Leading Change

by John P. Kotter

I am sometimes amazed at how many people try to transform organizations using methods that look like the first two scenarios: authoritarian decree and micromanagement. Both approaches have been applied widely in enterprises over the last century, but mostly for maintaining existing systems, not transforming those systems into something better. When the goal is behavior change, unless the boss is extremely powerful, authoritarian decree often works poorly even in simple situations, like the apple tree case. Increasingly, in complex organizations, this approach doesn’t work at all. Without the power of kings and queens behind it, authoritarianism is unlikely to break through all the forces of resistance. People will ignore you or pretend to cooperate while doing everything possible to undermine your efforts. Micromanagement tries to get around this problem by specifying what employees should do in detail and then monitoring compliance. This tactic can break through some of the barriers to change, but in an increasingly unacceptable amount of time. Because the creation and communication of detailed plans is deadly slow, the change produced this way tends to be highly incremental. Only the approach used in the third scenario above has the potential to break through all the forces that support the status quo and to encourage the kind of dramatic shifts found in successful transformations. (See figure 5–1.) This approach is based on vision—a central component of all great leader...

It is our goal to become the world leader in our industry within ten years. As we use this term, leadership means more revenue, more profit, more innovation that serves our customers’ needs, and a more attractive place to work than any other competitor. Achieving this ambitious objective will probably require double-digit revenue and profit growth each year. It will surely require that we become less U.S. oriented, more externally focused, considerably less bureaucratic, and more of a service instead of a product company. We sincerely believe that if we work together we can achieve this change, and in the process create a firm that will be admired by our stockholders, customers, employees, and communities.

The vision driving our department’s reengineering effort is simple. We want to reduce our costs by at least 30 percent and increase the speed with which we can respond to customers by at least 40 percent. These are stretch goals, but we know based on the pilot project in Austin that they are achievable if we all work together. When this is completed, in approximately three years, we will have leapfrogged our biggest competitors and achieved all the associated benefits: better satisfied customers, increased revenue growth, more job security, and the enormous pride that comes from great accomplishments.

Creating an effective vision • First draft: The process often starts with an initial statement from a single individual, reflecting both his or her dreams and real marketplace needs. • Role of the guiding coalition: The first draft is always modeled over time by the guiding coalition or an even larger group of people. • Importance of teamwork: The group process never works well without a minimum of effective teamwork. • Role of the head and the heart: Both analytical thinking and a lot of dreaming are essential throughout the activity. • Messiness of the process: Vision creation is usually a process of two steps forward and one back, movement to the left and then to the right. • Time frame: Vision is never created in a single meeting. The activity takes months, sometimes years. • End product: The process results in a direction for the future that is desirable, feasible, focused, flexible, and is conveyable in five minutes or less.