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Leading
Change –
Johan P. Kotter
Group 6
Kotter 8 Step Change Model
Why Kotter 8 Steps methodology
 Organizations facing powerful macro economic forces over
past two decades compelling them to constantly improve
quality, reduce cost, increase productivity etc. As a result
many number of changes carried out in organizations like
restructuring, re engineering, Mergers and acquisitions etc.
 Many changes brought in disappeared quickly due to
8 common errors.
1. Allowing too much complacency
2. Failing to create powerful coalition
3. Underestimating vision
4. Under communication vision
5. Permitting obstacles to undermine the vision
6. Failing to create short term wins
7. Declaring Victory soon
8. Failing to anchor the changes firmly in the culture.
Economic & social forces driving the need for major change
in organizations
Why Kotter 8 Steps methodology
 Kotter provided 8 step solution for each error.
 Kotter 8 Stage process for creating major change
1. Establish sense of urgency
2. Create guiding coalition
3. Develop 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 approach in culture.
 By successful implementation of change action following
kotter 8 step methodology increase the chance of
successful implementation of any major change and
thereby help organization to accommodate to the
transforming environment.
Management Vs Leadership
 Management is a set of processes than can keep a
complicated system of people and technology running
smoothly. It aims in
1. Planning & Budgetting
2. Organizing & Staffing
3. Controlling & Problem solving
Management leads to degree of predictablility
 Leadership is a set of processes that creates organisations in
the first place or adapts them to significant changing
circumstances. It aims in
1. Establishing the direction (Vision of future)
2. Aligning people to the vision
3. Inspires people to make it happen in spite of obstacles
Leadership leads to produce change
Sucessful transformation is 70 to 90% Leadership and only
10 to 30% Management
Establishing a Sense of Urgency
Step 1: Establishing a Sense of Urgency
 Organization must take initiative in bringing down
complacency and push the sense of urgency.
 With high complacency it is difficult to convince key
individuals and create the group with adequate power
needed for communicating a change vision.
 Kotter suggested ways to raise urgency level
1. Create a crisis by exposing the financial loss & communicate
future threat.
2. Set higher targets
3. Stop measuring performance through narrow functional growth.
4. Stop Happy talk
5. Send more information to employs regarding financial
loss, unsatisfied customers.
6. Encourage consultants speaks honest data.
 The above points leads to “True sense of Urgency”
Step 1: Establishing a Sense of Urgency
 Care must be taken to avoid False urgency &
Complacency which spreads As If Doing Attitude (AIDS).
 False urgency is Misguided, Creates anxiety, Fear &
Danger, Flurry behavior, Drains energy unproductively &
Prevents people from exploiting opportunities.
 Complacency is contented with Status Quo, Insufficient
attention to new opportunities and new hazards,
Sluggishness or arrogance due to past success.
 Success is the breeding ground for complacency by
making workers turn inward, Making organizations think
what they doing is right and there is no need to change.
 As per John spence, Success leads to 4I’s
Ignorance, Indifference, Inflexibility & Inconsistency.
Creating the Guiding Coalition
Step 2: Creating the Guiding Coalition
 In rapid changing world No one individuals & weak
committees have all the information needed to make
major decision. They do not possess the time and
credibility to convince lots of people to implement
decisions.
 The combination of Trust & a common Goal shared by
people with right characteristics makes a powerful team.
 The right characteristics are
1. Position Power – To include key people with power who later
not blocks the process
2. Expertise – Multifunctional experts to make intelligent
decisions
3. Credibility – Team must convince other people regarding the
change actions through their credibility
4. Leadership – Team must posses leaders to drive the change
process.
Developing a Vision and Strategy
Step 3: Developing a Vision and Strategy
o Vision refers to a picture of future with some implicit and
explicit commentary on why people should strive to create
that future.
o Good vision should have Direction of the future, to Motivate
people to undergo painful steps as part of change process &
Coordinate lots of people in efficient way.
o Vision ---> Strategies ----> Plans ---> Goal.
The first two accomplished by Leadership & rest by
competent Management.
o Characteristics of effective Vision
1. Imaginable - Conveys picture of future
2. Desirable – Satisfies long term interests of Employees, Customers
& Stock holders.
3. Feasible – Comprised realistic and attainable
4. Flexible – Adaptive to changing conditions
5. Communicable - Easy to communicate in 5 minutes
Communicating the Change Vision
Step 4: Communicating the Change Vision
 Real power of Vision is unleashed when most of the people
in organization or activity have a common understanding of
its goals and direction.
