerful coalition3. Underestimating vision4. Under communication vision5. Permitting obstacles to undermine the vision6. Failing to create short term wins7. Declaring Victory soon8. Failing to anchor the changes firmly in the culture.

Economic & social forces driving the need for major change in organizations

Why Kotter 8 Steps methodology Kotter provided 8 step solution for each error.

Kotter 8 Stage process for creating major change1. Establish sense of urgency2. Create guiding coalition3. Develop a vision and strategy4. Communicating the change vision5. Empowering broad based action6. Generating short term wins7. Consolidating gains and producing more change8. Anchoring new approach in culture.

By successful implementation of change action following kotter 8 step methodology increase the chance of successful implementation of any major change and thereby help organization to accommodate to the transforming environment.

Management Vs Leadership Management is a set of processes than can keep a

complicated system of people and technology running smoothly. It aims in

1. Planning & Budgetting2. Organizing & Staffing3. Controlling & Problem solvingManagement leads to degree of predictablility Leadership is a set of processes that creates

organisations in the first place or adapts them to significant changing circumstances. It aims in

1. Establishing the direction (Vision of future)2. Aligning people to the vision3. Inspires people to make it happen in spite of obstaclesLeadership leads to produce changeSucessful transformation is 70 to 90% Leadership and

only 10 to 30% Management

Establishing a Sense of Urgency

Step 1: Establishing a Sense of Urgency Organization must take initiative in bringing down

complacency and push the sense of urgency. With high complacency it is difficult to convince key

individuals and create the group with adequate power needed for communicating a change vision.

Kotter suggested ways to raise urgency level1. Create a crisis by exposing the financial loss & communicate

future threat.2. Set higher targets3. Stop measuring performance through narrow functional growth.4. Stop Happy talk5. Send more information to employs regarding financial loss,

unsatisfied customers.6. Encourage consultants speaks honest data.

The above points leads to “True sense of Urgency”

Step 1: Establishing a Sense of Urgency Care must be taken to avoid False urgency &

Complacency which spreads As If Doing Attitude (AIDS).

False urgency is Misguided, Creates anxiety, Fear & Danger, Flurry behavior, Drains energy unproductively & Prevents people from exploiting opportunities.

Complacency is contented with Status Quo, Insufficient attention to new opportunities and new hazards, Sluggishness or arrogance due to past success.

Success is the breeding ground for complacency by making workers turn inward, Making organizations think what they doing is right and there is no need to change.

As per John spence, Success leads to 4I’s Ignorance, Indifference, Inflexibility & Inconsistency.

Creating the Guiding Coalition

Step 2: Creating the Guiding Coalition In rapid changing world No one individuals & weak

committees have all the information needed to make major decision. They do not possess the time and credibility to convince lots of people to implement decisions.

The combination of Trust & a common Goal shared by people with right characteristics makes a powerful team.

The right characteristics are 1. Position Power – To include key people with power who

later not blocks the process2. Expertise – Multifunctional experts to make intelligent

decisions3. Credibility – Team must convince other people regarding

the change actions through their credibility4. Leadership – Team must posses leaders to drive the

change process.

Developing a Vision and Strategy

Step 3: Developing a Vision and Strategyo Vision refers to a picture of future with some implicit and

explicit commentary on why people should strive to create that future.

o Good vision should have Direction of the future, to Motivate people to undergo painful steps as part of change process & Coordinate lots of people in efficient way.

o Vision ---> Strategies ----> Plans ---> Goal. The first two accomplished by Leadership & rest by competent Management.

o Characteristics of effective Vision1. Imaginable - Conveys picture of future2. Desirable – Satisfies long term interests of Employees,

Customers & Stock holders.3. Feasible – Comprised realistic and attainable4. Flexible – Adaptive to changing conditions5. Communicable - Easy to communicate in 5 minutes

Communicating the Change Vision

Step 4: Communicating the Change Vision Real power of Vision is unleashed when most of the

people in organization or activity have a common understanding of its goals and direction.

