Leading Change

1. Leading Change Case study

2. Why Firms Fail at Change • Allowing too much complacency • Having no powerful guiding coalition • Underestimating the power of a vision • Undercommunicating the vision • Permitting obstacles to block the vision • Failing to create short-term wins • Declaring victory too soon • Neglecting to anchor changes in the new culture

3. Leading Change By John P. Kotter • Create a Sense of Urgency • Create a Guiding Coalition • Develop a Vision and a Strategy • Communicate the Change Vision • Empower Employees for Broad-based Change • Generate Short-term Wins • Consolidate Gains and Produce More Change • Anchor New Approaches in the Culture

4. Case Study: The Changing Hospital Read the Case

5. Stage 1: Create a Sense of Urgency

6. Sources of Complacency The absence of a major and visible crisis Too much happy talk from management Too many visible resources Human nature capacity for denial Low overall performance standards Complacency A “kill the messenger” or low confrontation culture Org. Structures that focus employees on narrow functional goals A lack of sufficient performance feedback from external sources Internal measurement systems that focus on the wrong indexes

7. Ways to Raise Urgency Level • create a crisis • eliminate obvious examples of excess • set goals so high that they can’t be reached by business as usual • stop measuring sub-unit performance. Measure broader indices of performance • send more information about customer satisfaction and financial performance to more employees

8. Ways to Raise Urgency Level (cont.) • use consultants to force more relevant and honest discussions into management meetings • put more honest discussions of company problems in newsletters and speeches • bombard people with the upside opportunity of change (i.e., reward, future opportunities, etc..) • insist that people talk regularly to unhappy customers, suppliers and shareholders

9. Stage 2: Create A Guiding Coalition

10. Effective guiding coalitions have 4 key characteristics: • Position power • Expertise • Credibility • Leadership

11. Building a Coalition • Find the Right People • power, expertise, and credibility • leadership and management skills • Create trust • through planned off-site meetings • With lots of dialogue and joint activity • Develop a common goal • sensible to the head • appealing to the heart

12. Case Study: The Changing Hospital Stage 1 & 2 Analysis

13. Stage 1: What was done to create a sense of urgency for change? What could have been done? Stage 2 What was done to form a group of people who would drive the change? what could have been done? Case Study: The Changing HospitalStage 1 and 2 Analysis

14. Stage 3: Develop a Vision and a Strategy

15. Vision Leadership Creates Strategies Plans Management Creates Budgets

16. Six Characteristics of an Effective Vision • Imaginable • Desirable • Feasible • Focused • Flexible • Communicable

17. Creating an Effective Vision • initial first draft by an individual • modified & clarified by guiding coalition • effective teamwork is essential • process can be messy, difficult, and charged with emotion • takes months or even years to formulate • appeals to head and heart • ends with direction that is desirable, feasible, focused, flexible and conveyed in 5 minutes or less

18. Stage 4: Communicate the Change Vision

19. Key Elements in Effective Communication of Vision • simplicity • metaphor, analogy, example • multiple forums • repetition • leadership by example • explanation of inconsistencies • two-way communication

20. Case Study: The Changing Hospital Stage 3 & 4 Analysis

21. Stage 3: What was done to develop a vision and strategy for change? What could have been done differently? Stage 4 What was done to communicate the vision? What could have been done differently? Case Study: The Changing HospitalStage 3 and 4 Analysis

22. Stage 5:Empower Employees for Broad-based Change

23. Barriers to Empowerment Formal structures make it difficult to act Bosses discourage actions aimed at implementing new vision Employees understand vision and want to assist, but are boxed in A lack of needed skills undermines action Personnel and information systems make it difficult to act

24. Empowering People to Effect Change • Communicate a sensible vision to employees • Make structures compatible with the vision • Provide the training employees need • Align information and personnel systems to the vision • Confront supervisors who undercut the needed change

25. Stage 6: Generate Short-Term Wins

26. Characteristics of Effective ST Wins • It’s Visible • people can see for themselves • It’s Unambiguous • there is little argument over the call • It’s clearly related to the Change Effort • they can see the relationship

27. The Role of ST Wins • provide evidence that sacrifices are worth it • reward change agents with a pat on back • help fine-tune vision and strategies • undermine cynics and self-serving resisters • keep bosses on board • build momentum

28. Case Study: The Changing Hospital Stage 5 & 6 Analysis

29. Stage 5: How were people empowered to make the changes? What could have been done differently? Stage 6: What possibilities for short-term successes were set-up? What could have been done differently? Case Study: The Changing HospitalStage 5 and 6 Analysis

30. Stage 7: Consolidate Gains and Produce More Change

31. Successful Stage 7 Change • more change, not less. Use credibility • more help is solicited and developed • leadership from senior management • project management and leadership from below • reduction of unnecessary interdependencies

32. Stage 8: Anchor New Approaches in the Culture

33. Anchoring Change in the Culture • culture change comes last, not first • new approaches sink in only after it’s clear they work • requires a lot of talk about the validity of the new practices • may involve turnover • make succession decisions that are culture-compatible

34. Case Study: The Changing Hospital Stage 7 & 8 Analysis

35. Stage 7: What was done to consolidate the successes and produce more change? What could have been done differently? Stage 8: What was done to formalize and institutionalize the change? What could have been done differently? Case Study: The Changing HospitalStage 7 and 8 Analysis

36. Leading Change BY John P. Kotter • Create a Sense of Urgency • Create a Guiding Coalition • Develop a Vision and a Strategy • Communicate the Change Vision • Empower Employees for Broad-based Change • Generate Short-term Wins • Consolidate Gains and Produce More Change • Anchor New Approaches in the Culture