Kotter’s 8 Step Change Model

Step 1: Establish a Sense of Urgency

Organizations and their employees are often complacent and do not take the need for change seriously. To overcome this inertia, examine the market and competitive realities, identify and discuss crises, potential crises or major opportunities – highlight the consequences of maintaining the status quo.

It may seem like change is occurring suddenly and without warning and it’s all about you. But actually, most change originates outside the company many months or even years before internal change begins.

Research shows that most change is in response to the marketplace. For example, if a company is losing money, or is falling behind their competitors in new products and/or costs, or simply to exploit a new opportunity for growth

Amazon versus Walmart, a case study in creating urgency

Marketplace shifts take time to develop, but when they start to affect the companies bottom line, the change can be rapid and immediate. In some cases, it can be too late and the change you must deal with is that of the company going bust.

Take Walmart versus Amazon. Walmart is the stalwart of low-cost consumer staples across America for decades. It’s no secret that Amazon is a giant threat to the old world brick-and-mortar stores of Walmart.

The goal for Walmart is to supplement their old world brick-and-mortar stores with online and delivery services.

In a way, Walmart faces an existential threat. For a considerable length of time, Walmart was on a relentless walk to manufacture always enormous box stores crosswise over America, squashing nearby food merchants and retail chains with low costs that have enabled it to rule residential community retail advertisers. In any case, today, there is a Walmart inside 10 miles of 90% of the number of inhabitants in the Unified States, practically ruling out development.

Walmart reported a $16 billion arrangement to buy 77% of the Indian web-based business benefit Flipkart as a major aspect of its technique to catch a bit of a quickly developing and progressively well-informed market. The Flipkart give, one of the biggest and most dangerous in Walmart’s history takes after an example of buys in the course of recent months that incorporates a men’s apparel image and a conveyance start-up.

Walmart has started to make a worldwide cooperation of retailers and tech organizations that have Amazon as their regular opponent. It has just collaborated with Google for web-based shopping, while Microsoft will hold a stake in Flipkart close by Walmart

Sources:
[1] Digiday
[2] The New York Times – DealBook
[3] The New York Times – DealBook
[4] The Wall Street Journal

Kotter Into Action

The first step to driving change is to “establish a sense of urgency”

How about you? How do you “establish a sense of urgency”?

To establish a sense of urgency, with your stakeholders, ask and answer these questions:

• 1

  What is the default future of our department or organization?

• 2

  If we don’t take action now, where will we end up?

• 3

  If we don’t act now, what risks will we be exposed to?

• 4

  If we don’t act now, what opportunities will we miss?

“Dramatic and powerful is not going to happen unless you develop a true sense of urgency about the opportunity offered by the changes, and urgency that is intellectual and emotional, and among lots of people. Ultimately, you are going to need a lot of people to help, not just resist.”

-John Kotter, direct quote to Daniel quote
Change Management expert tips

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• Step 8

Step 2: Create a Coalition

Putting together a group that supports the need for change and with enough power and organizational clout to lead the change and make things happen, getting the group together to work as part of a team

Use collaboration methodologies and techniques to obtain a high-quality solution to a given problem in a very short timeframe.

But, how much value does collaboration drive in projects?

Designing collaborative sessions to bring key people together and work through the problems and opportunities will make a significant difference to your project.

Putting together a group that supports the need for change and with enough power and organizational clout to lead the change and make things happen, getting the group together to work as part of a team

A 2010 survey by McKinsey found that change project success ballooned to more than 75% when workers on the shop floor felt they were an integral part of the process of change.

Ask, who needs to be enrolled to be part of your “guiding coalition”?

Aetna a case study in a guiding coalition to galvanise an organisation.

Take, for example, Aetna, the American managed health care company.

In the mid-2000s Aetna was struggling. At first glance, it might have seemed earnings were solid.

Beset by lawsuits and a general and growing public disappointment with health maintenance organizations and managed care of which Aetna was a strident advocate, their brand was damaged.

In 2001 Aetna appointed Ron Williams who would become their fourth CEO in five years. He set about turning the organization around. To do this he created a guiding coalition to galvanize the organization. They set aside time to visit the troops, understand their point of view, and include them in the design of the new organization.

