What are the biggest obstacles to affecting large-scale change in organizations? How can we get around them? In their new book The Heart of Change, John Kotter and Dan Cohen offer true stories of companies and executives struggling to steer to a new course. The authors present eight steps to creating organizational change, starting with imparting a sense of urgency among the troops. (by John P. Kotter and Dan S. Cohen)
Using real-life stories, John Kotter and Dan Cohen have identified eight steps toward making large-scale change in organizations. The first step: Create a sense of urgency among the relevant people.
In successful change efforts, the first step is making sure sufficient people act with sufficient urgency—with on-your-toes behavior that looks for opportunities and problems, that energizes colleagues, that beams a sense of "let's go." Without enough urgency, large-scale change can become an exercise in pushing a gigantic boulder up a very tall mountain.
Off to a bad start
Have you ever seen a variation on this story?
Getting the Bosses' Approval
From Ted Watson
The general idea—hardly unique to us—was to do business consistently across all of our operating units. We would have the same approach to conducting any activity regardless of whether a manager worked in Birmingham or Buffalo. We would use the same basic steps to purchase a pen, generator, or a hammer. The point was to use new technology to take advantage of economies of scale.
The executive committee for our company met one month to discuss changes that were needed in our package system. Before that session, articles had been sent to the execs about the good and the bad aspects of the existing systems. A small team of people had focused carefully on the economic analysis, looking closely at our current software programs, in particular. At the meeting, they presented their case. "The problem we have is this. Technology offers us an opportunity . . . ." Charts, graphs, and flowcharts spelled this out clearly. The executive team listened.
There were questions at the meeting. "How long will this take?" "Who else has used this software?" "How well has the software a worked for others?" But there was little controversy and not much discussion. These conversations, the offline talks before the big meeting, the CEO's backing, and the meeting itself seemed to produce agreement.
So we started implementation. Within a few months, the number of phone calls I received from people in the divisions began to grow exponentially. People would say, "How long is this going to take? In my business we can't . . . ." "The cost versus benefit for our business unit is no good. Why do we . . . ?" "The disruption is going to be unacceptable to us because of the people you put on the transformation team." I tried to explain the business case. But I could have spent entire days on the telephone listening to all this.
Basically, each division had many people who wanted to continue to run their business the way they had always run it. They would accept new software as long as they suffered little inconvenience and little change except reduced costs. They wanted their financial reporting to have their traditional look and feel. They wanted to do maintenance scheduling their way and not the way it was being suggested. They said their emergency call-out process just needed a minor tune-up, or that they had always required five signatures to approve a purchase and they had to keep it that way to run their business. It went on and on and on and on. My attention was being diverted to dealing with the avalanche of calls, concerns, and issues.
To make a long story short, we hit a wall. We had to stop, go back, and start over. It was tough work, the second time around.
Four sets of behaviors commonly stop the launch of needed change. The first is complacency, driven by false pride or arrogance. A second is immobilization, self-protection, a sort of hiding in the closet, driven by fear or panic. Another is you-can't-make-me-move defiance, driven by anger. The last is a very pessimistic attitude that leads to constant hesitation. Whatever the reason, the consequences are similar. People do not look carefully at the evidence, get on their toes, and start moving. Instead, they hold back or complain if others initiate new action, with the result that a needed change effort doesn't start or doesn't start well.
In "Bosses' Approval," the implicit assumption underlying the approach was that these behaviors, and the feelings behind them, either weren't there or wouldn't be that relevant once the management committee said yes. These are huge assumptions, and, as it turned out in "Approval," very poor assumptions. At multiple levels in that organization, there were large pockets of complacency—"We have many challenges; uniform business processes is a very low priority." There was fear—"Can I handle this project and still make plan?" There was anger—"Why are they shoving this 'uniform' nonsense down my throat?" There was pessimism—"We'll waste a fortune on this software and it will never work well." There was cynicism—"I wonder how much commission the slick guy who sold us the system made?" Those leading the change inevitably hit this sturdy wall.
Off to a good start
Here is a second case with a completely different approach, based on a completely different set of assumptions.
The Videotape of the Angry Customer
From Tim Wallace
One night I was having dinner with one of our largest customers to thank him for the business he gave us. We were talking about one of our core products and he said that he had to make alterations in the product after receiving a shipment. Since this was a built-to-order item, that was ridiculous. The alterations cost him money and wasted time. Naturally, he was not a bit happy about that.
I told him that I was very sorry and that we'd have a group of our people address the issues as soon as possible. He looked unimpressed even though I think it was obvious I was being sincere. "It's not as if I have never told your employees about this," he said, "but they don't listen to what we say." He explained that when he identified needed changes in the product or how it was made, our people would do what he asked, but then when he returned in a few weeks the problem had reemerged. "We ask again and again for things to be changed and the person we talk to nods his head but he doesn't seem to listen."
It occurred to me that probably only a few of our people had ever heard from this man directly, and even they may have never seen him as frustrated as he was over that dinner. So I asked him if I could send one of our staff around the next day with a videocamera to record what he was saying. I'm sure he was taken aback, but I told him I was serious and that I thought this could help us both. We talked some more, and with a little bit of selling he agreed.
A few of my people went to see him the next day with a videocam. They asked him to be totally candid, to hold nothing back. For the most part he did. They shot thirty minutes in one take, and with a little editing, the video came out to be fifteen minutes.
Back at the plant, we put about fifty people in a meeting room. Someone turned on the TV, and there was the unhappy customer.
Their response was fascinating. Most people seem to have been genuinely surprised. They hadn't spent much time with customers and they had probably never heard this type of strong, negative feedback. I suspect a few people wondered whether this was an odd case, but their eyes were glued to the TV. A few mouths actually dropped open. Of course, some people thought the customer was wrong. "He doesn't understand." "He needs to be educated." "The reason why . . . ." But they were in the minority.
After the video, we had a discussion of how to fix the problems and keep them fixed so we would have a satisfied customer. People started throwing out ideas. As you can imagine, some of the ideas weren't very practical. Nevertheless, it was a good discussion.
We did more videotaping. It cost virtually nothing. This wasn't meant to solve all our problems, but it helped chip away at a serious barrier to improvement. This plant came to us through a company we acquired. That company had been a leader in its industry for a long time. The employees probably thought they had all the answers. They were the experts, skilled craftsmen. But they were also anything but customer-focused. It was probably "Sure, fine, now get out of the way so I can do my job, which I understand and you don't. I'm the professional here; you're an annoyance." With this attitude, it's hard to get off the dime and better satisfy your customer's needs.
Getting off the dime is the central challenge in Step 1.
The histories leading up to this story and to "Bosses' Approval" share many common elements. Both organizations had experienced a considerable amount of success over the years. Both faced more competition and cost pressures. Both needed to change to meet the challenges of the twenty-first century. But look how radically different the stories are.
In "Approval," the focus was mostly on getting the management committee to say yes, and the method mostly one of analysis to influence thinking. In "Videotape," the focus was on a lack of urgency among the factory workers (and probably management too).