 Key Elements in effective communication of vision
1. Simplicity – To eliminate the jargons & technobabble words
2. Metaphor – To use metaphor for better understanding
3. Multiple forums – Spread the message in various forums
4. Repetition – Repeated communication lead to deep sink of
ideas in peoples mind
5. Leadership by example – Behavior consistent with Vision
6. Explanation of seeming inconsistencies – Address
inconsistencies improves credibility of communication.
7. Give & Take – Establish two way communication
Empowering Employees for Broad-
Based Action
Step 5: Empowering Employees for Broad-
based Action
 The purpose of this stage is to empower a broad base of
people to take action by removing as many barriers to the
implementation of the change vision.
 The four barriers are Structure, Skills, Systems & Supervisors.
 Ways to empower people
1. Structures to be compatible with vision
2. Provide training to employees to take greater responsibility.
3. To align information and personnel systems to vision
4. Confront supervisors who undermine the change vision.
Generating Short-term Wins
Step 6: Generating Short-term Wins
 Management have to plan deliberate short term wins to take forward
the transformation actions for the longer period successfully.
 A good short term win must possess three characters
1. Short term win must be visible such that many people can see
2. Must be unambiguous
3. Related to change action.
 The advantages of short term wins
1. Provides evidence that the efforts taken are worthy
2. Motivates the change agents through rewards
3. Helps to fine tune the vision and strategies
4. Undermine cynics to block the change action
5. Give confidence to top management that transformation is on
track.
6. Built momentum by turning neutrals into supporters, reluctant
supporters to active supporters etc.
Consolidating Gains and producing
more changes
Step 7: Consolidating Gains and producing
more changes
 To achieve the Change action there would be number of
projects running within the projects. It is so complex to
manage all twenty projects by conventional organization.
Organization can be successful in managing all twenty
projects by carrying out two actions
1. Senior executive to focus on overall leadership tasks
( Establishing direction, Aligning people, Motivating and
inspiring) which Produces change
2. Senior executive delegate responsibility for Management
(Planning, Organizing, controlling) which produces degree
of predictability.
This delegation provides the lower management the information
to coordinate the activities without endless meetings
Senior executive must identify and eliminate unnecessary inter
dependencies to make change easier.
Anchoring change in culture
Step 8: Anchoring change in culture
 Culture refers to norms of behavior and shared values among
group of people. Shared values are less apparent but more
deeply ingrained in the culture are more difficult to change
than norms of behavior.
 The new practices made in the transformation effort are not
compatible with relevant cultures, they will always subject to
regression.
 The steps to replace old culture and follow new practice
1. To talk great deal about evidences of improved result obtained
from new practice
2. Explain how old culture comes into practice and served well
and why it was no longer helpful
3. Replace long serviced employees by attractive retirement
schemes and convince existing employees to embrace new
culture.
4. To recruit new ones with no traces of old values and culture.
5. Do not encourage promotions who not follow new practices
6. Identify sucession to current CEO to take over the new practice.
Organization of the future
Structure
Systems
- Externally oriented
- Empowering
- Quick to make decisions
- Open and Candid
- More risk tolerant
Culture
- Inwardly Focussed
- Centralized
- Slow to make decisions
- Political
- Risk averse
- Management training and support
given to senior people only
- Depend on many performance
information systems
- Distribute perfomance data widely
- Management training and support
given to senior people only
- Depend on few performance
Management will manage
- Minimal internal dependencies
information systems
- Distribute perfomance data to
executives only
- Many internal dependencies
- Non Bureaucratic (Fewer rules)
- Fewer levels
- Senior management will Lead & Lower
Twentieth Century Organisation Twenty first century organisation
- Bureaucratic
- Multileveled
- Senior management will manage
Leadership & Life long learning
Leadership & Life long learning
 Origin of Leadership is nothing inherent in Human DNA
prevents growth later in life.
 In 21st century remarkable leaders develop their skills
through lifelong learning since this pattern of growth is
rewarded in rapidly changing environment.
 Harvard research carried out for 20yrs by 115 students
identified two factors key for certain people who do well
in challenging economic climate are
1. Competitive drive  Level of standards, Desire to do
well, Self confidence in competitive situaions
2. Life long learning  Seek new challenges, honest
reflections to success and failures
This two factors helps a person to acquire unusually strong
Competitive capacity
Critical Evaluation / Comments
 Book written by the John P Kotter has below attributes
1. Simple language
2. Powerful ideas
3. Vivid examples
4. Thought provoking
5. Influential
Learnings
 Must read book for 21st century executives, Managers &
Entrepreneurs.
 Provides clear idea through 8 steps to manage major
change.
 Good understanding of Management Vs Leadership
 Obtained deeper insights regarding 21st century
organization requirements.