With different individuals from the senior group, they searched out workers at all levels—the individuals who were very much on the front line. They looked for those concerned for the organizations future, connected culturally and well regarded by peers. These people became the guiding coalition providing their input and contribution on what wasn’t working and what needed improvement. In addition their perspectives on both the plan and execution of planned process changes. [1]

The guiding coalition was the impetus to develop the momentum needed to turn Aetna around. Revenues went from a circa $300 million loss to $1.7 billion gain. In 2006 the share prices reflected this success, inc to  $48.40 from just %.8 a share.

Not every leader and member needs to do all of these activities, and have the skills to do all of these things – few will, actually. Instead, develop a composite team with different skills in each area. Diversity is best.

So remember, the second step to driving change is to create a guiding coalition.

Kotter Into Action

How about you? How do you establish your “guiding coalition”?

Check these activities against your guiding coalition	Y/N
To make the change vision clear, inspiring and shared
Communicate a compelling rationale for change that will
Motivate people to have a “can-do” attitude and make it work
Make resources available and clear blockages
Demonstrate commitment and energy to the new vision
Enrol and develop their own management team, keeping them on side
Model new behaviours and new ways of working
Increase visibility and availability to answer questions, tell a compelling story and keep stakeholders engaged
Celebrate and publicise reaching milestones and achieving success points as the new design is implemented

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Step 3: Develop a Vision

Creating a vision to help direct the change effort by presenting a picture of what the organisation will look like after the change, developing strategies to achieve that vision.

The goal of this step is to obtain stakeholder buy-in, so it is often useful to obtain their participation in articulating the vision.

It seems obvious to say, but in organisational life, it’s not always clear what we’re trying to achieve. Or it might be clear to the leader, but not to middle management or front line staff.

It isn’t just organisational leadership that get this wrong, it seems to be part of the human condition.

In the same way a person might declare their new goal is to get fit is not a clear vision, many organisational goals are equally vague. Like “improve performance”, or “collaboration, or “innovation”.

Just like in fitness we must get clear on the vision first.

Using the table of examples below, asses your goal, usually fizzy at first and bring it down to reality. Ask, if you were a fly on the wall, how would you know ‘innovation’, for example, had been implemented. What would you see? How would it show up?

Like personal goals, specificity on organisational goal matters too.

A case study for developing a vision: Ideo helps a television station reinvigorate it’s vision, mission an purpose for all

Take the case of the Connecticut Public Broadcasting Network (CPBN), who coming up to the 50 year commemoration had some tough choice and improvements to make.

But to what?

To help them with this question, they employed IDEO, the global design and innovation company to help them deign and develop the vision.

To get to the nub of this and involve as many people within and outside the organisation as possible, IDEO transformed an open space at CPBN central command into an exhibition that showed work-in-advance segments of the vision.

They included residents from the city of Connecticut as well as staff to draft a its vision, mission and purpose.

This prompted much discussion and debate, empowering the organisation to land at a solid and shared vision for its future: to be the most daring open media organization, able to investigate subjects in ways no private media business can. As well as engaging and empowering its audience to make the world a better place.

Source
[1] Harvard Business Review
[2] Nieman Lab
[3] Current
[4] Playbook Branding

Kotter Into Action: Developing the vision

The third step to driving change is to “develop a clear vision”

How about you? How could you engage leadership and develop a clear vision”?

Developing a vision is an iterative process, follow these core and recursive steps to create a winning vision

• 1

  Develop a hypothesis

• 2

  Collect and analyse data to validate assumptions

• 3

  Build vision elements

• 4

  Collect feedback and validate with stakeholders

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Step 4:  Share the vision

Share the vision – using every vehicle possible to constantly communicate the new vision and strategies, having the guiding coalition (Change Leaders) role model the behaviour expected of employees

It follows that once the vision is developed, you must share it far and wide throughout the organisation.

In this step, you must work to integrate the new vision into the way the organization currently operates. This includes incorporating the vision into the organization’s mission, vision, and values; strategy; business plans; business processes; roles; management systems; and product design and life cycle.

