Leading Effective Corporate Change

STEP 1: Create a Sense of Urgency

Helping others see the need for change and the importance of acting immediately
Establishing a sense of urgency is necessary to gaining the cooperation necessary to drive a significant change
effort. Most companies ignore this step - indeed close to 50% of the companies that fail to make needed change
make their mistakes at the very beginning. Leaders may underestimate how hard it is to drive people out of their
comfort zones, or overestimate how successfully they have already done so, or simply lack the patience necessary
to develop appropriate urgency.
Leaders who understand the importance of a sense of urgency are good at taking the pulse of their company and
differentiating between complacency, false urgency and true urgency. For those that determine that true urgency
is insufficient - and it often is - there are some tried and true approaches to developing it and one way that is
almost certainly doomed to failure.
The approach most likely to fail is the one that is purely intellectual, based on a solid business case that has a
theoretically "compelling" rationale. The problem in failed change initiatives is rarely that the case for change is
poorly thought out, or not supported with sufficient facts. The fundamental problem is that the case is all head and
no heart.
Consequently, leaders who know what they are doing will "Aim for the Heart." They will connect to the deepest
values of their people and inspire them to greatness. They will make the business case come alive with human
experience, engage the senses, create messages that are simple and imaginative, and call people to aspire.
Tactics that can make this happen include:
 Bringing the Outside In
 Behaving with Urgency Every Day
 Finding Opportunity in Crisis
 Dealing with No Nos
The toughest of the 8 steps and the most often overlooked is the process of increasing the urgency in an
organization for the need for change. Urgency must be core to a successful organization and it must be sustained
over time. It is critical to set the stage for making a challenging leap into some new direction. Urgency is becoming
increasingly important because change is shifting from episodic to continuous. That means there is a constant need
for an urgent focus on what is important.
Urgency / False Urgency - True Urgency focuses on critical issues. It is driven by the deep determination to win, not
anxiety about losing.
Many people confuse it with false urgency. This misguided sense of urgency does have energized action, but it has
a frantic aspect to it with people driven by anxiety and fear. This dysfunctional orientation prevents people from
exploiting opportunities and addressing real issues.
The worst thing for an organization is to step into complacency. In a fast moving and changing world, a sleepy or
steadfast contentment with the status quo can create disaster – literally.
A big reason that a true sense of urgency is rare is that it’s not a natural state of affairs. It has to be created and
recreated. In organizations that have survived for a significant period of time, complacency is more likely the norm.
Even in organizations that are clearly experiencing serious problems, devastating problems, business-as-usual can
survive. Or it can be replaced by hundreds of anxiety filled, unproductive activities that are mistaken for a real
sense of urgency. And in organizations that handle episodic change well, with a big initiative every five years or so,
you can still find a poor capacity to deal with continuous change because urgency tends to collapse after a few
successes.
This last point is exceptionally important because we are moving from episodic to continuous change. With this
shift, urgency will move from being an important issue every few years to being a powerful asset all the time. The
urgency question is not limited to any particular class of organization or group. Insufficient urgency, with all of its
consequences, can be found in winners and losers, businesses and governments. It can undermine a plant, an
office, or a whole country. Conversely, in all of these situations, a high sense of urgency can help produce results,
and a whole way of life, that we all desire.
The good news here—and there is good news—is that a changing world offers not only many hazards but
wonderful opportunities. Such is the very nature of shifting contexts. To capitalize on the opportunities requires
any number of skills and resources. But it all begins with a high enough sense of urgency among a large enough
group of people. Get that right and you are off to a great start. Get that right and you can produce results that you
very much want, and the world very much needs.

STEP 2: Creating the Guiding Coalition

Putting together a group with enough power to lead the change.

No one person, no matter how competent, is capable of singlehandedly developing the right vision,
communicating it to vast numbers of people, eliminating all of the key obstacles, generating short term wins,
leading and managing dozens of change projects and anchoring new approaches deep in an organization’s culture.
Putting together the right coalition of people to lead a change initiative is critical to its success. That coalition must
have the right composition, a significant level of trust, and a shared objective.

