The change process unfolds through a series of phases that usually require considerable time. Skipping steps only creates the illusion of speed and never produces satisfactory results. Mistakes at any stage can have a devastating impact.
MISTAKE #1: Not establishing a sense of urgency that is great enough.
Almost all companies fail at this (50%). It's important because starting a transformation process requires the collaboration of many individuals.
Reasons for failure:
- Executives underestimate how difficult it is to lead people out of their comfort zones.
- overestimate how successful they have been in increasing urgency.
- They lack patience: “There’s enough foreplay, let’s get down to business.”
- They are paralyzed by the possibility that everything could turn upside down; that seniors could become defensive or morale could drop, that events could spiral out of control, that short-term results could slip away, and they are afraid of causing a crisis.
Kotter points out that some leaders are paralyzed because they are more administrators than leaders, since their mandate is to minimize risk and keep the current system operating.
For change, by definition, if a new system is required, what's always needed is leadership. This is why transformations often start well when an organization has a new leader who is a good leader and sees the need for major change.
If the renewal is for the entire corporation, the key is the CEO; if it is a Division, the General Manager.
Whether there are good or bad results at the beginning of change, the crucial thing is to facilitate a frank discussion of unpleasant events rather than maintaining the status quo to avoid conflict.
In successful cases, the CEO deliberately generated a huge loss, while another conducted a customer satisfaction survey knowing it would be horrible and published the results.
What's the indicator that this step is right? When management is genuinely convinced that the business as it is is unacceptable.
ERROR #2: Not creating a sufficiently powerful Coalition – Guide (Steering Team)
A minimum support base is required. Successful transformations involve the leader plus a team of people (5 to 50 depending on the size of the organization) working together on a shared commitment. This generally doesn't include all senior leaders at first, but it is a powerful coalition in terms of titles, information and expertise, reputation, and relationships.
In both small and medium-sized companies, the Steering Team during the first year can be 3 to 5 people.
Senior management is key, but there may also be a powerful union leader or a key client or employees who are not part of the normal hierarchy.
A strong sense of urgency within the team helps bring the Steering Team together. This means helping them develop a diagnosis of the company's problems and opportunities with a high level of trust and communication. Two- to three-day retreats are an ideal vehicle for accomplishing this task.
Reasons for failure:
- They underestimate the difficulties of producing change and the importance of a powerful Steering Team.
- They underestimate the importance of a team.
- Sometimes they put the executive staff in charge—HR, Quality, or Strategic Planning—but even if they're capable, such leadership isn't comparable to line leadership, because staff members will never achieve the power required to drive change.
ERROR #3: Lack of vision
In a highly successful transformation effort, the Steering Team developed a vision of the future that was easy to communicate and appealed to customers, shareholders, and employees.
A vision always goes beyond numbers and is based on five-year plans. It says something that clarifies the direction in which the organization needs to move.
Without a clear vision, a transformative effort can dissolve into a list of confusing and incompatible projects.
In failures, you see plans, guidelines, and programs, but no vision. In other cases, there is a vision, but it's too complicated to be useful (for example, a "script" that requires 30 minutes of reading).
If you can't communicate the vision to someone in 5 minutes or less and produce a reaction that signifies both understanding and interest, you haven't completed this phase of the transformation process.
MISTAKE #4: Undercommunicating the vision
Regarding communication, 3 very common patterns are seen:
- They develop a good vision and communicate it in a single meeting or a single communication (about 0.001% of annual intra-company communication)
- The head of the organization spends considerable time giving speeches to groups of employees, achieving 0.005% of annual internal communication.
- Letters and speeches are added, but some important senior executives still maintain attitudes that are at odds with the vision. This results in cynicism among employees.
Transformation is impossible unless a significant group of people is committed to the point of making short-term sacrifices. Employees won't make sacrifices, even if they're dissatisfied with the status quo, unless they believe change is useful and possible. Without credible communication, people's hearts and minds will never be engaged.
Executives who communicate messages effectively do so in their hourly activities, in routine business discussions, in performance evaluations, in reviewing results.