Through this integration, an organization truly commits to cultural transformation by incorporating the new vision into its core.

Once the vision is integrated into the top level, cascading becomes the focus. Sub-business units and middle management develop their own team mission statements incorporating innovation that employees build a sense of collective ownership, commitment, and focus and, through this, a culture centred around the new value and ways of working

Case study: what not to do

Communicating and cascading a new vision isn’t the everyday.

Communicating this way  requires a great deal of empathy.

People already have a day job and ways of doing things that, to them, suit them fine.

So how do you share a vision? The recipe seems clear. Put on a road show and tell everyone about it. Everyone knows, now. Simple as that.

First, let’s explore what not to do.

This case study of how a reorganisation of Hewlett-Packard went wrong can tell us a lot about the default approaches to communication get in the way effective change.

Carly Fiorina, then CEO of HP, foresaw great changes were required for the company. Given the top-to-bottom nature of the changes, she could see that the changes must be made do with extraordinary care and cautiously and carefully communicated with senior business leaders.
Fearing the reorganisation would cause difficult to deal with political problems, especially with middle management, she kept information to herself and close team. This had the exact opposite affect: her deepest fears were realized.

In the two months leading up tot he formal announcement, effort gradually declined until in some cases it completely stopped. Workers sensing change but not actually knowing anything specific lost focus and motivation. Managers forecasting what the changes might be, begin manuvering for power. Contractors were put off as nobody knew who might oversee which divisions after the redesign.

In the end, this went on for a full quarter. 12 weeks of lost productivity, client service and innovation.

Change poorly handled can cost. A lot!

Sharing the vision Case study: a message well delivered

Contrast this to how Zappos approaches communicating to their staff. 

The Zappos vision, permeates the entire business from to bottom. As CEO Tony Hsieh says it, “Zappos is a customer service company that just happens to sell shoes.”

With customer service at the core, every worker knows and has the same goal. A bell rings whenever excellent customer service is delivered. It might be thought to be a crude motivational tactic, but for Zappos, it demonstrates how each employee can impact the company’s lofty vision. [4]

Zappos’ approach to sharing and communicating their vision is emphatic and transparent, too. With quarterly all-in meeting, customers as well as employees are invited and share absolutely everything about the company. Nothing is sacred. Whether it be about the financials or upcoming product releases. It’s all open conversation for Zappos management.

Reporters are also welcome to the meetings and permitted tot to talk with staff directly without them having received any media training whatsoever.

And it works: Zappos made Fortune Magazine’s list of Best Places to Work in 2009, 2010, 2011 and 2012.

Kotter Into Action

Change leadership is a contact sport. If you want to create momentum around change, engage your middle and frontline managers for maximum impact.

Repeat, repeat, repeat through every channel you can. Follow these three steps:

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Step 5: Empower people to clear obstacles

Management should remove barriers that impede the change – provide resources and authority to make the change happen, change systems or structures that undermine the change vision, encourage risk-taking and non-traditional ideas, activities or actions

Capgemini Consulting and the IESE business school ran a global Innovation Leadership Study.

Based on a survey of 260 executives around the world, they concluded that “large organizations create so much distance between the executives and those that are tasked to innovate that a disconnect exists between them.”

Good managers filter the top strategy into daily actions. They remove obstacles.

So why do such frontline and middle managers drive so much value?

Put simply, they remove obstacles.

And when it comes to change management, there are three main obstacles that must be overcome:

• 1. Ambiguity
• 2. Middle management refraction layer
• 3. and the blame, or the fundamental attribution error

Obstacle 1: Ambiguity Aversion

When change comes, people often don’t like it and may not feel good about it. Resistance can block change unless people learn from it.

It is important to recognize resistance and be able to manage it effectively.

The most difficult cause of resistance is ambiguity. Ambiguity is unavoidable in projects, but it is controllable.

The malaise that results from a lack of clarity is known to economists as “Ambiguity Aversion”.

