Jayashantha Jayawardhana notes how CEOs can ensure long-lived transformation
People resist change. Change at a personal level is hard enough but instituting it in an organisation is even tougher. The bigger problem is that change, both at personal and organisational levels fails more often than it succeeds, regardless of what those ultra-optimistic executive coaches say.
I’m focussing on organisational rather than personal change. But since an organisation by definition consists of two or more people, it’s more or less about collective personal change too. Guiding change is arguably the ultimate test of a leader because no business can survive in the long run if it can’t reinvent itself.
John Paul Kotter is the Konosuke Matsushita Professor of Leadership – Emeritus at Harvard Business School and a leading authority on change management. In his seminal Harvard Business Review (1995) article titled ‘Leading Change – Why Transformation Efforts Fail,’ Kotter delineates eight reasons why organisational change doesn’t succeed.
URGENT ACTION Organisational change sparks off when an individual or group of individuals looks critically at their company’s competitive situation, market share, technological trends and financial health.
They focus on the potential revenue shrinkage when a major patent expires, there is a trend of declining margins of a core business over several years, a competitor gradually gains ground on them unbeknownst to most or an emerging market everyone seems to ignore comes to the fore.
To kick-start this transformation, there should be a crisis that’s troubling or an opportunity that’s promising. Then it has to be communicated dramatically throughout the organisation to spur people into action. Unless you can establish a great sense of urgency, transformation won’t even begin.
A POWER GROUP In successful transformations, a powerful coalition including the chairman, president or divisional general manager plus another five, 15 or 50 people come together to develop a shared commitment to excellent performance throughout the renewal phase.
“Because the guiding coalition includes members who are not part of senior management, it tends to operate outside the normal hierarchy by definition,” writes Kotter, adding: “This can be awkward but it is clearly necessary.”
Some senior managers might feel threatened and counter this, so there has to be a strategy to reassure them that their hierarchical positions and power will remain unaffected. Change efforts without a powerful guiding coalition won’t have the momentum to advance as the opposition may regroup and snuff it out.
LACKING VISION To encourage people to buy into change efforts, they should be clearly shown where such transformations are going to take the organisation so that they’ll understand what’s in store for them if it succeeds.
Without a clear and sensible vision, the change efforts will come to nought.
COMMUNICATION No matter how compelling your transformational vision is, it won’t be able to communicate itself to all stakeholders at the same level. A single meeting with management or a flurry of hurriedly composed emails won’t suffice.
There has to be a clear communication strategy to get your point home consistently and continuously. This will help you earn credibility and drum up support for executing your plans for transformation.
MOVE OBSTACLES You must be ready to accept that there may be senior managers even in the ‘transformation task force’ who will jealously guard the status quo. If you fail to understand this and get them out of your way, they will block your path.
SHORT-TERM WINS Real transformation takes time. But few are willing to strive over a long period. So there needs to be some short-term wins to celebrate. You will have to define certain realistic milestones and celebrate even small victories once you’ve reached them in order to signal that all is going well, and their sacrifices have not been in vain.
TAKE YOUR TIME Don’t be in a hurry to declare victory too soon. After a few years of gruelling work, you may be tempted to conclude that the transformation is complete.
Kotter writes: “Until changes sink deeply into a company’s culture, a process that can take five to 10 years, new approaches are fragile and subject to regression.”
INTERNALISATION Changes will stick only if they’ve been mainstreamed into the ethos of the corporation. Two factors are instrumental in institutionalising change in corporate culture. First, show people how the new approaches, behaviour and attitudes have helped improve performance.
And secondly, watch over it for a sufficient period of time to ensure that the next generation of top management really does personify the new approach. If you fail to pull this off, the changes won’t endure.