Change Framework Analysis to Business SituationOrder DescriptionInstructionsApply Kotters Change Framework to a business situation with which you are familiar. Describe the business situation, introduce and describe Kotters methodology, then apply Kotters change framework to the business situation in detail with the appropriate steps and expected outcomes to resolve the business situation. Do not forget to justify why Kotters framework is the best tool of choice for the situation.
An example business situation could be a software companys product extremely behind in technology architecture and features; prompting a corporate mandate to scrap the existing product and develop anew from starting point zero. Implications to undertaking this goal, overhaul needed in the companys mindset, working culture, motivation, incentive, and overall strategic steps needed to accomplish the goal within an aggressive timeline of 1year. Apply Kotters change framework to this situation.Leading Change
Why Transformation Efforts Fail
page 1
The Idea in Brief The Idea in Practice
COPYRIGHT 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Most major change initiativeswhether intended
to boost quality, improve culture, or
reverse a corporate death spiralgenerate
only lukewarm results. Many fail miserably.
Why? Kotter maintains that too many
managers dont 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 mistakessuch as
declaring victory too soon. Result? Loss of
momentum, reversal of hard-won gains,
and devastation of the entire transformation
effort.
By understanding the stages of change
and the pitfalls unique to each stageyou
boost your chances of a successful transformation.
The payoff? Your organization flexes
with tectonic shifts in competitors, markets,
and technologiesleaving rivals far behind.
To give your transformation effort the best chance of succeeding, take the right actions at each
stageand avoid common pitfalls.
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 commitment
and enough power to lead the
change effort.
Encourage them to work as a team
outside the normal hierarchy.
No prior experience in teamwork at the
top
Relegating team leadership to an HR,
quality, or strategic-planning executive
rather than a senior line manager
Create a
vision
Create a vision to direct the change effort.
Develop strategies for realizing that vision.
Presenting a vision thats too complicated
or vague to be communicated in five
minutes
Communicate
the vision
Use every vehicle possible to communicate
the new vision and strategies for
achieving it.
Teach new behaviors by the example of
the guiding coalition.
Undercommunicating the vision
Behaving in ways antithetical to the
vision
Empower
others to act
on the vision
Remove or alter systems or structures
undermining the vision.
Encourage risk taking and nontraditional
ideas, activities, and actions.
Failing to remove powerful individuals
who resist the change effort
Plan for and
create shortterm
wins
Define and engineer visible performance
improvements.
Recognize and reward employees contributing
to those improvements.
Leaving short-term successes up to
chance
Failing to score successes early enough
(12-24 months into the change effort)
Consolidate
improvements
and
produce
more change
Use increased credibility from early
wins to change systems, structures, and
policies undermining the vision.
Hire, promote, and develop employees
who can implement the vision.
Reinvigorate the change process with
new projects and change agents.
Declaring victory too soonwith the
first performance improvement
Allowing resistors to convince troops
that the war has been won
Institutionalize
new
approaches
Articulate connections between new
behaviors and corporate success.
Create leadership development and
succession plans consistent with the
new approach.
Not creating new social norms and
shared values consistent with changes
Promoting people into leadership positions
who dont personify the new
approach
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Why Transformation Efforts Fail
by John P. Kotter
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COPYRIGHT 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Leaders who successfully transform businesses do eight things right
(and they do them in the right order).
Editors Note:
Guiding change may be the ultimate
test of a leaderno business survives over
the long term if it cant 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 Kotters 1996 book
Leading Change
. It outlines eight critical success
factorsfrom 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 Kotters vocabulary
has entered the lexicon and in part because it
contains the kind of home truths that we recognize,
immediately, as if wed always known
them. A decade later, his work on leading
change remains definitive.
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 orLeading
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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
Most successful change efforts begin when
some individuals or some groups start to look
hard at a companys 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 wont 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;
lets 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. Managements 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 peoples 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 companys history, creating huge pressures
from Wall Street in the process. One division
president commissioned first-ever customer
satisfaction surveys, knowing full well that the
Now retired,
John P. Kotter
was the
Konosuke Matsushita Professor of
Leadership at Harvard Business School
in Boston.