This insight about ambiguity is why people treat ambiguous, inexact, incomplete, and vague information not just as insufficient, but actually discount the data altogether.

The frustrating implication for change managers is that as a result of the discounting of ambiguous information, people behave as if they have no information at all.

This is why bringing clarity to your organizational change programs is so important. It’s why a vague statement like “deal with this new project” results in no action on the project. It is instead put off in favor of the customer call, the urgent task in the here and now.

Good change leaders must be skilled at converting the ambiguous goals and plans into concrete, specific steps. Add to this clear messages to ensure the behavior change desired and you’re well on the way to successful change.

Sources of Ambiguity

OVERCOMING RESISTANCE
Your main tool for overcoming resistance is keen listening.

Allowing people to speak their mind and voice their views often helps them work through their concerns. A good deal of them will disappear just from listening well, the others, which have merit, will require taking action to have them resolved.

Reactions to proposed changes are determined by an organizational culture.
Resistance stems from ambiguity comes from a number of reasons:

• Loss of Control: Many people feel resentful when change is imposed on them. A sense of control is essential for the self-esteem of most people. Imposed change can remove this sense of control, leading to stress and an attempt to reassert control by overt or covert sabotage.
• Fear of the Unknown: When the future state is unknown, fear and subsequent resistance comes. This is a particular problem in transformational change, where the change is so extreme or complex that most people are unable to see their own personal future state. Not unreasonably this can lead to unwillingness to change.
• Unexpected Change: People react negatively almost instinctively when decisions or demands are placed upon them without any forewarning or chance for preparation. An individual who has had no time to think through their reaction will almost certainly react negatively and resist change.
• Force of Habit: Many people are habitual in their nature and resent any break to this routine. Change, by definition, is likely to disrupt routines, causing insecurity and resistance.
• Ego: If something is to be changed, that implies the old way was wrong or inferior. A surprising amount of resistance is due to this.
• Self Doubt: In some cases fear on the individual’s behalf that they won’t be able to learn skills, or conduct tasks as required in the new model can lead to resistance.
• Chaos Theory: Changes occurring in a professional environment can have an impact on a person’s personal life. Examples of this might be changes in location, work colleagues who are personal friends etc. This cause of resistance is hard to spot and often equally hard to overcome.
• History: A history of failed changes, or simple exhaustion from constant change (often known as change fatigue), can cause resistance. Why would a person go to the effort of accepting a change and beginning to implement it, if every change implemented in the past had stalled or failed?

Obstacle 2: The “Middle Management Refraction layer”

Social science researcher Dr. Danah Zohar has looked at what drives senior leadership versus the frontline staff and middle managers.

Zohar has shown that what managers and employees value the most in their work did not correlate at all to what drives senior leaders.

What the leader cares about (and typically bases at least 80 percent of his or her message to others on) does not tap into roughly 80 percent of the workforce’s primary motivators for putting extra energy into the change program.

Obstacle 3: The Fundamental Attribution Error, or, blame the workers

When embarking on change, watch out for the fundamental attribution error to avoid inadvertently causing resistance.

To explain what the fundamental attribution error is, take the case of management guru and father of the Total Quality Management (TQM) movement, Edwards Deming. He believed that almost all (96%) of errors are due to the system people find themselves in and not the people using that system.

In his book, Out of the Crisis, Deming told the story of a manager of a company that used combustible products in their production processes. Concerned there where too many fires, the manager sent a memo to his people admonishing them to be more careful and light fewer fires or else.

The fundamental attribution error is a particularly pernicious cognitive bias that prevents managers from affecting real change in their organizations.

When they are trying to understand and explain what happens in organizational or social settings, they tend to explain behavior in terms of internal disposition such as personality traits, abilities, and motives as opposed to external situational factors.

Otherwise known and blame and finger-pointing.

It can be overcome by understanding the internal factors versus the external factors at play. For example, if an employee hasn’t delivered a project on time, the internal factors represent the personal behavior that directly caused the delay, whereas external factors reflect the general context.

TO DISTINGUISH BETWEEN THE INTERNAL AND EXTERNAL ELEMENTS, ASK YOURSELF THIS QUESTION:
“If I put a gun to their head, could they do it?”