The Low Credibility Committee

Too often companies that start a change initiative create a lowcredibility committee to drive the change. When this
happens, thingslimp along until the initiative falls apart. These efforts are doomedfrom the start and, as a result,
the company’s competitive positiongets a little weaker and the industry leader get a little furtherahead.

The Importance of Teams to Decision Making

In a rapidly changing world, complex organizations are forced to makedecisions more quickly and with less
certainty than they would like andwith greater sacrifice than they would prefer. It is clear that teamsof leaders and
managers, acting in concert, are the only effective wayto make productive decisions under these circumstances.

The Four Qualities of an Effective Guiding Coalition

In putting together a Guiding Coalition, the team as a whole should reflect:
 Position Power: Enough key players on board so that those left out cannot block progress.
 Expertise: All relevant points of view should be represented so that informed intelligent decisions can be
made.
 Credibility: The group should be seen and respected by those in the firm so that the group’s pronouncements
will be taken seriously by other employees.
 Leadership: The group should have enough proven leaders to be able to drive the change process.
This last point is particularly important. The Guiding Coalition should be comprised of both managers and leaders
who work together as a team. The managers keep the process under control while the leaders drive the change. A
Guiding Coalition with good managers but poor leaders is likely to produce plans but not vision. It will vastly under
communicate the need for change and it will control rather than empower people. A Guiding Coalition that has all
leaders and no managers is unlikely to create the short-term wins necessary to sustainable change initiative.
It is essential that the team develop a level of trust in one another. This is the glue that makes the team function
well. In today’s world, team building has to happen quickly. Typically, this occurs in an off-site with carefully
facilitated activities that allows for team members to make connections between both hearts and minds.
Constructing the right team and then combining a level of trust with a shared goal in which the team believes can
result in a guiding coalition that has the capacity to make needed change happen despite all of the forces of
inertia.

STEP 3: Developing a Change Vision

Clarify how the future will be different from the past
A clear vision serves three important purposes. First, it simplifies hundreds or thousands of more detailed
decisions. Second, it motivates people to take action in the right direction even if the first steps are painful. Third,
it helps to coordinate the actions of different people in a remarkably fast and efficient way. A clear and powerful
vision will do far more than an authoritarian decree or micromanagement can ever hope to accomplish.
Many visions are deceptively mundane. Often the vision is part of a larger system that includes strategies, plans
and budgets. However, the vision is the glue that holds these things together and makes sense of them both for
the mind and the heart. A good vision can demand sacrifices in order to create a better future for all of the
enterprise’s stakeholders.
Such visions must be seen as strategically feasible. To be effective, a vision must take into account the current
realities of the enterprise, but also set forth goals that are truly ambitious. Great leaders know how to make these
ambitious goals look doable. When a vision is undergirded with a strong, credible strategy, it becomes evident to
the stakeholders that the vision is not a pipe dream.
A vision must provide real guidance. It must be focused, flexible and easy to communicate. It must both inspire
action and guide that action in foreseeable ways. It should be a touchstone for making relevant decisions, but not
be so constricting as to reduce the possibility of empowering action. Finally, it must be communicable. If it cannot
be explained quickly in a way that makes intuitive sense, it becomes useless.
Thus, effective visions have six key characteristics, they are:
 Imaginable: They convey a clear picture of what the future will look like.
 Desirable: They appeal to the long-term interest of employees, customers, shareholders and others who have
a stake in the enterprise.
 Feasible: They contain realistic and attainable goals.
 Focused: They are clear enough to provide guidance in decision making.
 Flexible: They allow individual initiative and alternative responses in light of changing conditions.
 Communicable: They are easy to communicate and can be explained quickly.

