This is the second post dedicated to change management, after the review of William Bridges Managing Transition.
Rather than doing yet another review of this classic book (there are hundreds around, there even is the Kotter’s HBR original article online), this post aims to confront both the ideas of the book and a very interesting paper by McKinsey The Inconvenient Truth About Change Management by Carolyn Aiken and Scott Keller.
John Kotter used to be professor of Leadership in Harvard Business School. He is now Chief Innovation Officer at Kotter International. He has been studying change initiatives in corporations for decades and he has summarized his observations in this acclaimed classic of Change Management. Leading Changes proposes a 8 stage process to successful change management (described below). In addition, the content is enriched with two great essays on 21st century Leadership. Needless to say : an excellent read.
The Inconvenient Truth About Change Management is a paper by McKinsey which brings some (inconvenient) perspective in a post Leading Change world, 10 years or so down the line, where change initiatives remain at the same success level than the one carried out in a pre Leading Change world. This allows to enrich Kotter framework with some reality checks lessons (warning : 2000+ words) …
The problem with change
The Mc Kinsey Report draws on many scientific studies (including Daniel Kahneman‘s which #hypertextual will elaborate upon shortly) and provide us with an important element to keep in mind when dealing with a change initiative :
The scientific study of human irrationality has shown that many of our instincts related to understanding and influencing our own and others’ motivations push us towards failure instead of success.
This is not an easy thing to do. Hence it is strongly recommended to prepare and plan it thoroughly. John Kotter’s eight stage process can help in doing so.
1. Sense of urgency
The first stage according to Kotter is to establish a sense of urgency. The main reason is to fight complacency. If complacency is widespread in the organisation, there is no way a change initiative can succeed.
Broadly speaking, the best way to accomplish this is to open the organisation to as many inputs from outside as possible : what our competitors are doing, how is market evolving, what are the new opportunities, what our customers are saying about our products and services. Closed silos, based on suboptimal local KPIs, are a great way to foster complacency. This is such an important issue that Kotter wrote a entire book on that very topic.
This is where Kotter joins Bridges recommendation of selling the problem. This requires balance though as the McKinsey paper The Inconvenient Truth About Change Management reports :
Deficit-based approaches (“solve the problem”) to change can create unproductive fatigue and resistance. Constructionist-based approaches (“capture the opportunity”) generate more excitement and enthusiasm, but lead to risk averse solutions. By moving beyond this dichotomy and pursuing both approaches simultaneously, managers can neutralize these downsides and maximize impact in mobilizing the organization.
2. Build a coalition
Change can not be implemented without enough authority : that’s a common mistake corporations make when building change management teams. The team needs to have position power, expertise, credibility and leadership.
Kotter insists the team leading the change needs both management and leadership skills. Managerial mindset develop plans but not vision while leader’s carry the vision without being able to develop the plans to achieve it. In his book What Leaders Really Do, the author describes the difference between Management and Leadership : the former is about coping with complexity while the latter is about coping with change.
It must be a real team based on trust and teamwork. Two types of characters are to be avoided in the guiding coalition. First are professional with big egos as it will damages teamwork. Second are what Kotter calls “Snakes” as they damage the trust of the team while telling Sally something about Fred and vice versa.
McKinsey report sheds a supplementary light on the coalition team related to how people see themselves and the work they do and recommend 360 peer reviews to ensure people stay aligned and do the right thing.
The fact is that most well intentioned and hard-working people believe they are doing the right thing, or they wouldn’t be doing it. However, most people also have an unwarranted optimism in relation to their own behavior.
3. Develop a vision and a strategy
The Vision carries the future, where the organisation wants to go. It sets the direction for people to understand how to align their efforts to achieve it. For the people to take ownership of the vision it has to be imaginable, desirable, feasible, focused, flexible and communicable.
Designing such an appealing vision is not an easy task. It is strongly recommended to build it through a collaborative and iterative process. This will be the guiding light of the change initiative so ensure you dedicate enough time to make it right.
McKinsey report insists here on the need to make sure the leader vision tap in all 5 main sources of employees motivation : impact on society, impact on the company, impact on customer, impact on the working team, and impact on the actual person (the What’s in it for me?). Most of the time, the vision only focusses on the company and misses 80% of the employee motivator.
Another good lense through which the vision can be validated is Dan Pink’s motivation core elements : purpose, mastery and autonomy.
4. Communicate the vision
Once this vision is set, it has to be relentlessly communicated again and again and again. Each decision has to be put in perspective on how it helps to achieve this vision.
This is why the vision has to be clear and simple. If you can’t sell it in a 5 mns pitch, you have to go back to your homework. Simplicity is key as a complex vision invite to many interpretations by teams that can somehow manage to see inconsistencies in specific complicated situations.
An important point in Kotter’s book is to allow for two way communication, for people to take ownership and to build their own story. This is by somehow validated by another takeaway from The Inconvenient Truth About Change Management :
Research indicates that when employees choose for themselves (versus “being told”), they are more committed to the outcome by a factor of almost five to one. Time communicating the message should be dramatically rebalanced towards listening versus telling.
Last but not least, communication also is carried out with actions. Senior Management, executives and coalition team must walk the talk and make sure none of their behavior expresses dissonance with the changes being implemented. As Kotter puts it :
Nothing undermines the communication of a change vision more than behavior on the part of key players that seem inconsistent with the vision.