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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 companys 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 transformation
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 companys
most senior executives because some people
just wont buy in, at least not at first. But in
the most successful cases, the coalition is
always pretty powerfulin terms of titles,
EIGHT STEPS TO TRANSFORMING
YOUR ORGANIZATION
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
dont 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
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2
3
4
5
6
7
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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 companys 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 dont 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
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 versiongetting
out of low value-added activitiescame 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 performance
appraisal from the human resources department,
the plants quality program, the cultural
change project in the sales force will not
add up in a meaningful way.
In failed transformations, you often find
plenty of plans, directives, and programs but
no vision. In one case, a company gave out
four-inch-thick notebooks describing its change
effort. In mind-numbing detail, the books
spelled out procedures, goals, methods, and
deadlines. But nowhere was there a clear and
compelling statement of where all this was
leading. Not surprisingly, most of the employees
with whom I talked were either confused
or alienated. The big, thick books did not rally
them together or inspire change. In fact, they
probably had just the opposite effect.
In a few of the less successful cases that I
have seen, management had a sense of direction,
but it was too complicated or blurry to
be useful. Recently, I asked an executive in a
midsize company to describe his vision and received
in return a barely comprehensible 30-
If you cant communicate
the vision to someone in
five minutes or less and
get a reaction that
signifies both
understanding and
interest, you are not
done.
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minute lecture. Buried in his answer were the
basic elements of a sound vision. But they were
burieddeeply.
A useful rule of thumb: If you cant communicate
the vision to someone in five minutes or
less and get a reaction that signifies both understanding
and interest, you are not yet done
with this phase of the transformation process.
Error 4: Undercommunicating the
Vision by a Factor of Ten
Ive seen three patterns with respect to communication,
all very common. In the first, a
group actually does develop a pretty good
transformation vision and then proceeds to
communicate it by holding a single meeting or
sending out a single communication. Having
used about 0.0001% of the yearly intracompany
communication, the group is startled
when few people seem to understand the new
approach. In the second pattern, the head of
the organization spends a considerable amount
of time making speeches to employee groups,
but most people still dont get it (not surprising,
since vision captures only 0.0005% of the
total yearly communication). In the third pattern,
much more effort goes into newsletters
and speeches, but some very visible senior executives
still behave in ways that are antithetical
to the vision. The net result is that cynicism
among the troops goes up, while belief in the
communication goes down.
Transformation is impossible unless hundreds
or thousands of people are willing to
help, often to the point of making short-term
sacrifices. Employees will not make sacrifices,
even if they are unhappy with the status quo,
unless they believe that useful change is possible.
Without credible communication, and a
lot of it, the hearts and minds of the troops are
never captured.
This fourth phase is particularly challenging
if the short-term sacrifices include job losses.
Gaining understanding and support is tough
when downsizing is a part of the vision. For
this reason, successful visions usually include
new growth possibilities and the commitment
to treat fairly anyone who is laid off.
Executives who communicate well incorporate
messages into their hour-by-hour activities.
In a routine discussion about a business
problem, they talk about how proposed solutions
fit (or dont fit) into the bigger picture. In
a regular performance appraisal, they talk
about how the employees behavior helps or
undermines the vision. In a review of a divisions
quarterly performance, they talk not
only about the numbers but also about how
the divisions executives are contributing to the
transformation. In a routine Q&A with employees
at a company facility, they tie their answers
back to renewal goals.
In more successful transformation efforts,
executives use all existing communication
channels to broadcast the vision. They turn
boring, unread company newsletters into lively
articles about the vision. They take ritualistic,
tedious quarterly management meetings and
turn them into exciting discussions of the
transformation. They throw out much of the
companys generic management education
and replace it with courses that focus on business
problems and the new vision. The guiding
principle is simple: Use every possible channel,
especially those that are being wasted on nonessential
information.
Perhaps even more important, most of the
executives I have known in successful cases of
major change learn to walk the talk. They
consciously attempt to become a living symbol
of the new corporate culture. This is often not
easy. A 60-year-old plant manager who has
spent precious little time over 40 years thinking
about customers will not suddenly behave
in a customer-oriented way. But I have witnessed
just such a person change, and change a
great deal. In that case, a high level of urgency
helped. The fact that the man was a part of the
guiding coalition and the vision-creation team
also helped. So did all the communication,
which kept reminding him of the desired behavior,
and all the feedback from his peers and
subordinates, which helped him see when he
was not engaging in that behavior.
