Close Look at Leading Change by John Kotter - Term Paper Example

? BOOK REVIEW OF LEADING CHANGE BY JOHN P. KOTTER Submitted By John P. Kotter(who teaches leadership at Harvard Business School) author of the book “Leading Change” has provided a visionary guide to the businesses how to successfully manage change based on his observations of more than thirty years. According to him all companies undergoing major change independent of their size and indifferent of the different banners companies use for change such as reengineering, right sizing, restructuring, cultural change and turn around etc. the basic goal remains the same: to make fundamental changes in how business is conducted so that companies are better equipped to deal with the new and challenging market environment. Unfortunately most of the organizations fail in this remake effort. Some fail miserably but most of the organization lie somewhere in between. According to Peter Senge in his 1999 book “Dance of Change” “This failure to sustain significant change recurs again and again despite substantial resources committed to the change effort (many are bankrolled by the top management), talented and committed people driving the change and high stakes. The companies that fail to sustain significant change end up facing crises. Despite this high failure rate the need for change is undeniable for sustained growth. In fact the sooner is the better otherwise options gets dried up and it requires heroic efforts to successfully bring change. The powerful macroeconomic forces that necessitate change are technological, international economic and open market forces. These forces simultaneously create opportunities and challenges for the organizations. The phenomena that some companies successfully manage dramatic changes, while others fail, intrigued Kotter. It led him to study more than hundred organizations involved in the change effort. He believes that the defining factors between success and failure of these change initiatives in business are some critical differences. This extensive study resulted in the development of a framework. He devised an eight phase process necessary for successful change. The most general lesson he derived from the case of successful companies is that each company has to undergo eight phases or steps in the change process without skipping any step. It requires a great deal of time and care because any critical mistake at any phase can be very costly to the company. Kotter’s view about change is quite dissimilar to the views of the vast majority on change management. Kotter emphasizes on leadership rather than management hence the name leading change rather than change management. He negates the common perception that change is all about management. He believes that successful transformation is 70-90 percent leadership and only 10-30 percent is management. Kotter not only recognizes the complexity of organizational change but also has proposed its solution with leadership, which is neither simple nor easy, instead of a logical process to manage change as prescribed in most of the books. Kotter’s book is also different from other books on account of its reliance on personal experience based on his exposure to companies for many years instead of drawing on other sources to bolster his arguments and conclusions. Kotter has attributed this undue emphasis on management to the mushroom growth of organizations by entrepreneurs in the twentieth century. Hundreds of mangers were required for the management of these organizations. A single leader with lots of managers could fulfill the requirements of a relatively slow pace of change in business. But the ever accelerating pace of change in the fast moving world of the twenty first century, decisions need to be made quickly and cannot take the ponderous and slow route of the management style. Dynamic adaptive enterprises of today’s world demand leadership. Kotter in his book has firstly identified the reasons of change programs failures and urged the importance of leadership and secondly has developed the change process for successful organizational change. Here is the comprehensive eight phases model of leading change as summarized by Kotter that can be followed by executives at all levels. Establish a Sense of Urgency The first phase of leading change begins with very few people realizing or noticing the vulnerability of any organization. It can be reflected in competition realities, declining market share, flat earnings and other relevant indicators. Kotter through his observation noticed that very few people notice the vulnerability of the organization and they do try to communicate it to others as well but generally fail to create enough sense of urgency. This failure of creating enough urgency so as to prompt any action is deep rooted in people’s inherent inertia to come out of their comfort zone. The transformation process or change cannot be achieved without massive support and cooperation by the employees. Such support can only be garnered through motivation. Successful organizations are not only quick in examining market and competitive realities but also pioneers in identifying crises, potential crises and potential opportunities very openly with their employees. In most of the successful cases leadership group conducts this open discussion. An outside consultant is also useful in some cases it not only increases the credibility but also helps in broadening the horizon and depicting a bigger picture and hence awareness among employees. According to Kotter the criteria of creating enough urgency is that when 75% of the leadership is convinced for bringing major changes in the business. Form a Powerful Guiding Coalition Kotter observed that change usually start with one or two people. But in most of the cases observed senior executives even the managing director with all their authority cannot lead change all by themselves. They require the support of their peers and other employees. Through effective convincing their support can be garnered. Kotter observed that successful organizations not only mange in forming a team but the group has enough energy and authority to lead change. The major reason of failure at this phase is the underestimation of the need and difficulties in forming an authoritative group. Create a Vision This phase has its root in the basic difference of approach between Kotter and his contemporaries. He believes in leadership and not just management. Leadership is always associated with vision. Vision provides the clarity and direction to the organization. Vision has many diverse functions to perform. It should be able to ignite the spark of motivation, align all organizational activities, filter to evaluate organizational performance and also provide rationale for the organizational change. Successful companies not only build a clear cut vision which can be easily understood by all employees but also develop strategies for achieving the vision. The most common mistake at this phase is an inappropriate vision and lack of clarity. Communicate that Vision Kotter has emphasized that every possible channel must be utilized by the leaders to communicate this vision. Leaders must actively participate in teaching new desired behaviors and leading by example. Transformation is not possible