 Learnt the success of Matsushita by understanding
importance of Leadership & Life long learning.
Leading change group 6

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Leading change group 6

  • 2. Kotter 8 Step Change Model
  • 3. Why Kotter 8 Steps methodology  Organizations facing powerful macro economic forces over past two decades compelling them to constantly improve quality, reduce cost, increase productivity etc. As a result many number of changes carried out in organizations like restructuring, re engineering, Mergers and acquisitions etc.  Many changes brought in disappeared quickly due to 8 common errors. 1. Allowing too much complacency 2. Failing to create powerful coalition 3. Underestimating vision 4. Under communication vision 5. Permitting obstacles to undermine the vision 6. Failing to create short term wins 7. Declaring Victory soon 8. Failing to anchor the changes firmly in the culture.
  • 4. Economic & social forces driving the need for major change in organizations
  • 5. Why Kotter 8 Steps methodology  Kotter provided 8 step solution for each error.  Kotter 8 Stage process for creating major change 1. Establish sense of urgency 2. Create guiding coalition 3. Develop 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 approach in culture.  By successful implementation of change action following kotter 8 step methodology increase the chance of successful implementation of any major change and thereby help organization to accommodate to the transforming environment.
  • 6. Management Vs Leadership  Management is a set of processes than can keep a complicated system of people and technology running smoothly. It aims in 1. Planning & Budgetting 2. Organizing & Staffing 3. Controlling & Problem solving Management leads to degree of predictablility  Leadership is a set of processes that creates organisations in the first place or adapts them to significant changing circumstances. It aims in 1. Establishing the direction (Vision of future) 2. Aligning people to the vision 3. Inspires people to make it happen in spite of obstacles Leadership leads to produce change Sucessful transformation is 70 to 90% Leadership and only 10 to 30% Management
  • 7. Establishing a Sense of Urgency
  • 8. Step 1: Establishing a Sense of Urgency  Organization must take initiative in bringing down complacency and push the sense of urgency.  With high complacency it is difficult to convince key individuals and create the group with adequate power needed for communicating a change vision.  Kotter suggested ways to raise urgency level 1. Create a crisis by exposing the financial loss & communicate future threat. 2. Set higher targets 3. Stop measuring performance through narrow functional growth. 4. Stop Happy talk 5. Send more information to employs regarding financial loss, unsatisfied customers. 6. Encourage consultants speaks honest data.  The above points leads to “True sense of Urgency”
  • 9. Step 1: Establishing a Sense of Urgency  Care must be taken to avoid False urgency & Complacency which spreads As If Doing Attitude (AIDS).  False urgency is Misguided, Creates anxiety, Fear & Danger, Flurry behavior, Drains energy unproductively & Prevents people from exploiting opportunities.  Complacency is contented with Status Quo, Insufficient attention to new opportunities and new hazards, Sluggishness or arrogance due to past success.  Success is the breeding ground for complacency by making workers turn inward, Making organizations think what they doing is right and there is no need to change.  As per John spence, Success leads to 4I’s Ignorance, Indifference, Inflexibility & Inconsistency.
  • 10. Creating the Guiding Coalition
  • 11. Step 2: Creating the Guiding Coalition  In rapid changing world No one individuals & weak committees have all the information needed to make major decision. They do not possess the time and credibility to convince lots of people to implement decisions.  The combination of Trust & a common Goal shared by people with right characteristics makes a powerful team.  The right characteristics are 1. Position Power – To include key people with power who later not blocks the process 2. Expertise – Multifunctional experts to make intelligent decisions 3. Credibility – Team must convince other people regarding the change actions through their credibility 4. Leadership – Team must posses leaders to drive the change process.
  • 12. Developing a Vision and Strategy
  • 13. Step 3: Developing a Vision and Strategy o Vision refers to a picture of future with some implicit and explicit commentary on why people should strive to create that future. o Good vision should have Direction of the future, to Motivate people to undergo painful steps as part of change process & Coordinate lots of people in efficient way. o Vision ---> Strategies ----> Plans ---> Goal. The first two accomplished by Leadership & rest by competent Management. o Characteristics of effective Vision 1. Imaginable - Conveys picture of future 2. Desirable – Satisfies long term interests of Employees, Customers & Stock holders. 3. Feasible – Comprised realistic and attainable 4. Flexible – Adaptive to changing conditions 5. Communicable - Easy to communicate in 5 minutes
  • 15. Step 4: Communicating the Change Vision  Real power of Vision is unleashed when most of the people in organization or activity have a common understanding of its goals and direction.  Key Elements in effective communication of vision 1. Simplicity – To eliminate the jargons & technobabble words 2. Metaphor – To use metaphor for better understanding 3. Multiple forums – Spread the message in various forums 4. Repetition – Repeated communication lead to deep sink of ideas in peoples mind 5. Leadership by example – Behavior consistent with Vision 6. Explanation of seeming inconsistencies – Address inconsistencies improves credibility of communication. 7. Give & Take – Establish two way communication
  • 16. Empowering Employees for Broad- Based Action
  • 17. Step 5: Empowering Employees for Broad- based Action  The purpose of this stage is to empower a broad base of people to take action by removing as many barriers to the implementation of the change vision.  The four barriers are Structure, Skills, Systems & Supervisors.  Ways to empower people 1. Structures to be compatible with vision 2. Provide training to employees to take greater responsibility. 3. To align information and personnel systems to vision 4. Confront supervisors who undermine the change vision.
