Overview of the model
Kotter’s Change Management Theory is also popularly known as Kotter’s 8 step change model that companies regularly apply to facilitate better change management. The model was proposed by the globally renowned author and Harvard professor Doctor John Kotter in the year 1995. In his assessment of change management, he explained organizational change management as a process inclusive of eight key steps.
Each of the eight dimensions of organizational leadership in the face of transformation proposed by Doctor John Kotter is elaborated below.
Application of Kotter’s 8 step change model
Step 1: Creation of urgency
The very first step is to create a sense of urgency around the idea of a proposed transformation or a transformation that will be crucial for the company to make in the near future. For that, the top management and leaders need to assess if the business is exposed to any potential risks currently or in the near future. Similarly, the leaders need to analyze if there is any opportunity available in the external business environment or internally that the company can exploit by bringing change with a sense of urgency. When the risks and opportunities are identified, leaders can then create great importance around the need for immediate transformations. To realize these risks and opportunities, leaders should seek regular feedback from employees, customers, shareholders etcetera.
It is noteworthy that this is the most important stage when it comes to progressing with an organizational change. This phase will determine if stakeholders are on the same page or not. Having said that, given below are some additional measures using which leaders can successfully implement this step.
- Conducting effective strategic analysis: Companies need to conduct an affirmative strategic analysis using relevant strategic analysis models like PESTLE analysis, Porter Five Forces Analysis, and so on to recognize the opportunities and threats. Using strategic analysis modes, change managers can highlight the threats and opportunities in a more persuasive way.
- Formulating open communication strategies: Thereafter, to convey the sense of urgency built around threats and opportunities, change managers then need to plan effective communication strategies to communicate the details and information linked to the need for immediate action.
- Engaging: Subsequently, change managers or leaders at the helm of the change need to find ways in which they can engage other stakeholders in the change process. When there are more supporters of the change, the convincing power by default becomes much higher.
Step 2: Formation of a powerful coalition
In the next step, after establishing significance around the need for transformation, leaders proposing the change need to convince all stakeholders to form an influential coalition that backs the change. To get stakeholders involved and to persuade them, leaders must explain the benefits of the change for each stakeholder. When leaders proposing the change have a coalition supporting their idea of change, the top management will have a greater inclination to agree on the same. In simpler terms, coalitions will lead to strong lobbies backing the idea of change.
The formation of coalitions too would require persuasive communication strategies and it needs to be effectively planned as to what kind of a coalition will be the most beneficial for a change project. The key idea is to form a coalition with innovators, change leaders, and influential stakeholders across all departments within the company. Such coalitions will give an enormous boost to the feasibility of the change project being accepted.
Step 3: Creation of vision for change
Subsequently, leaders need to create a vision for the change. This vision needs to have great clarity in terms of what the change is aimed at and how leaders will make it successful. Having said that, it is also essential to ponder on the purpose of the change and crosscheck its alignment with the mission and vision of the organization. Lastly, leaders need to associate core values with the change and should look to make the vision more comprehensive and long-term. The following dimensions are necessary to consider when the vision for a prospective change needs to be created.
- Assessment of goals linked with the change
- Determining the core values linked to the change
- Setting long term goals for the success of the change (5 to 10 years vision)
- Defining clear objectives and strategies
- Designating milestones and key performance indicators
Step 4: Communication of the vision
When it comes to change management, strategic communication is of massive importance. The same has been emphasized in Kotter’s change management theory as well. After the change has been envisaged in totality, the vision linked to it needs to be communicated to all stakeholders. Further, the goals, objectives, values, and metrics to assess the performance of the change also need to be conveyed to the employees. The more effective the communication the greater will be the success in the integration of the change as everyone will clearly know what the change is about and what is expected of them. When all stakeholders are aware of the vision and their roles, they will have a positive attitude towards the change and will begin to make way for it with greater enthusiasm. This is where not only leaders’ communication skills but their persuasive skills will also be tested.
Step 5: Removal of obstacles
Any strategic plan pertaining to the incorporation of organizational changes will have to face various obstacles and hindrances. For instance, employees’ resistance to change can be a major obstacle while bringing transitions onboard. Since obstacles can pose threats to the successful incorporation of changes, they need to be identified and removed. It is the responsibility of the leaders to propose clear plans of action to negate obstacles and get the process of change underway.
Step 6: Creating short-term wins
In the context of this step, Kotter explained that changes would not translate overnight and it is imperative to keep the momentum going in a positive direction. Hence, leaders need to create short-term victories that can be viewed as motivators for staying persistent in the process of change. Sometimes, some organizational changes can take a while to show tangible results. In such a scenario, employees may begin to feel discouraged or even the top management may begin to feel that the transformation has not paid off. Creating and celebrating small milestones as parts of the larger goal linked to the change is hence essential. KPIs and metrics will have a pivotal role to play in creating and tracking small victories.