STEP 4: Communicating the Vision for Buy-in

Ensuring that as many people as possible understand and accept the vision
Gaining an understanding and commitment to a new direction is never an easy task, especially in complex
organizations. Undercommunication and inconsistency are rampant. Both create stalled transformations.
Most companies undercommunciate their visions by at least a factor of 10. A single memo announcing the
transformation or even a series of speeches by the CEO and the executive team are never enough. To be effective,
the vision must be communicated in hour-by-hour activities. The vision will be referred to in emails, in meetings, in
presentations – it will be communicated anywhere and everywhere.
Executives will use every effective communication channel possible tobroadcast the vision. They turn boring and
unread company news letters into lively articles about the vision. Ritualistic and tediousquarterly meetings are
turned into exciting discussions about transformation. Generic education programs are thrown out and replaced
with courses that focus on business problems and the new vision.
In communicating the vision for the transformation, there are some things to keep in mind. The vision should be:
 Simple: No techno babble or jargon.
 Vivid: A verbal picture is worth a thousand words – use metaphor, analogy and example.
 Repeatable: Ideas should be able to spread by anyone to anyone.
 Invitational: Two-way communication is always more powerful than one-way communication.
In pursuit of simplicity, fewer words are better. Consider the following:
 Version 1: Our goal is to reduce our mean time to repair parameters so that they are perceptually lower than
all major competitors inside the United States and out. In a similar vein, we have targeted new product
development cycle times, order process times, and other customer-relevant processes for change.
 Version 2: We are going to become faster than anyone in our industry at satisfying customer needs.

Actions Speak Louder Than Words

Even more important than what is said is what is done. Leaders who transform their organizations “walk the talk.”
They seek to become a living example of the new corporate culture that the vision aspires to. Nothing undermines
a communication program more quickly than inconsistent actions by leadership. Nothing speaks as powerfully as
someone who is backing up their words with behavior. When an entire team of senior management starts
behaving differently and embodies the change they want to see, it sends a powerful message to the entire
organization. These actions increase motivation, inspire confidence and decrease cynicism.
STEP 5: Empowering People and Removing Barriers
Remove as many barriers as possible and unleash people to do their best work.
Typically, empowering employees involves addressing four major obstacles: structures, skills, systems and
supervisors. We will explore two of these here:

Structural Barriers:
Often the internal structures of companies work as cross-purposes to the change vision. An organization that
claims to want to be customer focused finds its structures fragment resources and responsibilities for products and
services. Companies that claim to want to create more local responsiveness have layers of management that
second guess and criticize regional decisions. Companies that claim to want to increase productive and become a
low-cost producer have huge staff groups that constantly initiate costly procedures and programs. The list is
endless.
Many times, it is difficult to remove these barriers in the midst of the change process. However, some obstacles
are so disempowering that they must be changed. Typically, the most effective of these changes can occur in the
human resources area. Realigning incentives and performance appraisals to reflect the change vision can have a
profound effect on the ability to accomplish the change vision.
Management information systems can also have a big impact on the successful implementation of a change vision.
Up-to-date competitive information and market analysis and the ability to communicate powerfully and effectively
throughout the company in a cost effective way can speed up feedback loops and provide information necessary
for people to do their jobs more efficiently.

Troublesome Supervisors:
Another barrier to effective change can be troublesome supervisors. Often these managers have dozens of
interrelated habits that add up to a style of management that inhibits change. They may not actively undermine
the effort, but they are simply not “wired” to go along with what the change requires. Often enthusiastic change
agents refuse to confront these people. While that approach can work in the early stages of a change initiative, by
Step 5 it becomes a real problem. Easy solutions to this problem don’t exist. Sometimes managers will concoct
elaborate strategies or attempt manipulation to deal with these people. If done skillfully this only slows the
process and, if exposed, looks terrible – sleazy, cruel and unfair – and undermines the entire effort. Typically, the
best solution is honest dialogue.

