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Summary of "Leading Change"

Leading Change is a book by John P. Kotter.

Chapter 1 - Transforming Organizations: Why Firms Fail: Change is happening more now than ever, and for many organizations change leads to pain. Here are some common mistakes that make the pain of change worse: allowing complacency, not establishing a powerful enough guiding coalition to overcome inertia, underestimating the power of vision, not communicating the vision enough, allowing obstacles to block the vision, not creating short-term wins, declaring "victory" too soon, and not embedding the changes in the organizational culture. These result in lower results, extra costs, and wasted time and effort.

Chapter 2 - Successful Change and the Force That Drives It: Globalization is driving change even for seemingly immune organizations. But organizations can succeed in change through the efforts of excellent management and, more importantly, excellent leadership - an important distinction. Successful change follows a typical eight-step process: - Establishing a sense of urgency - Creating the guiding coalition

- Developing a vision and strategy - Communicating the change vision - Empowering broad-based action - Generating short-term wins - Consolidating gains and producing more change - Anchoring new approaches in the culture

"Successful change of any magnitude goes through all eight states, usually in the sequence shown...Although one normally operates in multiple phases at once, skipping even a single step or getting too far ahead without a solid base almost always creates problems." (page number unavailable on Kindle edition, location 403)

Management keeps things running smoothly. Leadership creates new things. Successful transformation required more leadership than management, but most organizations value management more than leadership.

Chapter 3 - Establishing a sense of urgency: People need to cooperate to make change happen, but complacency kills cooperation. Sources of complacency include: - The absence of a major and visible crisis - Too many visible resources - Low overall performance standards - Organizational structures that focus employees on narrow functional goals - Internal measurement systems that focus on the wrong performance indexes - A lack of sufficient performance feedback from external sources - A kill-the-messenger-of-bad-news, low-candor, low-confrontation culture - Human nature, with its capacity for denial, especially if people are already busy or stressed - Too much happy talk from senior management

To increase urgency you must remove complacency. Ways to do that include: - Create a crisis by allowing a financial loss, exposing managers to major weaknesses vis-à-vis competitors, or allowing errors to blow up instead of being corrected at the last minute - Eliminate obvious examples of excess - Set targets that can't be reached by conducting business as usual - Stop measuring subunit performance on narrow goals - Send more data to more employees, especially information that demonstrates weaknesses vis-àvis the competition - Insist that people talk regularly to unsatisfied customers - Use consultants and other means to force more honest discussion - Put more honest discussions in internal communications and stop management "happy talk". - Bombard people with future opportunities and their potential rewards, and on the current inability to pursue those opportunities

Chapter 4 - Creating the Guiding Coalition: Despite the myth of the individual leader who creates significant turnarounds, major change requires the powerful force of a group. Isolated CEOs and low-credibility committees can't do the trick. Key characteristics of a strong guiding coalition are: position power, expertise, credibility (good reputations), and leadership. Avoid including people with big egos or "snakes" who create mistrust and kill teamwork. Build trust and a common goal.

Chapter 5 - Developing a Vision and Strategy: Authoritarian decree and micromanagement are both inferior approaches to establishing a compelling vision. A compelling vision can move beyond the forces of status quo like expensive but ineffective diversions, short-term interests, and nonstop meetings. An effective vision is imaginable (a strong mental picture), desirable, feasible, focused, flexible, and communicable (explainable within five minutes). The process of vision creation includes a first draft (usually from a single individual), a guiding coalition who models it and works well together, using both the head and the heart, and developing it over a long period of time and being willing to shift as needed before arriving at a final product.

Chapter 6 - Communicating the Change Vision: Key elements of effective vision communication: - Keep it simple.

- Use metaphor, analogy, and examples. - Take advantage of multiple forums. Don't think it will stick from just one "big introduction". - Repetition. - Lead by example; make sure the behavior of important people is consistent with the vision. - Explain seeming inconsistencies. - Allow and encourage two-way communication.

Chapter 7 - Empowering Employees for Broad-Based Action: Sometimes, employees understand and desire the vision but feel boxed in. Structural barriers should be removed, such as those that fragment resources and responsibility, provide too much middle management, spend money unnecessarily in a cost-cutting environment, or put information into silos that slow down efficiency. People need training not necessarily in skills but in attitude - communicate that "we will be delegating more, so we are providing this course to help you with your new responsibilities". (page number unavailable on Kindle edition, location 1643) Align systems with the vision. Deal with supervisors who block empowerment.

Chapter 8 - Generating Short-Term Wins: A useful short-term win is visible, unambiguous, and is clearly related to the change effort. Publicizing such wins give evidence that sacrifices are worth it, reward change agents, help redirect strategies, undermine cynics, keep upper-level leaders on board, and built momentum. Short-term wins should be generated by strategic planning, not luck. Keep leadership and management balanced. One without the other doesn't result in meaningful change.

Chapter 9 - Consolidating Gains and Producing More Change: Resistance is always in the background, waiting for an opportunity to stall change efforts. Change in highly interdependent organizations is difficult because to change one thing, you have to change nearly everything else. Urgency is needed, and a guiding coalition, and all the other steps in the process too. Eventually it may be necessary to reduce some of the interdependencies. At this stage, successful change breeds more change, more help is brought in or developed internally, senior managers keep a shared purpose and sense of urgency, lower level leaders lead and manage specific projects, and unnecessary interdependencies are reduced.

Chapter 10 - Anchoring New Approaches in the Culture: Culture is about the common ways of acting and that persist in a group because they are taught to new members as well as the shared values that reflect concerns and goals of the group in general. If the desired new practices aren't consistent with the current group culture, it will take extra effort to ground the new approaches, such as: - Showing evidence of performance improvements because of the new practices - Eulogizing the old culture while describing why it was no longer helpful - Offering people committed to the old culture early retirement - Making sure new hires were not indoctrinated into the old culture - Making sure promoted leaders were not committed to the old culture

Anchoring change in a culture comes last, not first. It depends on results, required a lot of talk, may involve turnover, and makes succession decisions crucial.

Chapter 11 - The Organization of the Future: The rate of change will speed up, not slow down. There will be a persistent sense of urgency (which doesn't mean ever-present panic, but a state of non-complacency with an orientation towards immediate action). Teamwork will be required at top levels. Successful leaders will create and communicate vision. Employees will be empowered to manage their own work groups. Information will be shared widely as leadership is delegated. Unnecessary interdependencies will be dissolved. Corporate cultures will become more adaptive.

Chapter 12 - Leadership and Lifelong Learning: Leadership is not just nature, it's nurture. Continual, compounded growth will win the day. Mental habits of lifelong learners include risk-taking, humble self-reflection, collecting the opinions and ideas of others, careful listening, and openness to new ideas. People will need to be flexible to master volatile career paths quite unlike typical career paths of the last century. Embrace the future. "And those people at the top of enterprises today who encourage others to leap into the future, who help them overcome natural fears, and who thus expand the leadership capacity in their organizations - these people provide a profoundly important service for the entire human community." (location 2782)...