Key Elements in effective communication of vision 1. Simplicity – To eliminate the jargons & technobabble words2. Metaphor – To use metaphor for better understanding3. Multiple forums – Spread the message in various forums4. Repetition – Repeated communication lead to deep sink of

ideas in peoples mind5. Leadership by example – Behavior consistent with Vision6. Explanation of seeming inconsistencies – Address

inconsistencies improves credibility of communication.7. Give & Take – Establish two way communication

Empowering Employees for Broad-Based Action

Step 5: Empowering Employees for Broad-based Action The purpose of this stage is to empower a broad base of

people to take action by removing as many barriers to the implementation of the change vision.

The four barriers are Structure, Skills, Systems & Supervisors.

Ways to empower people1. Structures to be compatible with vision2. Provide training to employees to take greater responsibility.3. To align information and personnel systems to vision4. Confront supervisors who undermine the change vision.

Generating Short-term Wins

Step 6: Generating Short-term Wins

Management have to plan deliberate short term wins to take forward the transformation actions for the longer period successfully.

A good short term win must possess three characters 1. Short term win must be visible such that many people can see2. Must be unambiguous 3. Related to change action.

The advantages of short term wins1. Provides evidence that the efforts taken are worthy2. Motivates the change agents through rewards3. Helps to fine tune the vision and strategies4. Undermine cynics to block the change action5. Give confidence to top management that transformation is on

track.6. Built momentum by turning neutrals into supporters, reluctant

supporters to active supporters etc.

Consolidating Gains and producing more changes

Step 7: Consolidating Gains and producing more changes

To achieve the Change action there would be number of projects running within the projects. It is so complex to manage all twenty projects by conventional organization. Organization can be successful in managing all twenty projects by carrying out two actions1. Senior executive to focus on overall leadership tasks

( Establishing direction, Aligning people, Motivating and inspiring) which Produces change

2. Senior executive delegate responsibility for Management (Planning, Organizing, controlling) which produces degree of predictability.

This delegation provides the lower management the information to coordinate the activities without endless meetings

Senior executive must identify and eliminate unnecessary inter dependencies to make change easier.

Anchoring change in culture

Step 8: Anchoring change in culture Culture refers to norms of behavior and shared values among

group of people. Shared values are less apparent but more deeply ingrained in the culture are more difficult to change than norms of behavior.

The new practices made in the transformation effort are not compatible with relevant cultures, they will always subject to regression.

The steps to replace old culture and follow new practice1. To talk great deal about evidences of improved result

obtained from new practice2. Explain how old culture comes into practice and served well

and why it was no longer helpful3. Replace long serviced employees by attractive retirement

schemes and convince existing employees to embrace new culture.

4. To recruit new ones with no traces of old values and culture.5. Do not encourage promotions who not follow new practices6. Identify sucession to current CEO to take over the new

practice.

Organization of the future

Structure

Systems

- Externally oriented- Empowering- Quick to make decisions- Open and Candid- More risk tolerant

Culture- Inwardly Focussed- Centralized- Slow to make decisions- Political- Risk averse

- Management training and support given to senior people only

- Depend on many performanceinformation systems- Distribute perfomance data widely

- Management training and support given to senior people only

- Depend on few performance

Management will manage- Minimal internal dependencies

information systems- Distribute perfomance data toexecutives only

- Many internal dependencies

- Non Bureaucratic (Fewer rules)- Fewer levels- Senior management will Lead & Lower

Twentieth Century Organisation Twenty first century organisation

- Bureaucratic- Multileveled- Senior management will manage

Leadership & Life long learning

Leadership & Life long learning

Origin of Leadership is nothing inherent in Human DNA prevents growth later in life.

In 21st century remarkable leaders develop their skills through lifelong learning since this pattern of growth is rewarded in rapidly changing environment.

Harvard research carried out for 20yrs by 115 students identified two factors key for certain people who do well in challenging economic climate are

1. Competitive drive Level of standards, Desire to do well, Self confidence in competitive situaions

2. Life long learning Seek new challenges, honest reflections to success and failuresThis two factors helps a person to acquire unusually

strong Competitive capacity

Critical Evaluation / Comments Book written by the John P Kotter has below attributes1. Simple language2. Powerful ideas 3. Vivid examples4. Thought provoking5. Influential

Learnings Must read book for 21st century executives, Managers

& Entrepreneurs. Provides clear idea through 8 steps to manage major

change. Good understanding of Management Vs Leadership Obtained deeper insights regarding 21st century

organization requirements. Learnt the success of Matsushita by understanding

importance of Leadership & Life long learning.