Kotter's eight-stage approach to strategic change

John Kotter in his HBR article "Leading Change: Why Transformation Efforts Fail" identified 8 major errors that result in sub-optimal results in corporate change efforts.

The most general lesson to be learned from the more successful cases is that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result. A second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains.

Based on these errors, Kotter proposed eight-stage process with each stage an antidote to one of the errors identified.

Error #1: Not Establishing a Great Enough Sense of Urgency

One of the most critical mistakes companies make is failing to create a sufficient sense of urgency around the need for change. This often stems from executives underestimating the difficulty of moving people out of their comfort zones. They may overestimate their success in raising urgency or lack the patience to properly build momentum. Fears about negative consequences, such as employee resistance, declining morale, or short-term business impacts, can paralyse senior management and hinder progress.

To overcome this, leaders need to:

• Openly and frankly discuss potentially unpleasant facts about the company's competitive situation and performance. This might involve highlighting declining market share, shrinking margins, or emerging threats.

• Leverage external perspectives to provide a reality check. Investor / Boardroom support, customers, and consultants can offer valuable insights and challenge internal biases.

• Highlight the risks of inaction.  It's crucial to make the status quo seem more dangerous than embarking on a transformation journey.

Error #2: Not Creating a Powerful Enough Guiding Coalition

Successful transformations require a strong guiding coalition of individuals with the power, influence, and commitment to drive change. However, many organisations fail to build a sufficiently powerful coalition, hindering their efforts. They might underestimate the difficulty of change and the importance of a robust leadership team.

Effective guiding coalitions:

• Grow over time, starting with a core group and expanding as the transformation progresses.

• Include senior managers as the core, but may also involve board members, key customers, or even union leaders.

• Operate outside the normal hierarchy.  This is crucial because, if the existing hierarchy were effective, transformation wouldn't be necessary.

Error #3: Lacking a Vision

A clear and compelling vision is essential to guide the transformation process and provide a shared sense of direction. Without a vision, efforts can dissolve into a jumble of disconnected projects, leading to confusion and wasted resources.

An effective vision:

• Is easy to communicate and understand.

• Appeals to stakeholders such as customers, employees, and stockholders.

• Goes beyond the numbers in typical five-year plans and articulates a clear direction for the organization.

Error #4: Undercommunicating the Vision by a Factor of Ten

Communication is crucial throughout the transformation process, yet many organisations significantly under-communicate their vision. They may rely on a single meeting or communication, assuming it's sufficient for widespread understanding. Even with more frequent speeches and newsletters, the lack of consistent action and visible support from senior leaders can breed cynicism and undermine the message.

Effective communication strategies include:

• Using every available channel to broadcast the vision. This includes internal newsletters, management meetings, training programs, and even informal conversations.

• Making the vision a part of everyday discussions. This helps connect individual actions and decisions to the bigger picture.

• Demonstrating commitment through actions, not just words. Leaders need to "walk the talk" and become living examples of the desired behaviours and values.

Error #5: Not Removing Obstacles to the New Vision

As the transformation progresses and involves more people, it's crucial to identify and remove obstacles that hinder progress. These obstacles can be structural, such as rigid job categories or outdated performance appraisal systems, or they can be individuals who resist change and undermine the effort. Failing to address these obstacles can stall momentum and damage credibility.

To empower others and ensure continued progress, leaders must:

• Recognise that communication alone is not enough to empower action.

• Identify and address both internal and external obstacles. This requires a willingness to acknowledge and confront difficult realities.

• Take decisive action to remove major obstacles, especially individuals who actively resist change.

Error #6: Not Systematically Planning For and Creating Short-Term Wins

Transformation is a marathon, not a sprint. To maintain momentum and keep people engaged, it's essential to plan for and create short-term wins that demonstrate tangible progress. These wins can be improvements in key performance indicators, successful product launches, or increased customer satisfaction.

To create short-term wins:

• Actively seek opportunities for clear performance improvements. Don't just passively hope for positive results.

• Set specific goals and celebrate achievements. This helps maintain a sense of accomplishment and reinforces the value of the transformation effort.

• Use the pressure of short-term goals to drive analytical thinking and refine the vision.

Error #7: Declaring Victory Too Soon

A common pitfall is to declare victory after the first significant performance improvement, mistaking early progress for complete success. This premature celebration can lead to complacency and a rollback of changes as soon as the initial pressure subsides.

To avoid declaring victory too soon, it's essential to:

• Recognise that true transformation takes time to embed in the organisation's culture.

• Use the credibility gained from short-term wins to tackle even bigger challenges.

• Understand that renewal is a continuous process, not a one-time event.

Error #8: Not Anchoring Changes in the Corporation’s Culture

Sustainable transformation requires anchoring the changes in the corporate culture. This means ensuring that new behaviours, values, and approaches become "the way we do things around here". If changes are not deeply embedded, they are vulnerable to regression once the initial impetus for change fades.

To institutionalise change:

• Demonstrate the connection between the new approaches and improved performance.

• Ensure that succession planning reflects the new values and behaviours.

• Involve boards of directors in the transformation process to ensure alignment and long-term commitment.

When to use Kotter's Change Management Model

Most effective where there is a need for a structured, comprehensive, and strategic approach to managing change. It provides clear steps and guidelines, increasing the likelihood of successful change implementation. Examples include large-scale organizational change, cultural transformation, leadership transition, technology implementation, operational process improvement and change resistance. Digital Transformation in companies can use this model.

The model is not the best choice for complex and rapidly changing environments including minor changes, urgent situations, highly autonomous teams, resistance to formal models, lack of leadership support and inflexible orgnaizational structure. It’s crucial to assess the specific needs, culture, and context of the organization before deciding on a change management approach. Different change models or customized, hybrid strategies might be more suitable.