Leading Change

by John P. Kotter

Vision plays a key role in producing useful change by helping to direct, align, and inspire actions on the part of large numbers of people. Without an appropriate vision, a transformation effort can easily dissolve into a list of confusing, incompatible, and time-consuming projects that go in the wrong direction or nowhere at all.

Sensing the difficulty in producing change, some people try to manipulate events quietly behind the scenes and purposefully avoid any public discussion of future direction. But without a vision to guide decision making, each and every choice employees face can dissolve into an interminable debate. The smallest of decisions can generate heated conflict that saps energy and destroys morale.

In many failed transformations, you find plans and programs trying to play the role of vision.

A useful rule of thumb: Whenever you cannot describe the vision driving a change initiative in five minutes or less and get a reaction that signifies both understanding and interest, you are in for trouble.

Management is a set of processes that can keep a complicated system of people and technology running smoothly. The most important aspects of management include planning, budgeting, organizing, staffing, controlling, and problem solving. Leadership is a set of processes that creates organizations in the first place or adapts them to significantly changing circumstances. Leadership defines what the future should look like, aligns people with that vision, and inspires them to make it happen despite the obstacles

Arrogant managers can overevaluate their current performance and competitive position, listen poorly, and learn slowly. Inwardly focused employees can have difficulty seeing the very forces that present threats and opportunities. Bureaucratic cultures can smother those who want to respond to shifting conditions. And the lack of leadership leaves no force inside these organizations to break out of the morass. The combination of cultures that resist change and managers who have not been taught how to create change is lethal.

Transformation requires sacrifice, dedication, and creativity, none of which usually comes with coercion.

Establishing a sense of urgency is crucial to gaining needed cooperation.

Seventh, when enterprising young employees went out of their way to collect external performance feedback, they were often treated like lepers. In that corporate culture, such behavior was seen as inappropriate because it might hurt someone, reduce morale, or lead to arguments (that is, honest discussions).

Never underestimate the magnitude of the forces that reinforce complacency and that help maintain the status quo.

Putting Together the Guiding Coalition The first step in putting together the kind of team that can direct a change effort is to find the right membership. Four key characteristics seem to be essential to effective guiding coalitions. They are: 1. POSITION POWER: Are enough key players on board, especially the main line managers, so that those left out cannot easily block progress? 2. EXPERTISE: Are the various points of view—in terms of discipline, work experience, nationality, etc.—relevant to the task at hand adequately represented so that informed, intelligent decisions will be made? 3. CREDIBILITY: Does the group have enough people with good reputations in the firm so that its pronouncements will be taken seriously by other employees? 4. LEADERSHIP: Does the group include enough proven leaders to be able to drive the change process?

Vision refers to a picture of the future with some implicit or explicit commentary on why people should strive to create that future.

Characteristics of an effective vision • Imaginable: Conveys a picture of what the future will look like • Desirable: Appeals to the long-term interests of employees, customers, stockholders, and others who have a stake in the enterprise • Feasible: Comprises realistic, attainable goals • Focused: Is clear enough to provide guidance in decision making • Flexible: Is general enough to allow individual initiative and alternative responses in light of changing conditions • Communicable: Is easy to communicate; can be successfully explained within five minutes

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.

Yet all effective visions seem to be grounded in sensible values as well as analytically sound thinking, and the values have to be ones that resonate deeply with the executives on the guiding coalition. As a result, creating a vision is not just a strategy exercise in assessing environmental opportunities and organizational capabilities. The process very much involves getting in touch with ourselves—who we are and what we care about.

Getting a hundred, a thousand, or ten thousand people to understand and accept a particular vision is usually an enormously challenging undertaking.

Key elements in the effective communication of vision • Simplicity: All jargon and technobabble must be eliminated. • Metaphor, analogy, and example: A verbal picture is worth a thousand words. • Multiple forums: Big meetings and small, memos and newspapers, formal and informal interaction—all are effective for spreading the word. • Repetition: Ideas sink in deeply only after they have been heard many times. • Leadership by example: Behavior from important people that is inconsistent with the vision overwhelms other forms of communication. • Explanation of seeming inconsistencies: Unaddressed inconsistencies undermine the credibility of all communication. • Give-and-take: Two-way communication is always more powerful than one-way communication.

If people don’t accept a vision, the next two steps in the transformation process—empowering individuals for broad-based action and creating short-term wins—will fail.

Whenever structural barriers are not removed in a timely way, the risk is that employees will become so frustrated that they will sour on the entire transformational effort. If that happens, even if you eventually reorganize correctly, you’ve lost the energy needed to use the new structure to make the vision a reality.

