Stage 1: Create Urgency
Everyone in an organization, from executives to employees, is willing to change if it’s
important. Politicians know this well and constantly invoke crises to win over constituents.
Urgency wins support and cooperation. If the people in the organization, in particular the
leaders, feel complacent, they have no impetus to change. If everything is OK, they will
maintain the status quo. However, in a crisis situation, leaders are motivated to get involved
and to recruit followers, which adds momentum to any change initiative.
The economic crash provided one strong reason for organizational change. Many companies
have had to downsize in the face of decreased revenue, and although layoffs are never
popular, the urgency of many situations requires organizational changes, especially if change
means potentially saving the organization or its viability in the marketplace.
Stage 2: Form a Guiding Coalition
A strong team with a shared objective can implement change far better than a single
individual, and this force is needed for transformation within an organization.
With a diverse team, members can find ways to share and communicate the new vision in
ways that their specific followers can understand—the CFO can explain the reasons for
change in a way that wins buy-in from the finance department, and the head of research and
development can show how changes will benefit that department.
In addition to communication, a guiding team can oversee the creation of new processes
within the organization far better than a single executive can. A team can also draw on more
resources than an individual, even a powerful CEO, and demonstrate quick results, which in
turn can secure support from more leaders and employees.
When John Chambers became CEO of Cisco Systems, he put together an executive team that
could help him make and implement decisions. Thanks to this team, Cisco has acquired an
average of 10 companies per year under Chambers (Useem, 2009). Cisco not only bought a
rival telepresence vendor for $3.3 billion, Scientific-Atlanta for $6.9 billion, and BNI Video
for $99 million, but they have also spent $5 billion on buying NDS group in order to improve
their knowledge of software and professional services, as well as expand their presence in
video communications, according to Chambers (“Cisco to Acquire,” 2012). Team members
identify potential acquisitions and lead the process, allowing constant organizational change
that would not be possible with a single leader attempting to manage everything.
Stage 3: Create a Vision and a Strategy
A clearly articulated vision simplifies organizational change for employees. Instead of listing
dozens of minute decisions, a vision sets a general direction and motivates employees
toward that positive outcome, and the strategy defines how that goal will be accomplished.
A simple vision can direct thousands of individuals, and even if initial steps in the change are
painful, such as losing colleagues through downsizing or breaking up an established team
during reorganization, it provides a picture of a hopeful outcome.
A change vision is a guide for what an organization will look like after changes have been
made, and for what opportunities there are for the organization after the changes have been
implemented. It is a good tool for motivating employees to support the changes (Kotter,
2011). An effective change vision is: easy to understand, easy to communicate, short and tothe-point, is emotionally appealing, and applicable to a wide range of people (Kotter, 2011).
If a change vision is created effectively, it should help others to “buy in” to the change.
A vision statement is different from a mission statement. A mission statement is based on
the present and aims to explain the purpose of the organization, while a vision statement is
focused on the future and aims to inspire and lead the organization in the right direction
(Arline, 2014).
In addition to a vision statement, an organization needs to have a strategy. O’Connor and
O’Connor (2015) collected statistics from Harvard Business School Press, Fortune magazine,
and Ernest & Young, finding that 90% of strategies fail because of poor execution, 70% of
CEO failures are due to this poor execution, and 66% of strategies are not even attempted to
be executed.
Expert on execution, Larry Bossidy, former Chairman and CEO of Honeywell International,
wrote “People think of execution as the tactical side of business, something leaders delegate
while they focus on the perceived ‘bigger’ issues. This idea is completely wrong. Execution is
not just tactics—it is a discipline and a system. It has to be built into a company’s strategy,
its goals, and its culture. And the leader of the organization must be deeply engaged in it”
(Altfeld, n.d.). Toward that end, Bossidy (2002) stated that the “‘Leader’s 7 Essential
Behaviors’ form the first building block for getting things done: 1—Know your people and
your business; 2—Insist on realism; 3—Set clear goals and priorities; 4—Follow through;
5—Reward the doers; 6—Expand people’s capabilities; and 7—Know yourself” (p. 57).
Bossidy’s other building blocks for execution were “Creating a framework for cultural
change; Having the right people in the right place; The people process: making the link with
strategy and operations; The operations process: making the link with strategy and people”
(Bossidy, 2002, p. 57).
O’Connor and O’Connor (2015) took a look at why so many business strategies fail, and came
up with 10 reasons.
1. The strategy is formulated without a team, or the team members are not the right people
for the job.
2. The strategy does not motivate employees.
3. There is a separation in responsibility regarding creating the strategy and implementing
the strategy.
4. The company is internally focused, not taking into account outside factors.
5. Lack of structure and accountability.
6. Too many strategies are attempted to be implemented so the process becomes unfocused.
7. Strategy results are not measured to check on progress and success.
8. The execution team does not have meetings to discuss the progress of the strategy.
9. The entire company is not updated on the progress of the strategy, which would increase
understanding and transparency.
10. The company does not take an objective perspective, or bring in an outsider to manage the
creation and execution of the strategy.
In order to ensure that a strategy is successful, these 10 common reasons for strategy failure
must be considered.
