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DATA SANITY: A Quantum Leap to Unprecedented Results

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"I think you should expand the seminar title: perhaps “Data Sanity and Successful Leadership” I don’t think most of us expected such an emphasis on leadership and the human factor, but it was certainly an essential component that I think most of us found inspiring and encouraging. It’s heartwarming to experience a business professional who finds a way to bring such healing (and workable/productive) concepts to the business of reporting and making $ for our organizations."

Eight Reasons Major Change Initiatives Fail

Insights from John P. Kotter’s book “Leading Change”

Why do major change initiatives fail? It seems obvious: major change will not happen easily for a long list of reasons. However, if you feel your organization is overmanaged and underled with tendencies toward an inwardly focused culture, paralyzing bureaucracy, parochial politics, a low level of trust, lack of teamwork, arrogant attitudes, a lack of leadership in middle management, and the general human fear of the unknown, then John Kotter’s book Leading Change (Harvard Business School Press, 1996) might be for you.

The methods managers have used in the attempt to transform their companies into stronger competitors—total quality management, reengineering, right sizing, restructuring, cultural change, and turnarounds—routinely fall short because they fail to alter behavior. This book identifies an eight-step process that every company must go through to achieve its goals and shows where and how people—good people—often derail. The author reveals what he has seen, heard, experienced, and concluded in many years of working with companies to create lasting transformation. The advice is very practical.

To some degree, the downside of change is inevitable. Whenever human communities are forced to adjust to shifting conditions, pain is ever present. But a significant amount of the waste and anguish we’ve witnessed in the past decade is avoidable. We’ve made a lot of errors, the most common of which, according to Kotter, are these:

Error No. 1: Allowing too much complacency (by far, the biggest mistake), so… establish a sense of urgency.

Error No. 2: Failing to create a sufficiently powerful guiding coalition, so… create one and get it to work like a team.

Error No. 3: Underestimating the power of vision, so… develop a vision and strategy.

Error No. 4: Undercommunicating the vision by a factor of 10 (or 100 or even 1,000), so… use every vehicle possible to communicate it and have the guiding coalition role model the expected behaviors.

Error No. 5: Permitting obstacles to block the new vision, so… empower broad-based action by changing systems or structures that undermine the change vision and encourage risk taking.

Error No. 6: Failing to create short-term wins, so… plan for visible improvements, create them, and visibly celebrate them.

Error No. 7: Declaring victory too soon, so… consolidate gains to produce more change by leveraging increased credibility to change systems, structures, and policies that don’t fit together. Ingrain the vision through hiring and promotion processes.

Error No. 8: Neglecting to anchor changes firmly in the corporate culture (until new behaviors are rooted in social norms and shared values, they are always subject to degradation as soon as the pressures associated with a change effort are removed), so… develop more and better leadership with more effective management.

What are the consequences of these eight errors?

According to Kotter, the consequences of these eight errors are that:

  • 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 the hoped-for results

The first four errors (too much complacency, insufficient powerful guiding coalition, dismissing the power of vision, undercommunication of the vision) result from a hardened status quo. The next three (current culture sabotaging vision, lack of creating short-term wins, declaring victory too soon) affect the introduction of new practices. The last (failure to anchor changes firmly into the culture) keeps changes from sticking.

A lot of frustration felt be quality professionals results from a tendency to give cursory consideration to one through four and hope that undertaking five through seven will get results.

Unfortunately, the eight issues need to be addressed in sequence (with some overlap); omission of a step virtually guarantees failure.

As can be seen by the current emphasis on “leadership” in the business world, distinction between “management” and “leadership” is crucial.

  • Planning and budgeting must give way to establishing direction.
  • Organizing and staffing must give way to aligning people.
  • Controlling and problem-solving must give way to motivating and inspiring.

Ultimately, the status quo need for producing a degree of predictability and order so as to consistently produce short-term results must give way to producing change (often dramatic), then producing even more, and extremely useful, change.

Kotter’s book is valuable and very readable for anyone. Individual chapters deal with each of the errors along with the strategies needed to overcome them. Final chapters deal with “The Organization of the Future” and “Leadership and Lifelong Learning,” which includes a prototype of the 21st century executive.

Portions of this column were abstracted from John P. Kotter’s book Leading Change (Harvard Business School Press, 1996)

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