Thus, in the most successful transformation efforts, executives use all existing communication channels to spread the vision, transforming management education into courses that focus on business problems and the new vision. The guiding principle is simple: "walk the talk." They consciously try to become a living symbol of the new corporate culture.
Communication comes in words and actions, and the latter is the most powerful form. Nothing discourages change more than the behavior of important individuals that is inconsistent with their words.
MISTAKE #5: Not removing obstacles to the new vision
Successful transformations begin to involve large numbers of people as the process progresses.
Often, the employee understands the new vision and wants to help make it happen, but an elephant seems to block the way. In some cases, the elephant is in the mind, but in others, it's real: the organizational structure, compensation systems, or performance evaluations.
At the beginning of a transformation, no organization has the time or the power to clear all obstacles, but the most significant ones must be confronted and removed. If the blockage is a person, it is important that they be treated in a manner consistent with the new vision.
MISTAKE #6: Not planning systematically and not creating short-term wins
True transformations take time and sustained effort. But people don't want to embark on a long journey unless they see evidence that the journey is producing the desired results within 12 to 24 months of starting the process.
Creating short-term wins is different from waiting for them. In a successful process, leaders see ways to achieve clear improvements by setting annual goals, achieving objectives, and rewarding those involved with recognition, promotion, and financial rewards.
MISTAKE #7: Declaring victory too soon
Until change penetrates the company's culture, a process that takes 5 to 10 years, all changes are fragile and subject to regression.
In reengineering experiences, the changes introduced slowly disappeared over the next two years. In most cases, it's difficult to find any trace of reengineering today. The same occurred with quality projects, organizational development, etc.
After taking the first steps in the change process, those less convinced take advantage of the natural difficulties that arise during the beginning of the process to backtrack.
Instead of declaring victory, successful leaders celebrate short-term goals to inspire them to overcome even bigger problems, such as attacking systems and structures that are inconsistent with the new vision.
MISTAKE #8: Not anchoring changes in culture
Change persists when it becomes "the way we do things around here." Until new behaviors are rooted in social norms and values, they are subject to degradation.
It is necessary to institutionalize 2 factors:
- Make a conscious effort to show people that new approaches, behaviors, and attitudes have helped improve results. This requires communication. It's necessary to discuss why results have improved, showing how the changes bring benefits.
- Take enough time to ensure that the next generation of top management truly embodies the new approach. If promotion requirements don't change, renewal rarely lasts.
8 STEPS TO TRANSFORM YOUR ORGANIZATION
Establish a sense of urgency
Examine the market and competitive realities.
Identify and discuss potential crises or major opportunities.
Promote dissatisfaction with the status quo.
Show the potential dangers of remaining as we are today.
Form a powerful coalition to guide
Assemble a group with enough power to lead the change effort.
Encourage the group to work together as a team.
Create the critical mass agent of change.
Create a vision
Create a vision to help direct the change effort.
Develop strategies to achieve that vision.
Communicating the vision
Use every possible vehicle to communicate the new vision and strategies.
Teach new behaviors through the example of the Steering Team.
Just because it is reported or published does not mean it is communicated.
Empowering others to act on the vision
Removing obstacles to change.
Change systems or structures that seriously threaten vision.
Encourage risk-taking and non-traditional ideas, activities and actions.
Develop structures, procedures and systems that support the new vision both explicitly and implicitly.
Plan and create short-term victories
Act on concrete and visible improvements.
Create the conditions for improvements to occur.
Recognize and reward employees involved in these improvements.
Consolidate improvements and produce even more change
Use increased credibility to change systems, structures, and policies that do not fit the vision.
Reward, promote, and develop employees who can implement the vision.
Reinvigorate the process with new projects, themes, and change agents.
Promote the inclusion of “new blood.”
Institutionalize new approaches
Articulate the connections between new behaviors and corporate successes.
Develop the means to ensure leadership development and succession.
Incorporate changes into the culture, for example by reformulating human resources systems around the vision.
Adapted from John P. Kotter. Leading change: Why transformation efforts fail. Harvard Business Review. March – April 1995.
