2. Transforming Organizations:
Why Firms Fail
Allowing too much complacency
Failing to create a sufficiently powerful
guiding coalition
Underestimating the power of vision
Under-communicating the vision
3. Transforming Organizations:
Why Firms Fail
Permitting obstacles to block the new
vision
Failing to create short term wins
Declaring victory too soon
Neglecting to anchor changes firmly in the
corporate culture
4. Related Consequences
New strategies aren’t implemented well
Acquisitions don’t achieve expected synergies
Reengineering takes too long and costs too much
Downsizing doesn’t get costs under control
Quality programs don’t deliver hoped-for results
5. Successful Change and The Force
that Drives it
Globalization of markets & competition
The Eight Stage change process
The importance of Sequence
Projects within projects
Management versus Leadership
6. The Eight Stage Change Process
1. Sense of Urgency 5. Empowering Action
2. Guiding Coalition 6. Generating Short-
Term Wins
3. Vision & Strategy
7. Producing More
4. Communicating the Change
Change Vision
8. Anchoring New
Culture
7. 1. Establishing a Sense of Urgency
Examining the market and competitive
realities
Identifying and discussing crises, potential
crises, or major opportunities
8. 2. Creating the Guiding Coalition
Putting together a group with enough
power to lead the change
Getting the group to work together like a
team
9. 3. Developing a Vision and
Strategy
Creating a vision to help direct the change
effort
Developing strategies for achieving that
vision
10. 4. Communicating the Change
Vision
Using every vehicle possible to constantly
communicate the new vision and
strategies
Having the guiding coalition role model
the behavior expected of employees
11. 5. Empowering Broad-Based
Action
Getting rid of obstacles
Changing systems or structures that
undermine the change vision
Encouraging risk taking and non-
traditional ideas, activities, and actions
12. 6. Generating Short-Term Wins
Planning for visible improvements in
performance, or “wins”
Creating those wins
Visibly recognizing and rewarding people
who made the wins possible
13. 7. Consolidating Gains and
Producing More Change
Using increased credibility to change all systems,
structures, and policies that don’t 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
14. 8. Anchoring New Approaches in
the Culture
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
15. Management vs. Leadership
Planning & budgeting Establishing direction
Organizing & staffing Aligning people
Controlling & Motivating &
problem-solving inspiring
16. Sources of Complacency
Absence of a major & visible crisis
Too many visible resources
Low overall performance standards
Organizational structures with narrow
functional goals
17. Sources of Complacency
Internal measurement systems focusing
on wrong performance indexes
Lack of sufficient external feedback
Human nature, with its capacity for denial
Too much happy talk from senior
management
18. Establishing a Sense of Urgency
Pushing up the urgency level
The role of crises
The role of middle and lower-level
managers
How much urgency is enough
19. Creating a Guiding Coalition
Find the Right People
Position power, expertise, & creditability
Strong leadership & management skills
Create Trust
Through carefully planned off-site events
With lots of talk and joint activities
Develop a Common Goal
Sensible to the head
Appealing to the heart
20. Why Vision is Essential
1. It clarifies the general direction for
change
2. It motivates people to take action in the
right direction
3. It helps coordinate the actions of
different people
21. Characteristics of an Effective
Vision
Imaginable – conveys a picture of what the
future will look like
Desirable – appeals to the long-term
interests of employees & stakeholders
Feasible – comprises realistic and
attainable goals
22. Characteristics of an Effective
Vision
Focused – is clear enough to provide
guidance in decision-making
Flexible – is general enough to allow
individual initiative & alternate responses
Communicable – is easy to communicate;
can be successfully explained in 5 minutes
23. Communicating the Change Vision
The magnitude of the task
Keep it simple
Use metaphors, analogies, and examples
Use many different forums
24. Communicating the Change Vision
Repeat, repeat, repeat
Walk the Talk, or Lead by Example
Explicitly address seeming inconsistencies
Listen and be listened to
25. Empowering Employees for Action
Removing structural barriers
Providing needed training
Aligning systems to the vision
Dealing with troublesome supervisors
Tapping an enormous source of power
26. The Role of Short-Term Wins
Provide evidence that sacrifices are worth
it
Reward change agents with a pat on the
back
Help fine-tune vision and strategies
27. The Role of Short-Term Wins
Undermine cynics and self-serve resistors
Keep bosses on board
Build momentum
28. A Successful Change Effort
More change; not less
More help
Leadership from senior management
Project management and leadership from below
Reduction of unnecessary interdependencies
29. Why Culture is so Powerful
Individuals are selected and indoctrinated
so well
The culture exerts itself through the
actions of many, many people
All of this happens without much
conscious intent and thus is difficult to
challenge or even discuss
30. Anchoring Change in Culture
Comes last, not first
Depends on results
Requires a lot of talk
May involve turnover
Makes decisions on succession crucial
31. The Organization of the Future
A persistent sense of urgency
Teamwork at the top
People who can create and communicate
vision
Broad-based empowerment
32. The Organization of the Future
Delegated management for excellent
short-term performance
No unnecessary interdependence
An adaptive corporate culture
Getting from here to there…
33. Mental Habits that Support Life-
Long Learning
Risk-taking
Humble self-reflection
Solicitation of opinions
Careful listening
Openness to new ideas