John P. Kotter recently updated his classic, Leading Change, and I re-read it. With my focus on strategy execution lately (see blog items on ETW), I thought I’d share some points everyone should take away.
- Leaders and managers play different roles in companies and as senior executives; we should acknowledge which role we’re playing in order to be more effective.
- Leaders engage in activities that create organizations or adapt them to changing circumstances. They define what the future should look like, aligns people with the vision and inspires them to make it happen, despite obstacles. In sum, leaders create vision and the strategy to achieve it.
- Managers engage in activities which keep the complicated system of people and technology running smoothly. They are responsible for planning, budgeting, organizing, staffing, controlling and problem-solving.
- Companies need both executives. Managers without the perspective of the leaders, are likely to underemphasize the needs of customers, stockholders, etc., as they focus on the employees and the system. Leaders without respect for the execution of managers are likely to move from may move from one creation to another, without institutionalizing the behaviors and values that make achieving the vision possible.
- The process by which leaders create change is complex, consisting of 8 processes.
- Establish a sense of urgency. Examine the market and competitive realities; identify and discuss real and potential crises, and major opportunities
- Create the guiding coalition. Put together a team with enough power to lead the change.
- Develop a vision and strategy to achieve it.
- Communicate the change vision using every vehicle as often as possible, since it means systems and structures supporting the existing status quo will need to be changed.
- Empower broad-based action by removing obstacles and encouraging risk taking and nontraditional ideas, activities and actions.
- Generate short-term wins by both identifying and celebrating improvements and wins so they are noticed and visibly recognize and reward the people who made the wins possible.
- Consolidate gains to produce more change. Recognize that momentum must be achieved and capitalized on. Hire, promote and develop people who can implement the change; reinvigorating the process with new projects, themes and change agents.
- Anchor new approaches in the culture. Articulate the connections between new behaviors and values and organizational success; ensure leadership development and succession to sustain the new culture.
- Finally, Kotter makes the point that the sequence of these steps is important. Peter Drucker noted that “culture eats strategy for lunch”. While that might lead you to conclude that step 8, changing the culture should come much earlier in order to institutionalize it, you’d be wrong. Indeed, he originally believed that the lack of a supportive culture is the biggest impediment to crating change. But after studying change, he realized that transformations only take place when the prior steps first take place so people can connect the new actions to the performance improvements, and then can reward the behaviors and values that will sustain the transformation.