Precisely:

• Internal elements include personal effort, ability, mood, motivation, interest, control, stamina, and self- discipline.
• External elements include poor managerial support, poor technology, red tape, unreliable colleagues, bad luck, the task itself, and unreasonable expectations.

If the answer is yes, and they aren’t doing it, then it’s likely an internal issue, which can be resolved with coaching. If the answer is no, then the issue is external and requires training, environmental, or system interventions.

In the case of Deming’s fireball manager, no amount of coaching would eliminate fires – people make mistakes in dangerous environments. Mostly this was an external issue that required interventions such as different products, better safety processes, and so on.

Your job as a change leader is to think through the external issues affecting change ahead of time so you can put in the supporting structures to promote the change. Combine this with coaching to help people through the internal emotional changes and keep people accountable for their end of the bargain and you’ll drive real change.

Not everyone is a pyromaniac.

IDEO and Weight Watchers: a case study in thinking around obstacles

In 2012, Weight Watchers faced an existential threat.  A deluge of free fitness and health apps.

These web-based programs like MyFitnessPal allow a user to monitor their calorie intake and even what they eat. In that respect, it is possible to duplicate the monitoring the Weight Watchers’ program – the point system – provides for free. This can be done conveniently using an app on a smartphone or tablet.

Attendance at Weight Watchers declined 16% globally in the 2012 financial year.

To stem the tide and face into the obstacle, Weight Watchers engaged IDEO the consulting firm, to help counter the threat.

Usually working with IDEO involves thinking digital, but what they saw was different: Weight Watchers greatest strength was the in-person meetings.

To exploit this IDEA designed an intervention for the client team: a visit to a mega­church in Dallas, Texas.

Do I think the meeting business can one day produce as much profit as it did at its 2007 peak?

A mega­church shares qualities with a Weight Watchers meeting: bringing people together around with a shared goal, while also triggering similar insecurities: “Do I belong? How should I behave?”

IDEO hoped it would remind the team of New Yorkers what it feels like to arrive at a Weight Watchers meeting for the first time.

“This proved to be a winning strategy, focusing on the core business of meetings, but it wasn’t without difficulties.”

The IDEO and the Weight Watchers teams looked for every excuse possible to get out of attending the service at the mega­church. “There’s so much traffic, is it really worth it?” “We can just stream it on our phones!”

But the team made it and were surprised by how they were embraced. Even though they were late, parishioners greeted them at the door, provided programs for the service, and guided them to an available pew – with no questioning looks, which was the unspoken fear.

The Weight Watchers left with a new perspective, and without saying anything to each other, they knew they had to redesign the experience of showing up at a Weight Watchers meeting.

This proved to be a winning strategy, focusing on the core business of meetings, but it wasn’t without difficulties.

The share price drifted lower for two more years, before hitting a bottom of around $4, when the turn around efforts caught the eye of Oprah, who became a major shareholder and spokesperson. The business rocketed from there, with the share price topping out at $100 just 18 months later.

Source:
[1] Harvard Business Review
[2] IDEO
[3] The Vision Council

 Kotter Into Action

Failing to plan is planning to fail: think through the obvious obstacles before you encounter them.

The three ever-present obstacles to change are:

• 1. Ambiguity Aversion

  Reduce and eliminate ambiguity to reduce unnecessary resistance

• 2. Middle management refraction layer

  Ensure middle management are “on the same page” and champions for the change.

• 3. Watch for the fundamental attribution error

  Actively solicit so-called “negative people” they might have something to offer you about the change that just might help. Further, when seeing ‘fires’ look for environmental and contextual solutions first.

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• Step 8

Step 6: Create and secure short-term wins

Breaking up the desired change into smaller steps to create a feeling of progress, planning for visible improvements in performance (or “wins”), visibly recognising people, leaders and/or managers who made wins possible

When milestones are achieved, celebrate the fact that progress has been made. Recognizing progress will maintain motivation, stakeholder interest, and give confidence that the long term vision is achievable.