  • 19. Step 6: Generating Short-term Wins  Management have to plan deliberate short term wins to take forward the transformation actions for the longer period successfully.  A good short term win must possess three characters 1. Short term win must be visible such that many people can see 2. Must be unambiguous 3. Related to change action.  The advantages of short term wins 1. Provides evidence that the efforts taken are worthy 2. Motivates the change agents through rewards 3. Helps to fine tune the vision and strategies 4. Undermine cynics to block the change action 5. Give confidence to top management that transformation is on track. 6. Built momentum by turning neutrals into supporters, reluctant supporters to active supporters etc.
  • 20. Consolidating Gains and producing more changes
  • 21. Step 7: Consolidating Gains and producing more changes  To achieve the Change action there would be number of projects running within the projects. It is so complex to manage all twenty projects by conventional organization. Organization can be successful in managing all twenty projects by carrying out two actions 1. Senior executive to focus on overall leadership tasks ( Establishing direction, Aligning people, Motivating and inspiring) which Produces change 2. Senior executive delegate responsibility for Management (Planning, Organizing, controlling) which produces degree of predictability. This delegation provides the lower management the information to coordinate the activities without endless meetings Senior executive must identify and eliminate unnecessary inter dependencies to make change easier.
  • 23. Step 8: Anchoring change in culture  Culture refers to norms of behavior and shared values among group of people. Shared values are less apparent but more deeply ingrained in the culture are more difficult to change than norms of behavior.  The new practices made in the transformation effort are not compatible with relevant cultures, they will always subject to regression.  The steps to replace old culture and follow new practice 1. To talk great deal about evidences of improved result obtained from new practice 2. Explain how old culture comes into practice and served well and why it was no longer helpful 3. Replace long serviced employees by attractive retirement schemes and convince existing employees to embrace new culture. 4. To recruit new ones with no traces of old values and culture. 5. Do not encourage promotions who not follow new practices 6. Identify sucession to current CEO to take over the new practice.
  • 25. Structure Systems - Externally oriented - Empowering - Quick to make decisions - Open and Candid - More risk tolerant Culture - Inwardly Focussed - Centralized - Slow to make decisions - Political - Risk averse - Management training and support given to senior people only - Depend on many performance information systems - Distribute perfomance data widely - Management training and support given to senior people only - Depend on few performance Management will manage - Minimal internal dependencies information systems - Distribute perfomance data to executives only - Many internal dependencies - Non Bureaucratic (Fewer rules) - Fewer levels - Senior management will Lead & Lower Twentieth Century Organisation Twenty first century organisation - Bureaucratic - Multileveled - Senior management will manage
  • 26. Leadership & Life long learning
  • 27. Leadership & Life long learning  Origin of Leadership is nothing inherent in Human DNA prevents growth later in life.  In 21st century remarkable leaders develop their skills through lifelong learning since this pattern of growth is rewarded in rapidly changing environment.  Harvard research carried out for 20yrs by 115 students identified two factors key for certain people who do well in challenging economic climate are 1. Competitive drive  Level of standards, Desire to do well, Self confidence in competitive situaions 2. Life long learning  Seek new challenges, honest reflections to success and failures This two factors helps a person to acquire unusually strong Competitive capacity
  • 28. Critical Evaluation / Comments  Book written by the John P Kotter has below attributes 1. Simple language 2. Powerful ideas 3. Vivid examples 4. Thought provoking 5. Influential
  • 29. Learnings  Must read book for 21st century executives, Managers & Entrepreneurs.  Provides clear idea through 8 steps to manage major change.  Good understanding of Management Vs Leadership  Obtained deeper insights regarding 21st century organization requirements.  Learnt the success of Matsushita by understanding importance of Leadership & Life long learning.