“The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades.” – John P. Kotter.
Takeaway: Change doesn’t just happen in an organization, it needs to be planned, communicated and executed.
In an ever changing world, businesses need to change too to stay ahead of their competition. Whether it’s the evolving needs of customers, technological advancement, the globalization of markets or changing expectations of the workforce – adaptability is essential for companies to survive and thrive. However, who doesn’t know companies that failed because they didn’t quite manage to change fast enough? While in some cases failure is caused by the wrong strategic bet and essentially changing in the wrong direction, often organizations fail to plan and lead the change process.
Arguably the thought leader in the field of change management is Harvard Business School professor and author John Paul Kotter. His bestseller “Leading Change” is considered the key text in this domain and describes a hands-on eight step process on how to lead change in an organization that I’ll summarize below:
- Establishing a sense of urgency: Before people are willing to change they need to understand the reasons why and get excited to support the change. This step is really crucial and shouldn’t be rushed. Talk to the people and explain to them what opportunities or threats are making the change necessary and what could happen if the company doesn’t change. Only when you have the majority of the people bought into the change, proceed with the following steps.
- Creating a guiding coalition: Build a team of influential people inside the organization that will lead and drive the change. Influence doesn’t necessary equal hierarchical status, so also look for people who are trusted and well heard even though they are not in the top ranks.
- Developing a vision and strategy: Create a big and clear vision that will have the whole organization and its stakeholders understand where the company is going in the future. Break this vision down into concrete initiatives and projects.
- Communicating the change vision: Talk about your vision whenever you get the chance to do so. Make sure to communicate it often and loudly and make it the center of everything the company does. Employees should be able to tie everything the company does back to the strategic vision. It’s also essential that the leadership team embodies the vision and acts accordingly otherwise no one else will follow.
- Empowering employees for broad-based action: Now the focus shifts from communicating the change to making it happen. It’s key that everyone in the organization is actually capable and empowered to apply the vision to their area of responsibility. Managers need to provide employees with the required resources, address their concerns and help them to overcome obstacles. The train has left the station and it’s important that it doesn’t stop at any point.
- Generating short-term wins: To build momentum and keep people engaged and motivated to make the change happen it’s essential to celebrate short-term wins. If employees don’t see that the organization is making progress you might lose them or turn them into critics. Therefore, identify areas where measurable and visible progress has been made, communicate the success to everyone involved and reward those who drove it.
- Consolidating gains and producing more change: While it’s important to celebrate early successes, Kotter also warns to announce completion too early. Continue to create urgency for change, prove that the strategy is working, empower employees and revise your change plan based on what you have learned earlier in the process.
- Anchoring new approaches in the culture: Finally, in order for the change to be permanent it needs to be anchored in the company culture. Identify what you need to do to ingrain the new processes in the everyday doings and to prevent old behaviors or approaches from coming back. Tell success stories, reward key drivers of the change and learn from the process for the next change.
For a more detailed discussion of these 8 steps, I recommend reading Kotter’s book “Leading Change”. Also, have a look at “Our Iceberg is Melting” which is a very plastic and entertaining application of these steps to a group of penguins who have to move their home in order to survive.