Start with the ‘low hanging fruit’

Identifying ‘quick wins’ or ‘low hanging fruit’ is cited by practitioners as a means to build momentum for sustainability within the organization. Small successes can be used to overcome areas of resistance.

Capturing quick wins is an important tactic for demonstrating that a new approach is effective in order to encourage already-enthusiastic supporters to get behind future improvement programs.

Capturing quick wins is important to developing and building momentum.

The Duoro Boys: Winemakers getting together for more than a drink

Staunchly independent winemakers start with small-scale quick wins to build momentum and eventually scale

Consider the Douro Boys, a consortium of five independent wineries in the Douro River Valley in Portugal, who developed an association for mutual benefit. They’d come to the realization that as individual producers they couldn’t compete, but together they could develop an operating scale to make a difference.

Working together they now act as more of a single firm that five separate companies and it’s brought them success: Their wines, such as “Quinta do Vallado” or “Niepoort” now routinely get over 90 points by the Wine Spectator and sales have doubled over the last ten years.

Getting five separate companies to work together in any environment is an exercise in herding cats, let alone artisan winemakers. And as Joao Ribeiro, CEO of a partner winery says, Portuguese business people tend to be staunchly independent.

To counter this already-always-independent mindset, the partners had to secure short-term wins to establish trust, credibility, and momentum.

They established this by creating and securing a short-term win to develop momentum, Poling small amounts of their dry best wine, they made a premium wine in 500 bottles only and auctioned it off at Christie’s.

They achieved 300 euros per bottle! A price reserve only for the very best Bordeaux.

The success of this small joint project instilled a win and momentum for the member companies, which gave them the inspiration them to develop on other initiatives with energy and passion.

Kotter Into Action

Breaking up the desired change into smaller steps to create a feeling of progress, planning for visible improvements in performance (or “wins”), visibly recognizing people, leaders and/or managers who made wins possible

Create and secure short-term wins. Follow these promoting actions and watch for the pitfalls

“You need to start demonstrating some successes asap to develop credibility, and momentum, to start to win over the skeptical..”

-John Kotter, direct quote to Daniel from
Change Management expert tips

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• Step 2
• Step 3
• Step 4
• Step 5
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• Step 7
• Step 8

Step 7: Consolidate and keep moving

Using increased credibility form the early “wins” to change all systems, structures, and policies that do not fit together and don’t fit the transformation vision; hiring, promoting and developing people who can implement the change vision, reinvigorating the process with new projects, themes and change agents

Allocate: Back up the commitment to sustainability with an allocation of time, money, people, systems and structures.

Follow the momentum wheel:

Early Wins 
Early wins are designed to sustain the momentum of the change by breaking up the desired change into smaller steps, providing tangible proof that the change is underway and meeting expectations.

Sponsor Commitment 
A Project Sponsor is a leader from the affected business unit’s management team,  with “skin in the game”,  who provides public support and resources for the initiative, and ensures the engagement of required stakeholders from across the division.

Motivation 
The project team also plays an important role in maintaining the momentum of the change initiative and should visibly demonstrate excitement and enthusiasm.

To give the change initiative the credibility it needs to be accepted, it is important that the project team honor appropriate deadlines and make appropriate shifts in goals and resource allocations as dictated by the implementation approach.

Early adopters of the change initiative should be encouraged and new behaviors supported by an updated reward and recognition program.

Connection 
To sustain momentum and make the transition to business as usual (BAU), it is important that a change initiative is seen as integrated with other organizational initiatives and part of the overall business strategy rather than something “on the side”.

As part of Business Readiness activities, the change manager should ensure that the desired behaviors are reinforced by appropriate changes to systems and structures

How the project is related to other ongoing initiatives should be communicated regularly and wherever possible, the project should also be an agenda item at operational and management meetings within the business.

Shared Learning 
It is important that stakeholders can see that downstream project activities are benefiting from key learnings (both successes and failures) from early in the project.

This demonstrates to stakeholders that project team members have the capacity to act as leaders of change and continually enhance the change approach, rather than “blindly” continuing with an approach that has been identified as sub-optimal.