Empowering people to effect change • Communicate a sensible vision to employees: If employees have a shared sense of purpose, it will be easier to initiate actions to achieve that purpose. • Make structures compatible with the vision: Unaligned structures block needed action. • Provide the training employees need: Without the right skills and attitudes, people feel disempowered. • Align information and personnel systems to the vision: Unaligned systems also block needed action. • Confront supervisors who undercut needed change: Nothing disempowers people the way a bad boss can.

Running a transformation effort without serious attention to short-term wins is extremely risky

A good short-term win has at least these three characteristics: 1. It’s visible; large numbers of people can see for themselves whether the result is real or just hype. 2. It’s unambiguous; there can be little argument over the call. 3. It’s clearly related to the change effort.

The role of short-term wins • Provide evidence that sacrifices are worth it: Wins greatly help justify the short-term costs involved. • Reward change agents with a pat on the back: After a lot of hard work, positive feedback builds morale and motivation. • Help fine-tune vision and strategies: Short-term wins give the guiding coalition concrete data on the viability of their ideas. • Undermine cynics and self-serving resisters: Clear improvements in performance make it difficult for people to block needed change. • Keep bosses on board: Provides those higher in the hierarchy with evidence that the transformation is on track. • Build momentum: Turns neutrals into supporters, reluctant supporters into active helpers, etc.

In highly successful change efforts, you don’t hear much dialogue like this. Short-term wins don’t come about as the result of a little luck. They aren’t merely possibilities. People don’t just hope and pray for performance improvements. They plan for short-term wins, organize accordingly, and implement the plan to make things happen.

I’m confident of one cardinal rule: Whenever you let up before the job is done, critical momentum can be lost and regression may follow. Until changed practices attain a new equilibrium and have been driven into the culture, they can be very fragile. Three years of work can come undone with remarkable speed.

Without much experience, we often don’t adequately appreciate a crucial fact: that changing highly interdependent settings is extremely difficult because, ultimately, you have to change nearly everything (see figure 9–1). Because of all the interconnections, you can rarely move just one element by itself. You have to move dozens or hundreds or thousands of elements, which is difficult and time consuming and can rarely if ever be accomplished by just a few people.

Culture refers to norms of behavior and shared values among a group of people. Norms of behavior are common or pervasive ways of acting that are found in a group and that persist because group members tend to behave in ways that teach these practices to new members, rewarding those who fit in and sanctioning those who do not. Shared values are important concerns and goals shared by most of the people in a group that tend to shape group behavior and that often persist over time even when group membership changes.

Since the kind of organization we are describing here delegates a great deal of authority to lower levels, excellence in management means that the empowered employees handle this responsibility well. That, in turn, means they must receive sufficient management training and be supported with the appropriate systems.

All organizations have unneeded internal interconnections between people and groups.

In total, all of the practices I’ve been describing here will help an organization adapt to a rapidly changing environment. Creating those practices so they stick is an exercise in creating adaptive corporate cultures.

Just as organizations are going to be forced to learn, change, and constantly reinvent themselves in the twenty-first century, so will increasing numbers of individuals. Lifelong learning and the leadership skills that can be developed through it were relevant to only a small percentage of the population until recently. That percentage will undoubtedly grow over the next few decades.

Lifelong learners actively solicit opinions and ideas from others. They don’t make the assumption that they know it all or that most other people have little to contribute. Just the opposite, they believe that with the right approach, they can learn from anyone under almost any circumstance. Much more than the average person, lifelong learners also listen carefully, and they do so with an open mind. They don’t assume that listening will produce big ideas or important information very often. Quite the contrary. But they know that careful listening will help give them accurate feedback on the effect of their actions. And without honest feedback, learning becomes almost impossible.

Lifelong learners overcome a natural human tendency to shy away from or abandon habits that produce short-term pain. By surviving difficult experiences, they build up a certain immunity to hardship. With clarity of thought, they come to realize the importance of both these habits and lifelong learning. But most of all, their goals and aspirations facilitate the development of humility, openness, willingness to take risks, and the capacity to listen. The very best lifelong learners and leaders I’ve known seem to have high standards, ambitious goals, and a real sense of mission in their lives. Such goals and aspirations spur them on, put their accomplishments in a humbling perspective, and help them endure the short-term pain associated with growth. Sometimes this sense of mission is developed early in life, sometimes later in adulthood, often a combination of the two. Whatever the case, their aspirations help keep them from sliding into a comfortable, safe routine characterized by little sensible risk taking, a relatively closed mind, a minimum of reaching out, and little listening.

A strategy of embracing the past will probably become increasingly ineffective over the next few decades. Better for most of us to start learning now how to cope with change, to develop whatever leadership potential we have, and to help our organizations in the transformation process. Better for most of us, despite the risks, to leap into the future. And to do so sooner rather than later.