Communication comes in both words and
deeds, and the latter are often the most powerful
form. Nothing undermines change more
than behavior by important individuals that is
inconsistent with their words.
Error 5: Not Removing Obstacles to
the New Vision
Successful transformations begin to involve
large numbers of people as the process
progresses. Employees are emboldened to try
new approaches, to develop new ideas, and to
provide leadership. The only constraint is that
the actions fit within the broad parameters of
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the overall vision. The more people involved,
the better the outcome.
To some degree, a guiding coalition empowers
others to take action simply by successfully
communicating the new direction. But communication
is never sufficient by itself. Renewal
also requires the removal of obstacles.
Too often, an employee understands the new
vision and wants to help make it happen, but
an elephant appears to be blocking the path.
In some cases, the elephant is in the persons
head, and the challenge is to convince the individual
that no external obstacle exists. But in
most cases, the blockers are very real.
Sometimes the obstacle is the organizational
structure: Narrow job categories can seriously
undermine efforts to increase productivity
or make it very difficult even to think
about customers. Sometimes compensation
or performance-appraisal systems make people
choose between the new vision and their
own self-interest. Perhaps worst of all are bosses
who refuse to change and who make demands
that are inconsistent with the overall effort.
One company began its transformation process
with much publicity and actually made
good progress through the fourth phase. Then
the change effort ground to a halt because the
officer in charge of the companys largest division
was allowed to undermine most of the
new initiatives. He paid lip service to the process
but did not change his behavior or encourage
his managers to change. He did not reward
the unconventional ideas called for in the vision.
He allowed human resource systems to
remain intact even when they were clearly inconsistent
with the new ideals. I think the officers
motives were complex. To some degree,
he did not believe the company needed major
change. To some degree, he felt personally threatened
by all the change. To some degree, he was
afraid that he could not produce both change
and the expected operating profit. But despite
the fact that they backed the renewal effort,
the other officers did virtually nothing to stop
the one blocker. Again, the reasons were complex.
The company had no history of confronting
problems like this. Some people were afraid
of the officer. The CEO was concerned that he
might lose a talented executive. The net result
was disastrous. Lower-level managers concluded
that senior management had lied to them
about their commitment to renewal, cynicism
grew, and the whole effort collapsed.
In the first half of a transformation, no organization
has the momentum, power, or time to
get rid of all obstacles. But the big ones must
be confronted and removed. If the blocker is a
person, it is important that he or she be
treated fairly and in a way that is consistent
with the new vision. Action is essential, both
to empower others and to maintain the credibility
of the change effort as a whole.
Error 6: Not Systematically Planning
for, and Creating, Short-Term Wins
Real transformation takes time, and a renewal
effort risks losing momentum if there are no
short-term goals to meet and celebrate. Most
people wont go on the long march unless they
see compelling evidence in 12 to 24 months
that the journey is producing expected results.
Without short-term wins, too many people
give up or actively join the ranks of those people
who have been resisting change.
One to two years into a successful transformation
effort, you find quality beginning to go
up on certain indices or the decline in net income
stopping. You find some successful new
product introductions or an upward shift in
market share. You find an impressive productivity
improvement or a statistically higher customer
satisfaction rating. But whatever the
case, the win is unambiguous. The result is not
just a judgment call that can be discounted by
those opposing change.
Creating short-term wins is different from
hoping for short-term wins. The latter is passive,
the former active. In a successful transformation,
managers actively look for ways to obtain
clear performance improvements, establish
goals in the yearly planning system, achieve
the objectives, and reward the people involved
with recognition, promotions, and even money.
For example, the guiding coalition at a U.S.
manufacturing company produced a highly
visible and successful new product introduction
about 20 months after the start of its renewal
effort. The new product was selected
about six months into the effort because it met
multiple criteria: It could be designed and
launched in a relatively short period, it could
be handled by a small team of people who
were devoted to the new vision, it had upside
potential, and the new product-development
team could operate outside the established departmental
structure without practical problems.
Little was left to chance, and the win
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boosted the credibility of the renewal process.
Managers often complain about being forced
to produce short-term wins, but Ive found that
pressure can be a useful element in a change
effort. When it becomes clear to people that
major change will take a