NYU Important Factors for Insuring Transformation Will be Successful Essay Response After reading the article, Leading Change, Why Transformation Efforts F

NYU Important Factors for Insuring Transformation Will be Successful Essay Response After reading the article, Leading Change, Why Transformation Efforts Fail, what do you feel are important factors for insuring the transformation will be successful? For the exclusive use of J. Guo, 2020.
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B E S T O F H BR
Leaders who successfully
transform businesses do eight
things right (and they do them
in the right order).
Leading Change
Why Transformation Efforts Fail
by John P. Kotter
•
Included with this full-text Harvard Business Review article:
1 Article Summary
The Idea in Brief—the core idea
The Idea in Practice—putting the idea to work
2 Leading Change: Why Transformation Efforts Fail
10 Further Reading
A list of related materials, with annotations to guide further
exploration of the article’s ideas and applications
Reprint R0701J
This document is authorized for use only by Jiamin Guo in Transforming Organizations – Summer 2020-1 taught by CARLO ESIDORE, New York University from Jun 2020 to Oct 2020.
For the exclusive use of J. Guo, 2020.
BEST OF HBR
Leading Change
Why Transformation Efforts Fail
The Idea in Brief
The Idea in Practice
Most major change initiatives—whether intended to boost quality, improve culture, or
reverse a corporate death spiral—generate
only lukewarm results. Many fail miserably.
To give your transformation effort the best chance of succeeding, take the right actions at each
stage—and avoid common pitfalls.
Why? Kotter maintains that too many
managers don’t realize transformation is a
process, not an event. It advances through
stages that build on each other. And it
takes years. Pressured to accelerate the
process, managers skip stages. But shortcuts never work.
Equally troubling, even highly capable
managers make critical mistakes—such as
declaring victory too soon. Result? Loss of
momentum, reversal of hard-won gains,
and devastation of the entire transformation effort.
COPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
By understanding the stages of change—
and the pitfalls unique to each stage—you
boost your chances of a successful transformation. The payoff? Your organization flexes
with tectonic shifts in competitors, markets,
and technologies—leaving rivals far behind.
Stage
Actions Needed
Pitfalls
Establish a
sense of
urgency
• Examine market and competitive realities for potential crises and untapped
opportunities.
• Convince at least 75% of your managers that the status quo is more dangerous than the unknown.
• Underestimating the difficulty of driving
people from their comfort zones
• Becoming paralyzed by risks
Form a powerful guiding
coalition
• Assemble a group with shared commit- • No prior experience in teamwork at the
top
ment and enough power to lead the
change effort.
• Relegating team leadership to an HR,
quality, or strategic-planning executive
• Encourage them to work as a team
rather than a senior line manager
outside the normal hierarchy.
Create a
vision
• Create a vision to direct the change effort. • Presenting a vision that’s too complicat• Develop strategies for realizing that vision. ed or vague to be communicated in five
minutes
Communicate • Use every vehicle possible to commu- • Undercommunicating the vision
the vision
nicate the new vision and strategies for • Behaving in ways antithetical to the
achieving it.
vision
• Teach new behaviors by the example of
the guiding coalition.
Empower
others to act
on the vision
• Failing to remove powerful individuals
• Remove or alter systems or structures
who resist the change effort
undermining the vision.
• Encourage risk taking and nontraditional ideas, activities, and actions.
Plan for and
create shortterm wins
• Define and engineer visible performance improvements.
• Recognize and reward employees contributing to those improvements.
Consolidate
improvements and
produce
more change
• Declaring victory too soon—with the
• Use increased credibility from early
wins to change systems, structures, and first performance improvement
policies undermining the vision.
• Allowing resistors to convince “troops”
that the war has been won
• Hire, promote, and develop employees
who can implement the vision.
• Reinvigorate the change process with
new projects and change agents.
Institutionalize • Articulate connections between new
new
behaviors and corporate success.
approaches
• Create leadership development and
succession plans consistent with the
new approach.
• Leaving short-term successes up to
chance
• Failing to score successes early enough
(12-24 months into the change effort)
• Not creating new social norms and
shared values consistent with changes
• Promoting people into leadership positions who don’t personify the new
approach
page 1
This document is authorized for use only by Jiamin Guo in Transforming Organizations – Summer 2020-1 taught by CARLO ESIDORE, New York University from Jun 2020 to Oct 2020.
For the exclusive use of J. Guo, 2020.
Leaders who successfully transform businesses do eight things right
(and they do them in the right order).
BEST OF HBR
Leading Change
Why Transformation Efforts Fail
by John P. Kotter
COPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Editor’s Note: Guiding change may be the ultimate test of a leader—no business survives over
the long term if it can’t reinvent itself. But,
human nature being what it is, fundamental
change is often resisted mightily by the people it
most affects: those in the trenches of the business. Thus, leading change is both absolutely essential and incredibly difficult.
Perhaps nobody understands the anatomy
of organizational change better than retired
Harvard Business School professor John P.
