CFO Book Review: Leading Change

CFO Book Review: Leading Change

Leading Change
by John P. Kotter
Harvard Business School Press (1996)

Leading Change was written as a follow up to an article the author wrote for the Harvard Business Review entitled “Leading Change: Why Transformation Efforts Fail”. This article received such an overwhelmingly positive response that John Kotter wanted to provide greater detail and more examples of how companies have been successful in leading change.

Many business managers read about the common mistakes listed by the author for the reason companies fail in implementing change and realized they were mistakes they have seen and experienced. Ultimately, the book has resonated with many in the business world because of the way the author has provided a framework for breaking down a transformative change process into identifiable pieces that are realistic to follow.

The author first outlines eight common errors that leaders in organizations follow into when they try to implement change within their companies. The consequences of falling into these errors are that new strategies aren’t implemented and many of the hopes and plans for creating synergy and energy in a company fall flat. The author doesn’t spend much time talking about the errors that are made. It is likely that most readers can identify quite quickly with the errors and are looking instead for solutions. So the author takes the majority of the book to outline eight stages that he has identified as critical to success in implementing transformational change in an organization.

1. The first stage is to establish a sense of urgency. In many cases a crisis of some sort is happening that creates the urgency to implement change.

2. The second stage is to create a guiding coalition. Here the idea is that in order for change to happen, there needs to be more than just the CEO or one person to suggest and lead the change process.

3. The third process is to develop a vision and strategy. If people are unable to see how this change will create a better future there will be too much resistance.

4. The fourth stage is communicating the change. This needs to be a simple and clear message that is repeated often. The area of communication is such an important piece of leading change and yet it often times is the weakest link. The message is either too complicated or not repeated often enough.

5. The fifth process is to empower broad-based action by employees to remove obstacles to change. This may include taking risks and trying nontraditional ways of doing things. Here employees need to be willing to move out of their comfort zone and not do things just because that’s the way it has always been done.
6. The sixth process is generating short term wins. People can become tired and overwhelmed with change and lose their focus in accomplish long-term goals.

7. The seventh process is consolidating gains and producing more change. This is similar to generating short-term wins, but it goes beyond this by taking these wins and building on them to implement change in an even better more productive way. The final process is to anchor the new approaches into the existing corporate culture. This is a key process to achieve lasting change. If employees don’t see that the changes implemented match up with the current values and culture the new processes will slowly disappear and eventually the organization will do things the way it always has.