Leong (2014) observed that there are three reasons companies may face problems with
forming a vision for the future state, that is, too big, too numbers-driven to implement, and
too complicated to achieve. Leong (2014) writes that “Vision statements may be lofty and
inspirational, but they don’t take the place of the tactical actions workers must take to move
toward the future.” Vision statements that are too far-reaching can create a “paralyzing
environment” in which leaders continue to pursue ill-defined plans. Vision statements that
are too numbers-driven may be understood by employees but not agreed upon. Vision
statements that are also too complicated also cause confusion. To avoid these errors,
responsible and talented leaders and managers should be clear, engage their teams and work
with them to see how work connects to and fits with the vision to ensure successful change
efforts and outcomes.
Stage 4: Communicate the Vision
Simply having a vision is not enough. In order to keep followers motivated, leaders need to
constantly communicate that vision, reinforcing the shared, positive outcome. Consistency
of message is important in transformative change, as it keeps leaders and employees focused
on the desirable end to a disruptive process; so instead of concentrating on potentially
upsetting daily changes, leaders from the CEO down to managers should promote the same
message of a positive outcome.
ASSOCIATED PRESS/Wong Maye-E
Piyush Gupta, CEO of DBS, Singapore’s largest bank, made one of his priorities to
clarify the bank directed and future vision.
Piyush Gupta, CEO of DBS, Singapore’s largest bank, made one of his priorities to clarify the
bank directed and future vision. He held off-site meetings for three days to develop with his
team a clear strategy, the outcome being a “nine-point strategic road map that the bank has
executed during the past four years” (Leong, 2014). He is guiding DBS to be a leading Asian
bank by ensuring that its leadership works closely together building franchises in wealth
management, SME banking, transaction banking, and treasury and markets.
Leaders who can create clear visions and strategies with their teams and companies are
more likely to succeed in planned changes than those who do not. After Steve Jobs left Apple
and before his death, Tim Cook took his place as CEO in August of 2011. Employees were
faced with uncertainty. Would Apple be the same? What changes would be made? How
would this affect the products that were created and the day-to-day work of the employees?
In order to combat this uncertainty, Cook’s first email as CEO stated “Apple is not going to
change” (Kane, 2014). What he actually meant is that the fundamentals of Apple would not
change. In the days to come, he would demonstrate through his actions how the culture of
Apple would become more relaxed and focused on teamwork.
Cook started a charity program as one change, which was well received by employees. He
also started communicating with employees more frequently through e-mails, meetings, and
even during lunch. Cook decided that he would introduce himself to different employees in
order to create more intimate relationships.
What also contributed to strengthening Cook’s new role was his early e-mails reassuring
employees that they would still have their jobs. He also communicated the change in culture
through his actions—frequent e-mails and getting to know individual employees. His clear
communication throughout the early change process was a critical aspect of also managing
that change.
Goman (2013) believes that Pennington’s book, Make Change Work: Staying Nimble,
Relevant, and Engaged in a World of Constant Change (2013), correctly outlines five common
questions that employees have about change, and that these questions should be addressed.
1.
2.
3.
4.
5.
What is changing?
How will this change the day-to-day operations for individual employees?
Will this change actually bring improvement?
How is the success of the change going to be measured?
How much support is behind the change, and who is supporting it?
Goman (2013) also stresses the importance of nonverbal communication, such as body
language. Body language has the power to reinforce or derail verbal communication. Leaders
and executives need to align their body language with their verbal communication. For
example, leaders speaking about being open to ideas and comments while they are on a stage
and behind a podium find that their message is not effective because their verbal and
nonverbal communication is not in alignment. However, a leader speaking to a group while
they are on the same level, without anything between the speaker and audience, is more
effective at communicating the message.
Stage 5: Empower Action
The first half of Kotter’s eight-stage plan involves motivating employees by keeping them
informed and focused on a positive outcome. Empowering employees to act also removes
resistance to change by including followers in the process. Instead of this change being
imposed from above, followers can engage in and affect the outcome. This empowerment
can occur through knowledge, resources, and discretion to support and further change.
When FedEx implemented teams, it trained and empowered its employees, who then
collaborated to improve internal processes. Although the change was disruptive, it resulted
in buy-in.
Stage 6: Create Quick Wins
Organizational change takes time, so it is important to demonstrate quick results to keep
employees motivated to stay on board for the long haul. The most effective short-term wins
are highly visible, so that many followers can see the results; unambiguous, so that the
change initiative can’t be questioned; and clearly a product of the transformation. Employees
want to know that their efforts and the difficulties of the process are worth completing, and
short-term wins prove that they should continue and that their current path will lead to a
positive outcome.
When the U.S. government changes hands between political parties, it employs this strategy.
The new ruling party tries to pass a few straightforward bills that its constituents support in
order to demonstrate effectiveness and progress.
Stage 7: Build on the Change
In this stage, leaders build on the support gained through short-term wins in order to
produce enough momentum to push for larger efforts. Successful change leaders do not
declare victory after small wins, but use them to bolster the energy and confidence that
followers can achieve more significant goals. As employees see the results of larger
initiatives, they have even more drive to complete the change.
In the case of attempting to turn a company around during a recession, the success of a new
product may serve as impetus for an entirely new line. The initial success of a relatively small
experiment can motivate excitement and drive for the larger project, just as the Rockefeller
Foundation uses small successes to leverage larger investment.
Stage 8: Make it Stick
Transformations are not complete until they become part of an organization’s culture.
During this stage, leaders model new values, attitudes, and behaviors so that employees
understand the permanent improvement, much like developing norms in team building.
Leaders can use this stage to celebrate and promote employees who adopt the new values or
beliefs of the organization. These individuals in turn can serve as examples for others and
reinforce the revised norms.
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