Kotter. This article, originally published in the
spring of 1995, previewed Kotter’s 1996 book
Leading Change . It outlines eight critical success factors—from establishing a sense of extraordinary urgency, to creating short-term
wins, to changing the culture (“the way we do
things around here”). It will feel familiar when
you read it, in part because Kotter’s vocabulary
has entered the lexicon and in part because it
contains the kind of home truths that we recognize, immediately, as if we’d always known
them. A decade later, his work on leading
change remains definitive.
harvard business review • january 2007
Over the past decade, I have watched more
than 100 companies try to remake themselves
into significantly better competitors. They
have included large organizations (Ford) and
small ones (Landmark Communications),
companies based in the 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). These efforts have gone under many banners: total
quality management, reengineering, rightsizing, 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 or-
page 2
This document is authorized for use only by Jiamin Guo in Transforming Organizations – Summer 2020-1 taught by CARLO ESIDORE, New York University from Jun 2020 to Oct 2020.
For the exclusive use of J. Guo, 2020.
Leading Change •• •B EST OF HBR
ganizations in the increasingly competitive
business environment of the coming decade.
The most general lesson to be learned from
the more successful cases is that the change
process goes through a series of phases that, in
total, usually require a considerable length of
time. Skipping steps creates only the illusion of
speed and never produces a satisfying result. A
second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating
hard-won gains. Perhaps because we have relatively little experience in renewing organizations, even very capable people often make at
least one big error.
Error 1: Not Establishing a Great
Enough Sense of Urgency
Now retired, John P. Kotter was the
Konosuke Matsushita Professor of
Leadership at Harvard Business School
in Boston.
harvard business review • january 2007
Most successful change efforts begin when
some individuals or some groups start to look
hard at a company’s competitive situation,
market position, technological trends, and financial performance. They focus on the potential revenue drop when an important
patent expires, the five-year trend in declining
margins in a core business, or an emerging
market that everyone seems to be ignoring.
They then find ways to communicate this information broadly and dramatically, especially
with respect to crises, potential crises, or great
opportunities that are very timely. This first
step is essential because just getting a transformation program started requires the aggressive cooperation of many individuals. Without
motivation, people won’t help, and the effort
goes nowhere.
Compared with other steps in the change
process, phase one can sound easy. It is not.
Well over 50% of the companies I have
watched fail in this first phase. What are the
reasons for that failure? Sometimes executives
underestimate how hard it can be to drive people out of their comfort zones. Sometimes they
grossly overestimate how successful they have
already been in increasing urgency. Sometimes
they lack patience: “Enough with the preliminaries; let’s get on with it.” In many cases, executives become paralyzed by the downside possibilities. They worry that employees with
seniority will become defensive, that morale
will drop, that events will spin out of control,
that short-term business results will be jeopardized, that the stock will sink, and that they
will be blamed for creating a crisis.
A paralyzed senior management often comes
from having too many managers and not
enough leaders. Management’s mandate is to
minimize risk and to keep the current system
operating. Change, by definition, requires creating a new system, which in turn always demands leadership. Phase one in a renewal
process typically goes nowhere until enough
real leaders are promoted or hired into seniorlevel jobs.
Transformations often begin, and begin
well, when an organization has a new head
who is a good leader and who sees the need for
a major change. If the renewal target is the entire company, the CEO is key. If change is
needed in a division, the division general manager is key. When these individuals are not new
leaders, great leaders, or change champions,
phase one can be a huge challenge.
Bad business results are both a blessing and
a curse in the first phase. On the positive side,
losing money does catch people’s attention.
But it also gives less maneuvering room. With
good business results, the opposite is true: Convincing people of the need for change is much
harder, but you have more resources to help
make changes.
But whether the starting point is good performance or bad, in the more successful cases I
have witnessed, an individual or a group always facilitates a frank discussion of potentially unpleasant facts about new competition,
shrinking margins, decreasing market share,
flat earnings, a lack of revenue growth, or
other relevant indices of a declining competitive position. Because there seems to be an almost universal human tendency to shoot the
bearer of bad news, especially if the head of
the organization is not a change champion, executives in these companies often rely on outsiders to bring unwanted information. Wall
Street analysts, customers, and consultants can
all be helpful in this regard. The purpose of all
this activity, in the words of one former CEO of
a large European company, is “to make the status quo seem more dangerous than launching
into the unknown.”
In a few of the most successful cases, a group
has manufactured a crisis. One CEO deliberately engineered the largest accounting loss in
the company’s history, creating huge pressures
from Wall Street in the process. One division
president commissioned first-ever customer
satisfaction surveys, knowing full well that the
page 3
This document is authorized for use only by Jiamin Guo in Transforming Organizations – Summer 2020-1 taught by CARLO ESIDORE, New York University from Jun 2020 to Oct 2020.
For the exclusive use of J. Guo, 2020.
Leading Change •• •B EST OF HBR
results would be terrible. He then made these
findings public. On the surface, such moves can
look unduly risky. But there is also risk in playing it too safe: When the urgency rate is not
pumped up enough, the transformation process cannot succeed, and the long-term future
of the organization is put in jeopardy.
