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Models and Tools of Change Management: Kotter's 8 Steps Change Model

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Abstract

The organizational theory literature is about continuity and stabilization in most cases, and organizations change all the time, each and every day (Burke 2002, xiii). No organization today - large or small, local or global - is immune to change (Kotter 1998, 27). The nature of change has been a philosophical debate throughout the human history, and it remains a subject matter of scholarly exploration in the contemporary developed world, as researchers try to understand the complexities of moving human groups from one state to another (Kiel 2010). Together with academic interest in the change management, the amount of significant, often traumatic change in organizations has grown remarkably over the past two decades because of the transformation in the external environment, connected with globalization and market needs, and more and more organizations are pushed to change (Kotter 1996, 3; Burke 2002, xiii). These efforts in understanding and managing organizational change impelled researchers to develop a number of models, each of them has various backdrops and philosophical groundings. Kotter’s eight-step change model stands as a prominent exemplar in the change management literature. The model offers a process to successfully manage change and avoid the common pitfalls that beset failed change programs (Kavanagh and Thite 2009, 183). The purpose of this paper is to provide a critical review of Kotter’s eight-step model for transforming organizations.
Models and Tools of Change Management:
Kotter’s 8 Steps Change Model
Enis Aldemir
June 2010, TX
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Introduction
The organizational theory literature is about continuity and stabilization in most cases,
and organizations change all the time, each and every day (Burke 2002, xiii). No organization
today - large or small, local or global - is immune to change (Kotter 1998, 27). The nature of
change has been a philosophical debate throughout the human history, and it remains a subject
matter of scholarly exploration in the contemporary developed world, as researchers try to
understand the complexities of moving human groups from one state to another (Kiel 2010).
Together with academic interest in the change management, the amount of significant, often
traumatic change in organizations has grown remarkably over the past two decades because of
the transformation in the external environment, connected with globalization and market needs,
and more and more organizations are pushed to change (Kotter 1996, 3; Burke 2002, xiii).
These efforts in understanding and managing organizational change impelled researchers
to develop a number of models, each of them has various backdrops and philosophical
groundings. Kotter’s eight-step change model stands as a prominent exemplar in the change
management literature. The model offers a process to successfully manage change and avoid the
common pitfalls that beset failed change programs (Kavanagh and Thite 2009, 183). The purpose
of this paper is to provide a critical review of Kotter’s eight-step model for transforming
organizations.
Why transformation efforts fail?
Kotter’s well known article (1995) on change management starts with this question: Why
transformation efforts fail? Some scholars define organizational change as ‘the process of
continually renewing an organization’s direction, structure, and capabilities to serve the ever-
changing needs of external and internal customers’ (Moran and Brightman 2001, 111). Todnem
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argues that, although it is not easy to identify any consensus regarding a framework for
organizational change management, there is an agreement on two important issues: Firstly, the
pace of change has never been greater than in the current business environment; secondly,
change, being triggered by internal or external factors, comes in all shapes, forms and sizes, and
therefore affects all organizations in all industries (2005, 369).
Organizations launch change initiatives with great expectations under many banners;
“total quality management, reengineering, right sizing, restructuring, cultural change, and
turnaround.” But in almost every case, the central purpose is the same: to transform the
organization’s way of doing business fundamentally in order to survive in the new, and more
challenging market environment (Kotter 1995, 59). However, only a few of these change efforts
manage to complete successfully; a few finishes with utter failures, and most of them fall
somewhere in between, with a distinct tilt toward the lower end of the scale. According to a 1991
survey, out of 220 electronics companies which were implementing a total quality program, 86%
of them had failed in the program (Schaffer and Thompson 1992, 81). On the other hand,
successful cases indicate that the change process goes through a series of stages, each lasting a
considerable period of time and commitment, and critical mistakes in any of the stages can have
a devastating impact on the momentum of the change process (Kotter 1995, 59-60).
Theoretical framework of the 8 step model
Kotter provides an eight step model for leading change, and puts leadership in the heart of
his model. These steps can be clustered into three titles: “generating-consolidating-anchoring”.
In this sense, Kotter’s model has similarities with Lewin’s (1947) “unfreezing-changing-
refreezing” model.
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Table-1 Kotter’s eight step change model (Kotter 1995, 61; Kavanagh and Thite 2009, 185)
The first four stages focus on the practices associated with “generating/unfreezing” the
organization:
1. Establishing a sense of urgency
a. Examining market and competitive realities
b. Identifying and discussing crises, potential crises, or major opportunities
c. Providing evidence from outside the organization that change is necessary
2. Forming a powerful guiding coalition
a. Assembling a group with enough power to lead the change effort
b. Encouraging the group to work together as a team
c. Attracting key change leaders by showing enthusiasm and commitment
3. Creating a vision
a. Creating a vision to help direct the change effort
b. Developing strategies for achieving that vision
4. Communicating the vision
a. Using every vehicle possible to communicate the new vision and strategies
b. Teaching new behaviors by the example of the guiding coalition
c. Building alignment and engagement through stories
d. Keeping communication simple and heartfelt
The next three stages introduce many new practices, “consolidating/changing”:
5. Empowering others to act on the vision
a. Getting rid of obstacles to change
b. Changing systems or structures that seriously undermine the vision
c. Encouraging risk taking and non-traditional ideas, activities, and actions
6. Planning for and creating short-term wins
a. Planning for visible performance improvements
b. Creating those improvements
c. Recognizing and rewarding employees involved in the improvements
7. Consolidating improvements and producing still more change
a. Using increased credibility to change systems, structures, and policies that do not fit
the vision
b. Hiring, promoting, and developing employees who can implement the vision
c. Reinvigorating the process with new projects, themes, and change agents
Finally, the last stage is required to ground the changes in the corporate culture,
“anchoring/refreezing”, and make them stick:
8. Institutionalizing new approaches
a. Articulating the connections between the new behaviors and corporate success
b. Developing the means to ensure leadership development and succession
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Step 1 – Establishing a sense of urgency
The first step of the change process underlines an increasing sense of urgency and a need
to gain cooperation. When the urgency level is low, it is hard to convince key individuals to
participate in a change process, and without motivation the effort goes nowhere. Kotter claims
that this first step is essential because getting an organizational change program started requires
the aggressive cooperation of many individuals, and mentions that 50% of the companies he
observed had failed in the first step (1995, 60).
