Leading Change

WHY TRANSFORMATION EFFORTS FAIL

By: Group 4

Outline

The research

Eight common mistakes

Lessons to be learned

The research

More than 100 companies with different

characteristics have been studied.

The efforts have gone under many names.

The result of changes

The research

In almost every case the basic goal was

To make fundamental changes in how business is conducted in order to help cope with a new, more challenging environment

Error #1: Not establishing a great enough sense of urgency

How most successful changes begin. Existing and impending crises, competition, changing

trends and technologies or potential business opportunities. Over 50% have failed in phase 1, because of: Underestimating the need for motivating people. Overestimating their success. A lack of patience. Demotivation effect due to downside possibilities. Paralyzed senior management

Error #1: Not establishing a great enough sense of urgency

The need for a leader, CEO or division manager to

sense urgency. Bad results are both a blessing and curse in first phase. An almost universal tendency to shoot the bearer of bad news.

Manufacturing urgency

In one case a CEO deliberately engineered the

largest accounting loss in the companys history, creating huge pressures from Wall Street in the process. This led to increased sense of urgency within the organization to bring about a change.

When is urgency enough?

Urgency rate is high enough only when at least 75%

of the companys management is convinced that the current scenario is not sustainable any longer. Anything less may put the organizations future in jeopardy.

Error#2: Not creating a powerful enough guiding coalition

Error#2: Not creating a powerful enough guiding coalition

In most successful cases a coalition is always

pretty powerful.

Most of the senior management always forms the

core of the group.

More than a high sense of urgency is required like

providing a full assessment of the companys problems, off-side retreats etc. to build trust and effective communication.

Error#2: Not creating a powerful enough guiding coalition

The guiding coalition members, are expected

to work outside of formal boundaries and protocol.

This may sound awkward, but is clearly

necessary.

Error#2: Not creating a powerful enough guiding coalition

Reasons for failing:

No history of teamwork at top. Lack of conviction in the need for change process. Lack of a strong line leadership. Expecting the team to be led by a staff executive.

Error#3: lacking a vision

Error#3: lacking a vision

In very successful cases, a coalition develops a

picture of future. A vision says something that helps clarify the direction in which an organization needs to move. A list of confusing and incompatible projects. A useful rule of thumb.

Error#4: Undercommunicating the vision

Error#4: Undercommunicating the vision

Three patterns with respect to communication: Holding a single meeting or sending out a single communication. Making speeches to group of employees. Newsletters and speeches. Particularly challenging in case of short term

sacrifices. Walk the talk, nothing undermines change more than wrong behavior by important individuals.

Error#5: Not removing obstacles to the new vision

Error#5: Not removing obstacles to the new vision

Emboldened employees to try new approaches. Obstacles for employees:

job definitions. Organization Structure. Compensation and appraisal systems. Action is essential both to empower others and to maintain the credibility of change effort.

Narrow

Error#6: Not systematically planning for and creating short term wins

Error#6: Not systematically planning for and creating short term wins
Most people go on a long march unless In one or two years you should find:

beginning to go up. Statistically higher customer satisfaction rating. Decline in net income stopping. Product introduction. Upward shift in market share. In successful cases managers actively plan to achieve objectives. They dont hope for. Commitments to produce short-term wins helps keep urgency level up.

Quality

Error#7: Declaring victory too soon.

Error#7: Declaring victory too soon.

New approaches are fragile and subject to regression. Ironically, it is often a combination of change

initiators and change resistors that creates the premature victory.

What, instead of declaring premature victory?

Error#8: Not anchoring changes in the corporations culture.

In the final analysis change sticks when it becomes

the way we do things around here

Two factor in institutionalizing change:

To

show people, the effects of new approaches. Make sure that next generation of top management will personify the new approach.

Lessons to be learned
Change process goes through a series of phases.
Critical mistakes in any of the phases can have

devastating impacts if not handled with care. What is needed: A simple vision to guide people. Effective communication. Short-term goals to keep the momentum up. Constant appraisal of the work done Not giving up till change becomes the norm. A fewer errors can spell the difference between success and failure.

Reference
John P. Kotter, Leading Change, Why

Transformation Efforts Fail, HBR , April 1995.

Thank You