When is the urgency rate high enough?
From what I have seen, the answer is when
about 75% of a company’s management is honestly convinced that business as usual is totally
unacceptable. Anything less can produce very
serious problems later on in the process.
Error 2: Not Creating a Powerful
Enough Guiding Coalition
Major renewal programs often start with just
one or two people. In cases of successful trans-
formation efforts, the leadership coalition
grows and grows over time. But whenever
some minimum mass is not achieved early in
the effort, nothing much worthwhile happens.
It is often said that major change is impossible unless the head of the organization is an
active supporter. What I am talking about
goes far beyond that. In successful transformations, the chairman or president or division general manager, plus another five or
15 or 50 people, come together and develop
a shared commitment to excellent performance through renewal. In my experience,
this group never includes all of the company’s
most senior executives because some people
just won’t buy in, at least not at first. But in
the most successful cases, the coalition is
always pretty powerful—in terms of titles,
EIGHT STEPS TO TRANSFORMING
YOUR ORGANIZATION
1
2
3
4
5
6
7
8
harvard business review • january 2007
Establishing a Sense of Urgency
• Examining market and competitive realities
• Identifying and discussing crises, potential crises, or major opportunities
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
Creating a Vision
• Creating a vision to help direct the change effort
• Developing strategies for achieving that vision
Communicating the Vision
• Using every vehicle possible to communicate the new vision and strategies
• Teaching new behaviors by the example of the guiding coalition
Empowering Others to Act on the Vision
• Getting rid of obstacles to change
• Changing systems or structures that seriously undermine the vision
• Encouraging risk taking and nontraditional ideas, activities, and actions
Planning for and Creating Short-Term Wins
• Planning for visible performance improvements
• Creating those improvements
• Recognizing and rewarding employees involved in the improvements
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
Institutionalizing New Approaches
• Articulating the connections between the new behaviors and corporate
success
• Developing the means to ensure leadership development and succession
page 4
This document is authorized for use only by Jiamin Guo in Transforming Organizations – Summer 2020-1 taught by CARLO ESIDORE, New York University from Jun 2020 to Oct 2020.
For the exclusive use of J. Guo, 2020.
Leading Change •• •B EST OF HBR
If you can’t communicate
the vision to someone in
five minutes or less and
get a reaction that
signifies both
understanding and
interest, you are not
done.
information and expertise, reputations, and
relationships.
In both small and large organizations, a successful guiding team may consist of only three
to five people during the first year of a renewal
effort. But in big companies, the coalition
needs to grow to the 20 to 50 range before
much progress can be made in phase three and
beyond. Senior managers always form the
core of the group. But sometimes you find
board members, a representative from a key
customer, or even a powerful union leader.
Because the guiding coalition includes members who are not part of senior management,
it tends to operate outside of the normal hierarchy by definition. This can be awkward, but
it is clearly necessary. If the existing hierarchy
were working well, there would be no need for
a major transformation. But since the current
system is not working, reform generally demands activity outside of formal boundaries,
expectations, and protocol.
A high sense of urgency within the managerial ranks helps enormously in putting a guiding coalition together. But more is usually required. Someone needs to get these people
together, help them develop a shared assessment of their company’s problems and opportunities, and create a minimum level of trust
and communication. Off-site retreats, for two
or three days, are one popular vehicle for accomplishing this task. I have seen many groups
of five to 35 executives attend a series of these
retreats over a period of months.
Companies that fail in phase two usually underestimate the difficulties of producing change
and thus the importance of a powerful guiding
coalition. Sometimes they have no history of
teamwork at the top and therefore undervalue
the importance of this type of coalition. Sometimes they expect the team to be led by a staff
executive from human resources, quality, or
strategic planning instead of a key line manager. No matter how capable or dedicated the
staff head, groups without strong line leadership never achieve the power that is required.
Efforts that don’t have a powerful enough
guiding coalition can make apparent progress
for a while. But, sooner or later, the opposition
gathers itself together and stops the change.
Error 3: Lacking a Vision
In every successful transformation effort that I
have seen, the guiding coalition develops a
harvard business review • january 2007
picture of the future that is relatively easy to
communicate and appeals to customers, stockholders, and employees. A vision always goes
beyond the numbers that are typically found
in five-year plans. A vision says something that
helps clarify the direction in which an organization needs to move. Sometimes the first
draft comes mostly from a single individual. It
is usually a bit blurry, at least initially. But
after the coalition works at it for three or five
or even 12 months, something much better
emerges through their tough analytical thinking and a little dreaming. Eventually, a strategy for achieving that vision is also developed.
In one midsize European company, the first
pass at a vision contained two-thirds of the
basic ideas that were in the final product. The
concept of global reach was in the initial version from the beginning. So was the idea of becoming preeminent in certain businesses. But
one central idea in the final version—getting
out of low value-added activities—came only
after a series of discussions over a period of
several months.
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. Without a sound vision, the
reengineering project in the accounting department, the new 360-degree per…
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