STEP 6: Generating Short-term wins

Create some visible, unambiguous success as soon as possible.
For leaders in the middle of a long-term change effort, short-term wins are essential. Running a change effort
without attention to short-term performance is extremely risky. The Guiding Coalition becomes a critical force in
identifying significant improvements than can happen between 6 and 18 months. Getting these wins helps ensure
the overall change initiative’s success. Research shows that companies that experience significant short-term wins
by fourteen and twenty-six months after the change initiative begins are much more likely to complete the
transformation.
Realizing these improvements is a challenge. In any change initiative, agendas get delayed, there is a desire to
ensure that customers are not affected, political forces are at work – all of which slow the ability to perform as
promised. However, short-term wins are essential.
To ensure success, short term wins must be both visible and unambiguous. The wins must also be clearly related to
the change effort. Such wins provide evidence that the sacrifices that people are making are paying off. This
increases the sense of urgency and the optimism of those who are making the effort to change. These wins also
serve to reward the change agents by providing positive feedback that boosts morale and motivation. The wins
also serve the practical purpose of helping to fine tune the vision and the strategies. The guiding coalition gets
important information that allows them to course-correct.
Short-term wins also tend to undermine cynics and self-serving resistors. Clear improvements in performance
make it difficult for people to block the needed change. Likewise, these wins will garner critical support from those
higher than the folks leading the change (bosses, board and shareholders). Finally, short-term wins have a way of
building momentum that turns neutral people into supporters, and reluctant supporters into active helpers.
Planning not Praying
Short-term wins rarely simply happen. They are usually the result of careful planning and effort. Why don’t people
plan for these? Often they are overwhelmed with the tasks of the change effort and simply take their eye off this
particular ball. In other cases, people don’t even try because they believe that you can’t produce major change and
short-term performance results. Finally, the lack of short-term wins can often be traced back to insufficient
management expertise on the Guiding Coalition or a lack of commitment by key managers to the change initiative.

Pressure to Perform
Clearly the need to get short-term wins adds a great deal of pressure to an organization in the midst of a
transformation effort. However, when done skillfully, the need to create short-wins can actually increase the sense
of true urgency and actually accomplishing these goals does much to cement the change initiative.

STEP 7: Don't Let Up!

Consolidating Gains and Producing More Change.

Resistance is always waiting in the wings to re-assert itself. Even if you are successful in the early stages, you may
just drive resistors underground where they wait for an opportunity to emerge when you least expect it. They may
celebrate with you and then suggest taking a break to savor the victory.

The consequences of letting up can be very dangerous. Whenever you let up before the job is done, critical
momentum can be lost and regression may soon follow. The new behaviors and practices must be driven into the
culture to ensure long-term success. Once regression begins, rebuilding momentum is a daunting task.
In a successful major change initiative, by stage 7 you will begin to see:
 More projects being added
 Additional people being brought in to help with the changes
 Senior leadership focused on giving clarity to an aligned vision and shared purpose
 Employees empowered at all levels to lead projects
 Reduced interdependencies between areas
 Constant effort to keep urgency high
 Consistent show of proof that the new way is working

A Long Road
Leadership is invaluable in surviving Step 7. Instead of declaring victory and moving on, these transformational
leaders will launch more and more projects to drive the change deeper into the organization. They will also take
the time to ensure that all the new practices are firmly grounded in the organization’s culture. Managers, by their
nature, think in shorter timeframes. It is up to leaders to steer the course for the long-term. Without sufficient and
consistent leadership, the change will stall, and succeeding in a rapidly changing world becomes highly
problematic.

STEP 8: Make it Stick

Anchoring New Approaches in the Culture.

New practices must grow deep roots in order to remain firmly planted in the culture. Culture is composed of norms
of behavior and shared values. These social forces are incredibly strong. Every individual that joins an organization
is indoctrinated into its culture, generally without even realizing it. Its inertia is maintained by the collective group
of employees over years and years. Changes – whether consistent or inconsistent with the old culture – are
difficult to ingrain.

This is why cultural change comes in Step 8, not Step 1. Some general rules about cultural change include:
 Cultural change comes last, not first
 You must be able to prove that the new way is superior to the old
 The success must be visible and well communicated
 You will lose some people in the process
 You must reinforce new norms and values with incentives and rewards – including promotions
 Reinforce the culture with every new employee
Tradition is a powerful force. We keep change in place by creating a new, supportive and sufficiently strong
organizational culture. A Guiding Coalition alone cannot root change in place no matter how strong they are. It
takes the majority of the organization truly embracing the new culture for there to be any chance of success in the
long term.