LEADING CHANGE: Why Transformation Efforts Fail

by John P. Kotter
 Agenda

1. Introduction

2. The 8 Stages of a change process

3. Case study:

4. Key takeaways of change management

 Introduction
Introduction
What is transformation?

“Adaptation to a more challenging market environment through

fundamental reforms to business processes.”
 Introduction
Why does transformation fail?
Management too eager for success.
 Flow of change is too fast or has no natural progression.
 Deviations from a previously healthy onset of change.

Lack of Structurally-Managed Pathway of Change

Solution: John P. Kotter’s

8 distinct steps of change.
 The 8 Stages of a Change Process
1. Establishing a sense of urgency

Change makers are too impatient, want to implement

change quickly

Underestimate the lack of urgency

People do not want to get out of their comfort zones or being

paralysed by risk

Making an impact to the 75%

 The 8 Stages of a Change Process
2. Form a coalition

Getting people together for a cause

Requires key “leaders” to succeed

Powerful Coalition =
The 88 Stages
The Stages of
of aaChange
ChangeProcess
Process

3. Creating a vision

A vision says something that clarifies the direction in

which an organisation needs to move. (Kotter, 1995)

Developing strategies to achieve that vision

The 8 Stages of a Change Process
4. Communicate the vision

Utilise every possible channel

to communicate the vision
The 8 Stages of a Change Process

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75%
The 8 Stages of a Change Process

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1. Create u _ _ _ _ _ y

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75%
The 8 Stages of a Change Process

2. a

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5-50
The 8 Stages of a Change Process

3. Create a

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The 8 Stages of a Change Process

4. the vision
 The 8 Stages of a Change Process

5. Empower others to act on the vision

Remove Obstacles
 Move people out of their comfort zones
 Work to sway the opinion of bosses are reluctant to
who
change; get them to adhere to new initiatives

 Align organizational structure/systems with the ebbs

and flows of change

 The 8 Stages of a Change Process

6. Planning for and creating short-term wins

Plan for short-term goals, publicise short-term achievements

 Timeframe within 1-2 years
 Raise employee morale
 Renew urgency and force detailed analysis to refine
vision
Reasons for failure

 Hoping for short-term wins instead of planning for it

The 8 Stages of a Change Process

7. Consolidate improvements and

produce still more change

Prepare for a Long-Drawn Process
 Cultural change can take 5-10 years
 Leaders should use the newfound credibility to
tackle
even bigger problems
Avoid Premature Declaration of Successful Change
 Kills change momentum
 People return to old practices as change not sunk in
 Change resistors seize opportunity to reverse
change
 The 8 Stages of a Change Process

8. Institutionalize new approaches

Demonstrate how new approaches, behaviours and

attitudes have helped improve performance
 Important to let people know the true drivers of
change
Make the next
generation of
top
management
personify
the new approach
 Lead by example!
The 8 Stages of a Change Process

5. people


The 8 Stages of a Change Process

6. Plan and publicise -

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 The 8 Stages of a Change Process

7. improvements and

5-10
The 8 Stages of a Change Process

8. new approaches

+
 Case Study: Yahoo!
1. Establishing a sense of urgency
 Quantification of Publicly Observable Metrics
2. Forming a powerful guiding coalition
 Hiring PhDs to Restore Yahoo!'s Research Unit
 Accommodating a C-level Management
3. Shakeup
Creating a vision
 Reigning in Yahoo!’s Flawed Business Processes
4. Communicating the vision
 Weekly “FYI” Meetings on Friday
5. Empowering others to act on the vision
 Discontinuation of Work-from-Home Practice Mayer@
6. Planning for and creating short-term wins
 Free Food, Free iPhones, Feedback Forum
 Case Study: Yahoo!

How positively has Yahoo! Changed?

16 July 2012
- Marissa Mayer appointed as CEO

Mayer@
May
 What’s the Link?

Myths of change

 Change is a one-time effort

 Change the organization first to carry out change
 Systems and technology are mandatory to carry out effective change
 If management sees the need for change, then it is evident to everyone
 If you know what requires change, just do it
 Carry out all changes at one time to avoid disruptions
 Change is positive and so it should be widely supported
 You only need to involve a limited number of key employees to implement
change

Plagiarized from IS4203 Lecture 2 slide 18

 What’s the Link?

Why change fails

 Change is not thought through or planned
 Outsourcing of organizational change
 Failure to address critical shadow systems
 Change is driven top-down only
 Over-reliance on one leader
 Lack of localization of change
 efforts
Issues and problems surfaced not addressed quickly

 Fuzzy measurements to determine success or failure

 Change management stops after change is implemented

Plagiarized from IS4203 Lecture 2 slide 19

 What’s the Link?

* Sorted *
 (1) Change is positive and so it should be widely supported
 (1) Change is driven top-down only Backing
 (1) You only need to involve a limited number of key employees…
 (2) Over-reliance on one leader

 (3) Change is not thought through or planned

 (3) Carry out all changes at one time to avoid disruptions
Vision
 (4) If management sees the need for change, then it is evident to everyone
 (4) Lack of localization of change efforts

 (5) Issues and problems surfaced not addressed quickly Problems

 (5) Failure to address critical shadow systems Quick hits
 (6) Change is a one-time effort Sustain
 (7, 8) Change management stops after change is implemented

Plagiarized from IS4203 Lecture 2 slide 18, 19

 What’s the Link?

Business Organization
Drivers of Structure HR

X
Change
Politics Culture
Vision Strategy

UTAUT

IS Success
Model

Technology
 Conclusion
 Structured framework to change process
 Very easy to fail at each stage

Meet change resistance

 So.. How to persuade people to change?
Next Presentation by team 13

Plagiarized from IS4203 Lecture 2 slide 19

IS4203 Case Presentation

Any Questions?