MINGLI JIANG (ID# 12088048) Management Principles and Dynamics

April 3, 2021 Prof. Alexander C. Trajano

Applications Paper of “Leading Change: Why Transformation Efforts Fail” by John P.

Kotter

Applications

The business scenario is changing rapidly across the world, and organizations must transfer
in order to keep pace with the same, and reinvent and evolve accordingly to achieve organizational
excellence and effectiveness. The article “Leading Change: Why Transformation Efforts Fail” by
John P. Kotter explains why organizational change should be taken seriously. It explains why
business leaders should examine every aspect of the proposed change. People are naturally
resistant to fundamental changes and often intimidated by the process; the old traditional patterns
and methods are no longer effective. The key challenges companies face is due to the
advancements in technology, the social environment caused by globalization, the pace of
competition, and the demands regarding customer expectations. The article focuses on the eight
most likely mistakes in Transformation Efforts and gives eight steps to transfer the organization.

The only thing constant in the corporate world is change and competition. Change is
inevitable. Change is the mantra for survival and success. For example, many companies have
endeavored on digital transformations, only to hit roadblocks. In 2011, GE started a major effort
to assert itself in the digital software space by building a huge LOT platform, adding sensors to
products and transforming its business models for industrial products. It took the next step in 2015,
when it created a new business unit called GE Digital. The goal was to leverage data to turn GE
into a technology powerhouse. Despite pouring billions of dollars into GE Digital and its thousands
of employees, the company’s stock price continued to drop and other products suffered. GE Digital
quickly became stuck in the pattern of having to report earnings to shareholders and was focused
more on short-term goals and earnings than long-term innovative goals and returns. The CEO was
soon forced out. The problem was that the company made a lot of mistakes in the transformation
efforts, as John P. Kotter mentioned in the article, it is Not Creating a Powerful Enough Guiding
Coalition, Lacking a Vision, Not Removing Obstacles to the New Vision and Not Anchoring
Changes in the Corporation’s Culture, etc.

In my point of view, centralizing it for a company the size of GE is a huge undertaking that
means that it need to follow John P. Kotter's eight steps when making transformation efforts, the
company needs to comprehensively evaluate our own circumstances, establish a correct
organization and vision, fully communicate with employee groups, gain wide recognition and
alliance, create short-term wins, and achieve wins through the long-term efforts of the whole
organization. The organization should never rush forward and blindly pursue immediate interests,
it should integrate Social and Ecological Thought (SET) management into transformation Efforts,
and only in this way can the organization achieve everlasting and robust growth.
References

Why transformation efforts fail John P. Kotter, Harvard Business Review (March-April 1995),
pp. 59-67. (1996). Journal of Product Innovation Management, 13(2), 170.
https://doi.org/10.1016/0737-6782(96)83110-9

Quickbase. (2018, June 6). Business Transformation Fails When Problem Isn’t Defined.
https://www.quickbase.com/blog/business-transformation-fails-when-problem-isnt-
defined

Keith Kitani, CEO of GuideSpark. (2019, October 30). The $900 billion reason GE, Ford and
P&G failed at digital transformation. CNBC. https://www.cnbc.com/2019/10/30/heres-
why-ge-fords-digital-transformation-programs-failed-last-year.html

Technologies, C. (2021, January 18). The case of Digital Transformation success and failure.
Software Testing Blog by Cigniti Technologies. https://www.cigniti.com/blog/digital-
transformation-strategy-success-failure/