without the support of many people involved. This support can only be earned through proper communication which needs to be done on continuous basis. It success requires a lot of effort by the leaders through their deeds and words. Employees can only contribute if they fully understand and appreciate the effort and are willing to give small sacrifices in the short run. Empower Others to Act on the Vision Employees can contribute more effectively if they are entrusted and empowered. According to Kotter this requires a series of actions. First is to remove all obstacles to change. Secondly concentrate on transforming or changing those organizational structures and systems which are a hindrance in organization’s vision. Thirdly encourage and reinforce innovative and creative behaviors and actions. There can be a variety of obstacles which includes job description, organizational structure, compensation and benefits system even a reluctant and inflexible boss or manager. Successful companies not only allocate budget for this change initiative but also provide opportunities to the leaders and key people by releasing them from their current responsibilities so that they can fully concentrate on the transformation. Plan for and Create Short Term Wins Transformation is a long and lengthy process which requires time and cannot be rushed. To keep momentum and people motivated Kotter believes short term targets need to be defined. Leaders of successful transformations not only actively plan short term targets but also celebrate their little victories. It also helps in the critical analysis of performance and taking corrective measures whenever necessary. It also helps in identifying the committed employees and rewarding them for their performance. The most common reason of failure at this stage is unsystematic or flawed planning in determining the short term targets. Consolidate Improvements and Keep the Momentum for Change Moving Kotter warns “Do not declare victory too soon”. Organization’s cultures do not change very easily. All changes require some time to sink in and become part of the organization. This is the most common mistake made by many organizations. This early declaration of victory creates even bigger problems for organizations to deal with. The behavior of successful organizations is altogether different. Kotter observed that a positive change bring with it some sort of non compliance with the rest of the environment as well. The organizations should aim to build on it and plan on new initiatives. This positive spirit should be utilized to its fullest. This positive spirit and increased credibility can be utilized to enforce changes in structures, policies and systems by empowering and promoting those employees who can bring implement the vision. Institutionalize the New Approaches This last phase or step is very important for sustained change. Change will only be successfully implemented when it becomes deep rooted in the organizational culture and seeps into the corporate body. This can only be achieved if the new behaviors are in accordance with the social values and culture otherwise it will fade away as soon as the pressure of change diminishes. Successful organizations not only develop leadership in the long run but plan its succession so that it becomes a part of the organization. Comparison and Contrasting of Kotter’s Leading Change to Textbook This model provides an integrative model of organizational control undergoing change. According to Kotter organizations can take control, lead and direct the behavior of the people through a fine combination of mechanism and personal supervision. Kotter proposes that development and improvement in leadership and management is required in both public and private sector. He outlined a good model of leadership and management which can serve as the bench mark along which leadership and management can be measured. Earlier theories of change only concentrated on management and believed that change can be administered through a logical process of management. The challenges and opportunities arising in the organizations due to rapid changes in the macroeconomic environments demands something more than mere effective and efficient management. Good leadership is the hour of need for efficient and effective organizations. Kotter’s model is although very successful in driving and leading change but there is still some room for improvement. Kotter himself identified some unanswered questions in the book. “Many interesting questions were left unanswered, especially about how people more specifically achieved what was described in the book” Second concern is about eight factors identified. Are all of them always present in all change efforts? Do they always occur in the same sequence? In assessing Kotter’s work some believe that oversimplify things and ignores the complexities and interdependencies of planned change. My Own Opinion In my own opinion Kotter thinking of diverting attention from management to leadership is revolutionary. He not only realized the fast changing environment but also the demands in the wake of new challenges and opportunities. He proposed the importance of leadership in successfully managing the organizational change because the managerial process and emphasis of that time was too slow to handle such rapid changing environment. His proposed model of leading change is although simplistic but it is based on the observation and experience of over hundred companies and is widely applicable to both private and public organizations. It gives a broad frame work and provides the direction for leading successful change. Bibliography Kotter, J. P. (1996). Leading Change. USA: Harvard Business Press. Outline John P Kotter ( who teaches leadership at Harvard Business School) proposes a visionary model of how to successfully lead change in his book “Leading Change” The basic difference in the views of Kotter and his contemporaries at that time is the role of leadership. Kotter discards the notion of efficient management and demands the role of leadership in successfully leading change which is inevitable in this ever accelerating pace of change. He identified the reasons of failure in organizational change based on his experience and observation of over hundred companies in the span of thirty years. He developed a model of eight steps for successfully leading change. His eight steps are as follows. Establish a Sense of Urgency Creating a guiding coalition Developing a vision and strategy Communicating the change vision Empowering a broad base of people to take action Creating short term wins Consolidating gains and producing even more change Institutionalizing the new approach into culture. Kotter’s model is not an altogether different model. It has some similarities with other models such as efficient management, communication motivation and linkage of rewards with performance. The most striking dissimilarity is his emphasis on leadership in driving change. Kotter’s model is based on personal experience and is not backed by other sources but in my opinion this rather simplistic model as argued by its opponent, is quite effective in providing the direction to leaders in successfully leading change. Although there is room for improvement as is true for all models. Read More