5. Empower employees for broad bases action
Empowerment is a key asset to succeed in scaling a change project in an organisation as internal transformation rarely happens unless many people assist. The former Harvard Professor identifies 4 main barriers to empowerment : formal structures making it difficult to act, lack of needed skills which undermines action, personnel and information systems making it difficult to act and bosses discouraging actions aiming at implementing the vision.
All these barriers to empowerment have to be seen as barriers to implement the vision. So the recommended actions are to communicate a sensible vision (see points 4 & 5), make structures compatible with the vision, provide the required training, aligned that systems that may block the implementation and confront supervisors that may disempowers employees.
Again, this is another common point with Bridges vision whereby in the neutral zone, you have to empower employees to take any opportunity to improve the way the work is being carried out.
McKinsey adds an interesting perspective on how to motivate employees to contribute :
Employees will go against their own self-interest (read: incentives) if the situation violates other notions they have about the way the world should work, in particular, in relation to fairness and justice.
6. Generating Short Term-Wins
We all understand that short term wins are beneficial to a change project. However here Kotter insists on planning these short term wins instead of trying to achieve them. It makes a big difference.
This is another key strategy to give the initiative all the odds of success. These wins are important as they help to provide evidence that sacrifices are worth it, reward change agents, fine-tune the vision and strategy, keep executives on board, build momentum and most importantly undermine cynics. It may help to convert fence sitters into supporters, reluctant supporters into active participants etc …
7. Consolidating gains and producing more change
There is a massive risk after the first quick wins have been acknowledged, it is to claim victory too soon. The risk is to allow for complacency to come back. When a change is carried out, even if resistance is silent down, it always is lurking, waiting to reassert itself. This is why when change has started and has gained momentum it is important to ensure more changes are being carried out.
Kotter focusses here on the highly interdependent systems which are barriers to deploy further changes. Quite often, changes are complex in interdependent systems because of all the consequences and relationships. Kotter advice is to work on these interdependence and try to remove them whenever possible. Some may have been put in places ages ago while implementing some old rules that are no longer relevant. Identifying and removing these interdependences is key to help scale the change initiative to other part of organisations and other projects.
Lastly, for change to spread in the organisation, senior management must focus on leadership (vision and strategy) while lower ranks in the hierarchy are empowered to manage these different change projects.
8. Anchoring new approaches in the culture
Claiming victory too soon is a big risk. But actually, it is just claiming victory that is a plain risk. Achieving a change vision in a couple of years do not mean that the good old habits are not dormant waiting for an opportunity to come back.
In Leading Change, Kotter tells many such stories whereby, because of bad decisions (change of executive, appointment of senior manager not fully aligned with the change), the benefits of many years change initiative vanished in a few months.
What is interesting here is that Kotter anchors the change by tackling the deep-rooted artefacts of the culture, at the last stage of the change project :
Culture is not something that you manipulate easily. Attempts to grab it and twist it into a new shape never work because you can’t grab it. Culture changes only after you have successfully altered people actions, after the new behavior produces some group benefits for a period of time and after people see the connection between the new actions and the performance improvement.
As an example, he tells this great story of a CEO speech making a eulogy of the books the company was run by, books that are no longer relevant in today’s economy.
The CEO pays credit to what the company has achieved thanks to these guidelines but explains why this is to for the Letting Go. The interesting thing here is that this is the very first stage of the transformation according to Bridges while here, it is the last one.
Implications for the 21st century
The typical 20th century organisation has not operated well in a rapidly changing environment. Structures, systems, practices and culture have often been more of a drag than a facilitator. If volatility continues to increase, as most people now predict, the standard organization of the 20th century will likely become a dinosaur.
Based on this statement, the author insists that the successful organisation of the 21st century is an organization where permanent change is the rule. So it fosters a persistent sense of urgency (and has completely eradicated complacency), put team work at the top, fosters leadership throughout the company to communicate the vision, empower the team, delegate management, has remove unnecessary interdependence, and live and adaptive culture. A genuine description of the Enterprise 2.0.
Besides, these companies will be based on leaders which engage into lifelong learning to remain adaptable. This is no easy task, yet this is necessary for the company and the people :
People who are making an effort to embrace the future are a happier lot than those who are clinging to the past.
The last 2 essays are quite fascinating in their deep understanding of the 21st century corporations. We’ll get back later when discussing how Lean, Agile and Enterprise 2.0 all converge towards that vision.
I’ve used Kotter’s work many many times over the past twenty years. Bringing this additional perspective is very useful .. and I am wondering whether it goes “far enough”.
‘Whitewater’ and permanent continuous change seem to be with us for good. I think I’d argue that if and how possible, it would be wise and practical to think about how to ensure that stages 4 through 8 are in effect continuous and ongoing processes (especially re: short-term wins, must be contextualized in larger scheme of things).
Hi Jon – thanks for your comment. Good to hear from your experience with Kotter’s 8 stage process. Be lighted to know what is your feedback on it what works well and what does not ?
Kotter is the cascading diffusion model, whereas McKinsey seems close to the less traditional management approach of a more holistic translation model…ie “we”, rather than “us and them”
Thanks John. I have to say the cascadibng model is quite tempting – McKinsey model looks more complicated to implement. Probably good idea to mix both, hence the post. Great post you’re pointing to, thanks for the link.