The author begins the article citing his experience with over 100 companies attempting to remake themselves, from General Motors to Bristol-Meyers Squibb. Successful change within these companies has ranged from very successful to total failure. Because of these experiences, it is recognized that change is in itself a process which contains a series of phases that must all be completed in order to produce satisfying change.

Kotter identifies eight phases or stages a company must successfully complete in order to obtain lasting change:

1. Establish a Sense of Urgency

• Examine market and competitive realities for potential crises and untapped opportunities.
• Convince at least 75% of company managers that the status quo is more dangerous than the unknown.
• Identify and discuss crises, potential crises, or major opportunities.

2. Form a Powerful Guiding Coalition

• Assemble a group with enough power to lead the change effort.
• Encourage the group to work together as a team outside of the normal hierarchy.

3. Create a Vision

• Create a vision to direct the change effort.
• Develop strategies for realizing that vision.

4. 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.

5. Empower Others to Act on the Vision

• Remove or alter systems or structures that undermine the vision.
• Encourage risk taking and nontraditional ideas, activities, and actions.

6. Plan for and Create Short-Term wins

• Define and engineer visible performance improvements.
• Recognize and reward employees contributing to those improvements.

7. Consolidate Improvements and Produce More Change

• Use increased credibility from early wins to change systems, structures, and policies undermining the vision.
• Reinvigorate the change process with new projects and change agents.

8. Institutionalize New Approaches

• Articulate connections between new behaviors and corporate success.
• Create leadership development and succession plans consistent with the new approach.

In addition to the eight stages necessary for obtaining and maintaining satisfying change, Kotter also identifies corresponding possible pitfalls for each stage that can derail the change project all-together. The following are the eight major errors identified in the article that can halt a change project, or even destroy any positive changes made thus far.

1. Not Establishing a Great Enough Sense of Urgency

• Underestimating the difficulty of driving people from their comfort zones.
• Becoming paralyzed by risks.

2. Not Creating a Powerful Enough Guiding Coalition

• 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.
• Companies that fail in phase two usually underestimate the difficulties of producing change and thus the importance of a powerful guiding coalition, groups without strong line leadership never achieve the power that is required.

3. Lacking a Vision

• Presenting a vision that’s too complicated or vague to be communicated in five minutes.
• 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.

4. Undercommunicating the Vision by a Factor of Ten

• A good transformation vision is developed, but a single form of communication is used.
• The head of the organization spends a considerable amount of time making speeches to employee groups, but most people still don’t get it.
• Much effort is put into communication, but some very visible senior executives still behave in ways antithetical to the vision.

5. Not Removing Obstacles to the New Vision

• Failing to remove powerful individuals who resist the change effort.
• Communication is never sufficient by itself; renewal also requires the removal of obstacles.

6. Not Systematically Planning for and Creating Short-Term Wins

• Without short-term wins, too many people give up or actively join the ranks of those people who have been resisting change.
• Leaving short-term successes up to chance.
• Failing to score successes early enough (12-24 months into the change effort).

7. Declaring Victory too soon

• Until changes sink deeply into a companies culture, a process that can take five to ten years, new approaches are fragile and subject to regression.
• Declaring victory too soon – with the first performance improvement.
• Allowing resistors to convince “troops” that the war has been won.

8. Not Anchoring Changes in the Corporation’s Culture

• Not creating new social norms and shared values consistent with changes.
• Promoting people into leadership positions who don’t personify the new approach.

The article closes with the disclaimer that there are indeed other mistakes to be made, but these are the big eight when dealing with transformation. This is meant to be a simple guideline for the process, not an answer to any situation that occurs.

Citation

Kotter, J. P. (1995). Leading Change: Why Transformation Efforts Fail. Harvard Business Review OnPoint(March-April), 1-10.