Book Review: Leading Change by John P. Kotter

Leading Change by John P. Kotter. Harvard Business School Press, 1996.

In light of the increasing rate of change in the business environment due to factors such as technological advances and globalization, the need to be able to make successful transformations within an organization becomes more imperative than ever before. In Leading Change, Kotter identifies an eight-step guide for making successful organization changes. These eight steps stem from avoiding common mistakes made during organizational change efforts seen in the past , such as: too much complacency; failing to create a powerful guiding coalition; underestimating the power of vision; under-communicating the vision; permitting obstacles to block a new vision; failing to create short term wins; declaring a victory too soon; and neglecting to anchor changes firmly into the organizational culture.

To avoid these mistakes, leaders of an organization requiring changes should consider the following steps:

1. Establishing a sense of urgency

2. Creating a guiding coalition

3. Developing a vision and strategy

4. Communicating the change vision

5. Empowering broad-based action

6. Generating short-term wins

7. Consolidating gains and producing more change

8. Anchoring new approaches into the culture

In establishing a sense of urgency , it is hoped that a leader of change will be able to direct stakeholders' drive towards a common purpose and reduce complacency. Common causes of complacency include : the absence of a crisis, low overall performance standards, wrong performance measurement indexes, too much happy talk from management, and lack of sufficient performance feedback from external sources. It is suggested that a leader creates a sense of purpose allowing weaknesses to be exposed, setting performance targets that are too high, analyze current opportunities and highlight the organizations inability to pursue them, and cut-down on the "happy talk" and listen to disgruntled customers.

Very often, committees of employees devoted to making organizational change are ineffectual because they do not have the any influential, senior managers who can make changes happen and reinforce the urgency of the committee's purpose to all levels. Kotter suggests careful selection of committee members to include senior management and influential people, with care taken to avoid those employees he labels "egos" and "snakes" (i.e. those employees whose egos may take precedence over the committees agenda and those people who may undermine the trust necessary to build strong committee relationships)

By developing a vision, a leader creates "a picture of the future with some implicit or explicit commentary on why people should strive to create that future." (p. 68) It not only clarifies direction but helps in motivating those people who will be affected and/or implementing change. Kotter gives examples of good and bad visions and suggests that a perfect vision should be clear and simple enough to explain within five minutes. A vision should also inspire people to force people out of their comfort zones, it should be challenging but attainable, and usually takes advantage of fundamental trends such as globalization or technological changes.

In communicating the change vision, Kotter argues that in this day of information overload, talk of vision and strategy takes up only a small fraction of employee time and the ideas are often lost. Using analogies, repetition and the use of multiple forums for conveying change vision will help employees to understand and remember the ideas. Clear concise language is a must.

To empower employees for broad-based action enables much more flexibility within an organization to adapt to a changing environment. Barrier to empowerment however exist in i) the organizational structure where resources are so fragmented that timely delivery of objectives is nearly impossible , ii) the skills of employees, iii) systems of the organization such as HR systems which advocate antiquated measures of performance which contradict new changes, iv) supervisors who are reluctant to change from the traditional command-and-control style of management.

Despite the long-term nature of many organizational changes, Kotter suggests that the generation of short-term wins is of utmost importance and not necessarily at the expense of long-term benefits. He cites examples of CEOs who have implemented long term change initiatives but the failure to create short-term wins and tangible benefits made stakeholders impatient resulting in disenchantment. He reinforces the clear difference between management and leadership and their importance in the pursuit of short-term and long term goals (leadership being more long-term vision and strategy-oriented, management being more concerned with the pursuit goals in the immediate future). The achievement of short-term goals not only reinforces that scarifies made for long-term goal achievement are paying off. They also help to reward change agents and undermine cynics/anchors to change, they build momentum and can help fine-tune vision and strategies.

After a short-term win, Kotter warns that it is all too tempting to relax and even regress in some cases back to old ways. All momentum of change is lost. To be able to consolidate gains and keep producing more change, he suggests that management increase urgency levels, and learn to understand and appreciate that interdependencies with in the organization dictate that when changes are made in one area, they often require further changes to be made in other areas or departments.

Once changes have been made, it is then important to anchor them into the corporate culture. It is observed that culture is not easily manipulated so this should be done when all changes have been made. Changing "the way we do things around here" is imperative so that regression to old practices is not experienced.

To summarize, Kotter reinforces that an increasingly changing business environment is forcing decisions to be made quicker and organizations to become more flexible to external changes than ever before. Only with increased flexibility, teamwork and leaner organizations can a leader ever hope to make changes in response to these pressure. The leadership qualities of the change agents very important because they set the vision for others to follow. The importance of continual learning is also emphasized because leaders who are constantly changing themselves and going out of their comfort zones arguably are more able to leave those comfort zones in order to adapt to a changing environment.