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BUSINESS: The Ultimate Resource September 2006 Upgrade 48

MANAGEMENT LIBRARY
Leading Change
by John Kotter Why Read It?
Kotter is regarded as one of the worlds leading figures in change management. His article, Leading Change, published in the MarchApril 1995 Harvard Business Review, quickly became the Reviews best-selling reprint. Readers commented that its analysis defined the real problem of change management. They also found the 8-stage change framework compelling. The book builds on the success of the article and includes dozens of examples of effective change management in action.

Getting Started
Kotter believes that successful change is based on an 8-stage process: 1. establishing a sense of urgency; 2. creating the guiding coalition; 3. developing a vision and strategy; 4. communicating the change vision; 5. empowering employees; 6. generating short-term wins; 7. consolidating gains and producing more change; 8. anchoring new approaches in the culture.

Contribution
1. Why Change Fails Kotter opines that most business transformations fail because they do not meet the criteria set out in his 8-point plan. These omissions would not be important in a slowermoving world, but the volatile forces of competition mean companies must change to survive and prosper. He believes that the pace of change is driven by forces such as technological development, international economic integration, and the globalization of markets and competition.

A & C Black Publishers Limited 2006

BUSINESS: The Ultimate Resource September 2006 Upgrade 48

The result, according to Kotter, is that there are either more opportunities or more hazards, depending on whether an organization can adapt or not. He then explains how successful change, the sort that enables companies to grasp opportunities, goes through the 8-stage process. He adds, however, that it is essential to go through all the stages in sequence. He also believes that change must be led, not managed. 2. A Sense of Urgency Establishing a sense of urgency helps to get the cooperation needed for change. A committed group, Kotter argues, can drive change through. He suggests a number of approaches for increasing the urgency level:

creating a vision; setting targets so high they cannot be achieved through business as usual; getting staff to talk to customers; showing people that great opportunities cannot be achieved by the present organization.

3. Building the Guiding Coalition Kotters second stage is the guiding coalition. He believes that an isolated chief executive or a weak committee cannot cope with the pace of change. The coalition must comprise people with power, expertise, credibility, and leadership. Leadership is key, because change must be led not managed. He explains why the coalition must be built on trust and a common goal, noting that team-building exercises can be an important part of that process. 4. Developing a Vision According to Kotter, a vision clarifies the direction of change. Other decisions must be in line with the vision. Vision also helps to align individuals and motivate them in an efficient way. He believes that a vision should be imaginable, desirable, feasible, focused, flexible, and communicable. 5. Communicating Change Kotter argues that a vision has real power only when it is communicated effectively. Effective communication is vital because employees receive vast amounts of information, and communications about change can easily get lost. Kotters advice is to keep it simple, use metaphors, keep repeating the message, listen, and lead by example. 6. Empowering Employees Turning the vision into action means removing structural barriers to change so that employees are empowered, says Kotter. That may require training, reorganization, aligning information and systems to the vision, and confronting people who try to restrict change.

A & C Black Publishers Limited 2006

BUSINESS: The Ultimate Resource September 2006 Upgrade 48

7. Short-term Wins According to Kotter, short-term wins are essential. They are visible and show that change is producing results. They also help to fine-tune the change process, build momentum, and reward the people who are delivering change. Pressure and challenging targets can help to deliver the gains. 8. Consolidating Gains Kotter believes that all gains need to be consolidated to keep the process moving. This is particularly important in companies where there is a high level of interdependence. Maintaining momentum also requires strong leadership, effective project management, and support for the people who are effecting change. 9. Anchoring Change The final stage in Kotters process is anchoring the new approaches in the corporate culture. He argues that the new behavior should become the norm. Ideally, everyone in the organization should have shared values. Kotter believes that achieving this level of acceptance depends on results. It may even require changing key people.

Context
The study of change has gained importance as competition has intensified and other structural factors impact the business environment. Kotters work demonstrates the positive aspects of effective change. It also shows that strong leadership is essential if change is to succeed. Rosabeth Moss Kanters book The Change Masters (Free Press, 1985) puts a similar emphasis on the importance of strategic leadership. William Bridges, on the other hand, in Managing Transitions (Perseus, 1991), puts more emphasis on management of the personal consequences of change, highlighting the need to reduce anxiety and manage the process he calls transition. Hammer and Champys book Reengineering the Corporation (Collins, 2004) took change to a logical conclusion and showed how companies would have to transform themselves to compete effectively. Unfortunately, reengineering has been widely associated with downsizing, and this has given change management negative connotations.

For More Information


Kotter, John P. Leading Change. Boston, MA: Harvard Business School Press, 1996.

A & C Black Publishers Limited 2006

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