The Eight Steps to Transformation |
August 21, 2007 |
| Reviewer:
Turgay Bugdacigil
from Istanbul, Turkey
|
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"Over the past decade," John P. Kotter writes, "I have watched more
than a hundred companies try to remake themselves into significantly
better competitors. They have included large organizations (Ford) and
small ones (Landmark Communications), companies based in 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). Their efforts have gone under many
banners: total quality management, reengineering, right-sizing,
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 organizations in the increasingly competitive
business environment of the coming decade."In
this context, John P. Kotter lists the most general lessons to be
learned from both (I) the more successful cases and (II) the critical
mistakes as follows: I. Lessons from the more successful cases: 1. Establishing a sense of urgency * Examining market and competitive realities * Identifying and discursing crises, potential crises, or major opportunities 2. Forming a powerful guiding coalition * Assembling a group with enough power to lead the change effort * Encouraging the group to work together as a team 3. Creating a vision * Creating a vision to help direct the change effort * Developing strategies for achieving that vision 4. Communicating vision * Using every vehicle possible to communicate the new vision and strategies * Teaching new behaviors by the example of the guiding coalition 5. Empowering others to act on the vision * Getting rid of obstancles to change * Changing systems or structures that seriously undermine the vision * Encouraging risk taking and nontraditional ideas, activities, and actions 6. Planning for and creating short-term wins * Planning for visible performance improvements * Creating those improvements * Recognizing and rewarding employees involved in the improvements 7. Consolidating improvements and producing still more change * Using increased credibility to change systems, structures, and policies that don't fit the vision * Hiring, promoting, and developing employees who can implement the vision * Reinvigorating the process with new projects, themes, and change agents 8.Institutionalizing new approaches * Articulating the connections between the new behaviors and corporate success * Developing the means to ensure leadership development and succession II. Lessons from the critical mistakes: 1.
Not establishing enough sense of urgency - A transformation program
requires the aggressive cooperation of many individuals. Without
motivation, people won't help and the effort goes nowhere. 2. Not
creating a powerful guiding coalition - Companies that fail in this
phase usually underestimate the difficulties of producing change and
thus the importance of a powerful quiding coalition. 3. Lacking a
vision - Without a sensible vision, a transformation effort can easily
dissolve into a list of confusing and incompatible projects that can
take the organization in the wrong direction or nowhere at all. 4.
Undercommunicating the vision - Transformation is impossible unless
hundreds or thousands of people are willing to help, often to the point
of making short-term sacrifices. 5. Not removing obstacles to the
new vision - Sometimes the obstacle is the organizational structure:
narrow job categories can seriously undermine efforts to increase
productivity or make it very difficult even to think about customers.
Sometimes compensation or performance-appraisal systems make people
choose between the new vision and their own self-interest. Perhaps
worst of all are bosses who refuse to change and who make demands that
are inconsistent with the overall effort. 6. Not systematically
planning and creating short-term wins - Creating short-term wins is
different from hoping for short-term wins. The latter is passive, the
former active. In a successful transformation, managers actively look
for ways to obtain clear performance improvements, establish goals in
the yearly planning system, achieve the objectives, and reward the
people involved with recognition, promotions, and even money. 7.
Declaring victory too soon - Instead of declaring victory, leaders of
successful efforts use the credibility afforded by short-term wins to
tackle even bigger problems. 8. Not anchoring changes in the
corporation's culture - Change sticks when it becomes "the way we do
things around here," when it seeps into the bloodstream of the
corporate body. Until new behaviors are rooted in social norms and
shared values, they are subject to degradation as soon as the pressure
for change is removed. Finally, John P. Kotter writes, "There are
still more mistakes that people make, but these eight are the big ones.
In reality, even successful change efforts are messy and full of
surprises. But just as a relatively simple vision is needed to guide
people through a major change, so a vision of the change process can
reduce the error rate. And fewer errors can spell the difference
between success and failure." Highly recommended.
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