Over the past 20 years, I have seen many companies try to reshape themselves into considerably better competitors. Perhaps we all know of a few of these large companies like General Motors, Wal-Mart, and Amazon, to name a few. There are also many small to mid-sized companies that have tried to change in an effort to become a better, faster, stronger company. Normally, we hear terms like “rightsizing”, “reengineering”, “management shift”, and “turnaround” to describe a process the company is embarking upon to reach new heights. Although, the underlying tone is that of business change in order to handle a new challenging market or circumstance. Some changes have been enormous failures while others have been success stories but; however, sadly most fall in the middle and, if anything, more towards the side of failure. There are lessons to be learned with each, and I find it far easier to study from those that have traveled before than reinvent the wheel each time.
The approach in the more successful cases is routinely one in which a particular series of steps were followed throughout the process. It is sometimes easy to think corporate change is straightforward and there is somewhat of a short path to the end result; however, this thinking will get you less than a desired outcome. Even though following a set of steps frequently results in taking longer, omitting steps in the process or shortcutting a step typically results in a failed attempt at actually leading change.
Regarded by many as the authority on leadership and change, Dr. John P. Kotter is a best-selling author, award winning business and management thought leader, business entrepreneur and Harvard Professor. Over the course of four decades, he observed countless leaders and organizations as they were trying to transform or execute their strategies. He identified and extracted the success factors and combined them into a methodology, the award-winning 8-Step Process for Leading Change.
The market environments and world around us continue to change at a much faster pace than before. It may be wise to arm yourself with the steps necessary to lead your company or department through a successful change effort.
Step 1. Creating a Sense of Urgency
Leaders must describe an opportunity or outcome that is attractive to the individuals involved. This request must touch their heads as well as their hearts. Kotter’s research has shown that a consistent pattern behind the failures is that a sense of urgency was not generated and sustained.
Step 2. Build a Guiding Coalition
The Guiding Coalition is an alliance or team and can take many shapes inside the company. However, it is important that the team consist of members from multiple layers of the organization, represent several functions, receive information about the organization at all levels, and integrate that information into new ways of working. In fact, if a Guiding Coalition is not formed, the organization will continue to rely on traditional, hierarchical ways of operating which devalue the change rather than accelerate the desired effects.
Step 3. Form Strategic Vision and Initiatives
Dr. Kotter defines strategic initiatives as targeted and coordinated activities. If these activities are designed and executed fast enough and well enough, they will make the vision of change become a reality.
The focus here is on actions and initiatives that will advance the opportunity or change. These actions and initiatives are constructed by your diverse set of employees (from above). This will help clarify to your employees exactly how the future will be different and better from the past or present.
Step 4. Enlist a Volunteer Army
In order for large-scale change to occur, significant numbers of employees are needed to assemble for an opportunity and all row in the same direction. In order to build this volunteer group of insiders, you simply need to allow employees the choice to participate and give them the approval to engage in the journey.
Step 5. Enable Action by Removing Barriers
Leaders should remove barriers, such as inefficient processes and archaic standards, to provide the freedom necessary for employees to work across boundaries and create a real impact inside the company. Dr Kotter declares that innovation is less about generating brand new ideas and more about knocking down barriers to making those ideas a reality.
Step 6. Generate Short-Term Wins
Wins must be collected, sorted and communicated early and often. This not only tracks progress but also energizes your volunteers to continue driving change. A win can be actions taken, lessons learned, process improved, a new behavior, or anything big or small that moves the ball forward toward the opportunity.
Step 7. Sustain Acceleration
Successes will start to accrue and build momentum. This is when your increasing credibility can improve systems, structures, and policies. This is not the time to take your foot off the gas. In fact you may be able to speed up the change.
Step 8. Institute Change
You first have to build the muscle and then you can successfully alter employee’s actions by connecting the dots between new actions and better outcomes. These new behaviors or changes should be repeated over the long term until they become the new culture. This is when the new opportunity or outcome first presented has been successfully integrated into the organization and the change is complete.
Perhaps there are more steps than just the 8 outlined above. According to Dr. Kotter, if you follow these 8 steps your likelihood of achieving a successful change will greatly increase. I understand in such a summarized article everything is made to sound a bit basic, but even successful changes can be chaotic and full of eye-openers.
Brent McClure is a CPA, Consultant, and Speaker. He will be speaking on this topic along with others at CPE events throughout Alabama. Register for Brent's courses here.