The Idea in Brief
Why do so many transformation efforts produce only middling results? One overarching reason is that leaders typically fail to acknowledge that large-scale change can take years. Moreover, a successful change process goes through a series of eight distinct stages. These stages should be worked through in sequence. Skipping steps to try to accelerate the process invariably causes problems. And since the success of a given stage depends on the work done in prior stages, a critical mistake in any of the stages can have a devastating impact.
The eight stages are:
1. Establishing a sense of urgency
2. Forming a powerful guiding coalition
3. Creating a vision
4. Communicating the vision
5. Empowering others to act on the vision
6. Planning for and creating short-term wins
7. Consolidating improvements and producing still more change
8. Institutionalizing new approaches
The Idea in Practice
For each of the stages in a change process, there is a corresponding pitfall.
1. Not establishing a great enough sense of urgency. Half of all change efforts fail at the start. When is the urgency rate high enough? When 75% of management is genuinely convinced that the status quo is, in the words of the CEO of a European company, “more dangerous than launching into the unknown.”
2. Not creating a powerful enough guiding coalition. In successful transformation efforts, the chairman or president or general manager of the division, plus another five to 50 others—including many, but not all, of the most influential people in the unit— develop a shared commitment to renewal.
3. Lacking a vision. Without a coherent and sensible vision, a change effort dissolves into a list of confusing and incompatible projects. If you can’t communicate the vision in five minutes or less and get a reaction that indicates both understanding and interest, your work in this stage isn’t done.
4. Undercommunicating the vision by a factor of ten. Use every existing communication vehicle to get the vision out. Incorporate the vision into routine discussions about business problems.
5. Not removing obstacles to the new vision. Renewal requires the removal of obstacles— systemic or human—to the vision. One company’s transformation ground to a halt because the executive in charge of the largest division didn’t change his own behavior, didn’t reward the unconventional ideas called for in the vision, and left the human resource systems intact even though they were incompatible with the new ideals.
6. Not systematically planning for and creating short-term wins. Clearly recognizable victories within the first year or two of a change effort help convince doubters that the change effort is going to be worth all the trouble.
7. Declaring victory too soon. At this stage, it’s fine to celebrate a short-term win, but it’s catastrophic to declare the war over.
8. Not anchoring changes in the corporation’s culture. If they are to stick, new behaviors must be rooted in the social norms and shared values of a corporation. To accomplish this, make a conscious attempt to show people that the new behaviors and approaches have improved performance. Also, make sure that the next generation of top management embodies the new approach.
Over the past decade, I have watched more than 100 companies try to remake themselves into significantly better competitors. They have included large organizations (Ford) and small ones (Landmark Communications), companies based in the United States (General Motors) and elsewhere (British Airways), corporations that were on their knees (Eastern Airlines), and companies that were earning good money (Bristol-Myers Squibb). These efforts have gone under many banners: total quality management, reengineering, right sizing, restructuring, cultural change, and turnaround. But, in almost every case, the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment.
