Chapter 1
Change management: Kotter’s eight-step model
Many executives struggle to implement change in their organisations, and the larger the firm, the bigger the challenge. There are many recipe books for how to implement a change programme, and John Kotter’s eight-step model is probably the most well-regarded.
When to use it
- To implement a change in your organisation – for example, a new formal structure, a new IT system or a different way of serving your customers.
- To diagnose why an earlier attempt at making a change has failed, and to come up with a corrective course of action.
Origins
The challenge of managing change has existed for as long as organisations have existed. However, it was only when researchers started to understand the behavioural aspects of organisations, and the notion that employees might resist a change they didn’t buy into, that our modern view of change management started to emerge. For example, Kurt Lewin, an academic at MIT in the 1940s, showed how it was important to get employees out of their existing way of looking at the world before attempting a major change.
Systematic approaches to change management started to emerge in the post-war years, often led by consulting companies such as McKinsey and The Boston Consulting Group (BCG). During the 1980s and 1990s there were several attempts made to formalise and codify the process. The eight-step model proposed by Harvard professor John Kotter is probably the most well-known. Others include Claes Janssen’s ‘four rooms of change’ model and Rosabeth Moss Kanter’s ‘change wheel’.
What it is
Change management is difficult partly because it appears easy. However, inertia is a very powerful force and we are all innately suspicious of attempts to disrupt the status quo in our organisations. Executives responsible for setting the strategy of the organisation will often see threats and opportunities much more clearly than those in more narrow roles, so a large part of their job in any change is about communicating why change is necessary. John Kotter’s eight-step model therefore is all about ‘people’ – it is about how you get employees to adopt a planned change, making the required changes in their work patterns and attitudes. Kotter’s model has eight steps, which should be undertaken in the prescribed order:
- Create urgency
- Form a powerful coalition
- Create a vision for change
- Communicate the vision
- Remove obstacles
- Create short-term wins
- Build on the change
- Anchor the changes in corporate culture.
How to use it
Kotter provides a great deal of detail about how each step of the model should be implemented. Obviously, much depends on the specific circumstances, and a leader should always be prepared to adapt the change plan depending on the reaction he or she receives. Below is a brief description of how to do each step.
Step 1: create urgency
This is about convincing employees in the organisation that there are problems or opportunities that need addressing. For example, Stephen Elop, the CEO of Nokia in 2012, tried to create urgency for change by talking about the ‘burning platform’ that Nokia was on – and how they needed to be prepared to consider dramatic changes to their business model.
Urgency can also be created by starting an honest dialogue with employees about what’s happening in the market-place. Often, customer-facing staff can be your strongest allies in this regard as they have daily direct feedback about the market. If many people start talking about the need for change, the urgency can build and feed on itself.
Step 2: form a powerful coalition
While you, as the leader, need to take charge of a major change effort, you cannot do it on your own. So it is important to get key opinion leaders from within the organisation to work with you. You can find effective opinion leaders throughout the organisation – they don’t necessarily follow the traditional company hierarchy. These people need to commit visibly to the change, and then to champion the change within their own part of the organisation.
Step 3: create a vision for change
Often people have very different views of what the future might look like. As leader, you need to create and articulate a clear vision so that people can see what it means to them – how it taps into their own interests, and how they might be able to contribute. You don’t have to do this alone – involving key staff at this stage speeds up implementation later on as they feel more ownership for the change and have a bigger stake in its success.
Step 4: communicate the vision
In large organisations it is very difficult to get your message across to everyone, as there are often many layers between you (as a leader) and those operating on the front line. Effective leaders spend a lot of time giving talks, addressing people through multiple media and using their own direct subordinates to help spread the word.
Step 5: remove obstacles
Even a well-articulated and communicated vision doesn’t get everyone on board. There will always be some people resisting, or some structures that get in the way. So you need to work actively to remove obstacles and empower the people you need to execute the vision.
Step 6: create short-term wins
People have short attention spans, so you need to provide some tangible evidence that things are moving in the right direction early on – typically within a few months. Of course, there is often some ‘game playing’ here, in that the quick wins are often underway before the change programme has started. But that rarely detracts from the value they provide in creating momentum.
Step 7: build on the change
Kotter argues that many change projects fail because victory is declared too early. Quick wins are important, but you need to keep on looking for improvements, so that the organisation doesn’t slide back into its old ways of working.
Step 8: anchor the changes in corporate culture
Finally, to make any change stick it needs to become part of the everyday way of working. This means embedding it in your corporate culture – telling stories about the change process and what made it successful, recognising key members of the original change coalition and including the change ideals and values when hiring and training new staff.
Top practical tip
Change management is all about people, and about making relatively small shifts in the way they behave. According to Kotter, your role as a leader is therefore about engaging with employees at an emotional level. They have to be able to ‘see’ the change (for example, through eye-catching situations where problems are resolved) and to ‘feel’ it (such as by gaining some sort of emotional response that motivates them to act). This helps to reinforce the desired behaviours.
Top pitfall
The Kotter model is very good for top-down change, where the top executives are motivated to change and have a well-informed view of where the organisation needs to go. There are some organisations, unfortunately, where these assumptions do not hold, in which case Kotter’s model does not work. Such organisations either need a change in leadership, or they need a bottom-up process of change.
Further reading
For information on the ‘four rooms of change’ go to www.claesjanssen.com
Kanter, R.M. (1992) The Challenge of Organizational Change: How companies experience it and leaders guide it. New York: Free Press.
Kotter, J. (1996) Leading Change. Boston, MA: Harvard Business School Press.