Shared learning also refers to encouraging sharing of stories and ideas between those that are affected by the change – this can be either through the Change Champion network, or more informal means including impacted stakeholders submitting stories for the project newsletter.

Other ways to share learnings and sustain momentum include the distribution of Frequently Asked Questions (FAQs), benchmarks and best practices.

Microsoft locking in gains for ongoing momentum

Microsoft is a stunning example of a transformation done well after the ‘lost decade’ of the Balmer years.

Satya Nadella’s allocates resources and structures to create momentum beyond the initial improvements

After taking over the reins in 2014 from Steve Balmer,  Satya Nadella had a massive task ahead of him after more than a decade of underperformance form the software giant. He rebooted the organizational culture in addition to redefining the company strategy and focus.

Products and platforms would no longer exist as separate groups, but rather all Microsoft employees would begin focusing on a limited set of common goals.

Then in 2016, with the initial changes beginning to show benefit (not just a little either in the two years since he took over, Microsoft’s share price nearly doubled.) it was time to consolidate the change and move to the next phase.

Merging of the Microsoft Research Group with the Bing, Cortana, and Information Platform Group teams to create a new AI and Research Group. With about 5,000 engineers and computer scientists, its goal is to innovate in artificial intelligence across the Microsoft product

This is an excellent example of allocating the resources and structuring the business to fulfill on the future vision created.

• Step 1
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• Step 3
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• Step 7
• Step8

Step 8: Anchor the change

 Creating better performance through customer and productivity-oriented behavior, more and better leadership, and more effective management; articulating the connections between new behaviors and organizational success; developing means to ensure leadership development and succession. The idea is to have new practices to replace the old culture. This final step takes time and comes last in the change process.

The steps in this section underscore the significance of supportability or specific activities that prompt the change becoming embedded in the organization.

Organizations should continually fortify the “anchoring the change” message in varying approaches to have it become the “way we do work around here” automatically.

“You have to approach all the work with the question of sustainability in the front of your mind. Is what we are doing going to show results for a while but then start to slide back to the old way?.”

-John Kotter, direct quote to Daniel from
Change Management expert tips

VF a shining example of creating an ongoing culture to support a change

Culture is that set of beliefs that govern behavior.

VF organizational transformation used some big results:
The company’s revenues have grown from $7 billion in 2008 to more than $11billion in 2013 (and revenues are projected to top $17 billion by 2017).
At the same time, profitability has improved substantially, highlighted by a gross margin of 48 percent as of mid-2014

The company’s stock price quadrupled from $15 per share in 2005 to more than $65 per share in September 2014, while paying about 2 percent a year in dividends. As a result, the company has ranked in the top quintile of the S&P 500 in terms of TSR over the past ten years. [edit this down]

To embed and anchor this change VF took the following key actions:

Implements a value-based training programme
VF has created an ownership mindset in its management ranks. It did this by putting it’s 200 top managers from key business units through training on principles of value creation.

What gets measured gets done
Then the performance and the performance of every brand and business is assessed in terms of its valuable contribution.

Hiring and firing with an intention
In addition, VF strengthened its management bench through a dedicated talent-management program and selective high-profile hires.

Kotter Into Action

”We are what we repeatedly do. Excellence is not an act, but a habit.”
– Aristotle

Change leadership is a contact sport. If you want to create momentum around change, engage your middle and frontline managers for maximum impact.

• Promote

  Move people who model the new change, values, and skills into higher positions in the organization

  • Make the new values performance criteria in promotion decisions
  • Reward employees demonstrating a commitment through a promotion

• Repeat

  Regularly and persistently engage in the activities and behaviors deemed important to the organization. Embed these in the organization’s culture

  • Communicate key messages repeatedly,
  frequently and widely
  • Keep communication concise, but repeat it often
  • Use multiple media formats to reach a wider audience, reinforce your message, and signal its importance

• Follow up

  Ensure sustainability tasks are completed through monitoring, reviewing and enquiring on the status of key tasks

  • Periodically evaluate your results
  • Obtain employee feedback to understand their level of engagement
  • Review performance results at regular status update meetings

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