Step 7: Building on the change further
The next step explains that leaders need to monitor the changes and hence, look to optimize the process and positive effects of the change. Leaders need to assess the positives and negatives in the current performance of the change management and should accordingly make the necessary improvements to fill the gaps. Capitalizing on the current progress also involves setting goals with more ambitious targets to improve the momentum of transformations and also managerial effectiveness. Thus, leaders need not be complacent with small victories but should look to drive constant enhancements. To drive improvements in the new status quo after a change is brought to the organization, they must consider the following scenarios.
- If new expertise is required to drive improvements in the new state
- If employees need upskilling or new tools to increase capabilities
- The metrics on which progress will be measured
- Strategies to optimize employee engagement
- Management of team motivation
Step 8: Anchoring the change
The final step in effective change management as per Kotter’s theory is to anchor the change in the organization’s design and culture. Needless to say, every change is brought in with a long-term vision and hence, for its success, it needs to be incorporated into the company’s culture. To elaborate, it has to reflect in the everyday practices and short-term tactics of the organization. In simpler terms, the leaders should facilitate the integration of the change effectively enough such that everyone can adapt to it comfortably and it becomes a tangible virtue in the company.
Kotter’s Change Management example taking Google’s case
Google is an exemplary organization in terms of what it does, how it achieves its goals, and its impressive visions for the future. No wonder Google is a dream organization for millions of young people hailing from different parts of the world. In fact, Google has established its dominance so deeply that there’s hardly anyone who would be unaware of its name. Google’s dominance is not new and it had emerged as a leader already in the early 2000s. However, to keep that edge and to succeed in its large ambitions, even Google needed restructuring and meticulous change management.
Problems started emerging for Google when Google became an entity too large and complex to manage. In the last two decades or so, Google undertook the most complex and diverse projects ranging from wearable technology, driverless cars, AI innovations to smart homes. While diversification is always seen as a good business strategy, such massive diversification at Google was leading to mismanagement and chaos. That is when Larry Page, Google’s co-founder took a major call to disintegrate Google into different entities. Further, all these separate entities were conglomerated under the umbrella company, Alphabet in 2015.
Let’s assess how this mammoth transformation at Google moved through Kotter’s model of change management.
- Creation of urgency: Larry Page created a sense of urgency and call for immediate action by explaining to stakeholders how extremely diverse and large projects being helmed by the same company can expose the company to risks and threats. Further, he created a sense of urgency by explaining how things would be managed much more effectively when different projects are managed in a split-up arrangement as that would help the umbrella organization to streamline each project of the company and also ensure greater accountability.
- Formation of strong coalitions: To take the idea of the change forward, Larry page formulated strong coalitions with change managers and other founders of Google. He also formed coalitions with the executive leaders managing Youtube, Fitbit, and other companies to convince them that the split-up will result in better results for each subsidiary in the conglomerate.
- Creation of vision: Next, Larry Page worked on creating an impressive vision for this change. He also figured out the new shared values related to this change and determined the long-term goals that were associated with this change proposal. Along with the defined vision for the change, he also defined the impact of the change, the stakeholders, the milestones for the change, and the KPIs to measure the success of the change. His vision of this change primarily revolved around the idea that this split up will lead to long-term benefits, empower companies to prosper with great momentum, optimize transparency, and will lead to more ambitious things being done at Google.
- Communication of the vision: Thereafter, Larry Page worked on a clearly defined communication strategy and established multiple channels of communication. This helped him to communicate the vision, values, goals, and benefits associated with the prospective change in a way that inspired the stakeholders, managers, executive leaders, and employees to consider the change as being positive and beneficial in the long run. Communication channels were further backed by strong feedback mechanisms.
- Removal of obstacles: Larry page had identified all the possible obstacles beforehand and he had clear plans for countering each obstacle. Getting stakeholders on board was a very positive development in terms of tackling obstacles. Further, his fine leadership qualities and his transformational style of leadership played a major role in getting rid of the objectives and taking the change forward.
- Short-term wins: Google has always had a robust culture of employee recognition and celebrating its people for their achievements. Larry Page further capitalized on the same to set milestones for this change process and to celebrate the wins. Such appreciation and backing by the co-founder helped employees to stay highly motivated and commit greater diligence and working hours to make the change successful.
- Anchoring the change: Splitting entities and then placing them under the umbrella of Alphabet in itself was the greatest move in the direction of sustaining the change and fixing overall supervision with accountability. To anchor the change further, Larry Page announced that each company under Alphabet will be accountable for its expenditures and revenue generation independent of each other. He encouraged his employees to work with great spirits, enthusiasm, and commitment for their own project rather than having to worry about Alphabet as a whole. This paid off really well as it helped employees to focus on narrow goals. Also, setting accountability brought out the best in everyone and each company under Alphabet is now a leader in its domain. Having said that, Larry Page’s vision for this change and the excellence with which he managed it is largely responsible for Google’s success at present.