At this point the role of effective leadership is important in terms of creating a sense of
urgency. In most cases it is hard to push people out of their “comfort zones” in an organization
where there are too many managers, but not enough leaders. Since change, by definition requires
creating a new system, which in turn always demands leadership. Producing change is about
80% leadership, and about 20% management (Kotter 1998, 33). In line with Kotter, Kelman
defines the key role of leaders as “establishing a sense of urgency- a realization that the
organization’s prosperity and even survival are at stake” (2005, 41).
Kotter further notes that change might start more easily with a natural financial crisis. But
“allowing errors to blow up instead of being corrected or allowing financial losses in order to
wake people up” push urgency levels up (1996, 45-46). He also indicates that at least 75% of the
management should honestly convince that the company must change its way of doing business
in order to launch a healthy start (1995, 62).
Step 2 – Building the guiding team
Kee and Newcomer elucidate that while change in the ways of conducting business is
usually called organizational change, the reality is that change is not organizational unless it is
first individual change, and then team change (2008, 15). Kotter also stresses out that major
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renewal programs often start with just one or two people, and in cases of successful
transformation efforts, the leadership coalition further grows (1995, 62). In today’s world the
organizations are less hierarchical but more complex and leaders need support of internal and
external stake holders (employees, partners, investors and regulators) for many types of
initiatives (Kotter 1998, 30).
According to Kotter, a strong guiding coalition of change management should be based
on three key values: level of trust, shared objective, and a right composition. The guiding
coalition should refer to a position power that enough key players and front line managers are in
the board. Also the board should have enough expertise, in terms of various points of views,
discipline, and work experience, credibility that the crew has good reputation so that employees
can follow them, and leadership that the change agent has enough proven leadership skills
(Kotter 1996, 52-57). Efforts that do not have a powerful enough guiding coalition can make
apparent progress for a while, but sooner or later the opposition gathers itself together and stops
the change (Kotter 1995, 63).
Step 3 – Creating a vision
A vision says something that helps clarify the direction in which an organization needs to
move, and it refers to a picture of future with some explicit or implicit commentary why people
should strive to create that future. Furthermore, vision motivates people to take action in
appropriate direction, and it helps change managers coordinate activities of different participants
(Kotter 1995, 63). Kee and Newcomer discuss the leader’s role in transformation and mentions
that effective leadership requires vision oriented approach, rather than goal directed (2008, 55).
According to Kotter, without a sensible vision transformation effort can easily dissolve
and incompatible projects can take organization in the wrong direction or nowhere at all. Also a
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clear vision requires clear understanding of plans and regulations, so over regulation affects the
vision adversely (1995, 63). Effective visions are focused enough to guide decision making yet
are flexible enough to accommodate individual initiative and changing circumstances (Kotter
1998, 30). Cole, Harris and Bernerth claims that change vision, clarity, executive sentiment, and
appropriateness can improve and facilitate employee’s understanding of change experience
(2006, 354).
Step 4 – Communicating the vision
Transformation is not possible except a massive number of people are willing to help in
the organization, but employees will not make sacrifices, even if they are unhappy with the status
quo, unless they believe that useful change is possible (Kotter 1995, 63). Also real power of
vision is unleashed only when most of the people have a common understanding of its goals and
directions. Failures of the communication of vision are often referred to the incapability of
lower-level employees, a general human nature to resist change, thus, resistance to acceptance of
the information of change (Kotter 1996, 85-86).
In more successful transformation efforts, executives use all existing communication
channels to broadcast the vision (Kotter 1995, 64). Intensive communication necessary to change
efforts, but real communication comes from deeds. It is stronger than from messages and words
(Richardson and Denton 1996, 207; Kotter 1995, 64).
Step 5 – Empowering the action and removing obstacles
Starting from fifth step, generating phase terminates and consolidation phase takes into
affect. Effectively completing steps one through four of the transformation process already does
a great deal of empower people. The purpose of step five is mainly to empower a broad base of
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people to take action by removing as many barriers to the implementation of the change vision as
possible (Kotter 1996, 102).
Empowerment literally means giving employees power, which makes them able to do
what requirements to be done in the change process. Empowerment also means providing
employees with the knowledge, skills, opportunity, autonomy, self-confidence and resources to
administer themselves, and be accountable for the change process (Gill 2003, 308). Kotter
identifies four main barriers that block empowerment: (a) information and personnel systems, (b)
a lack of needed skills, (c) bosses discourage employees to take action, and (d) formal structures
make it difficult for employees to act (1996, 102). To remove those barriers, change managers
should align structures that block action, train employees to provide them with right skills and
attitudes for the project, align information and personnel systems according to vision, and
confront supervisors who undermine the change effort.
Step 6 – Creating short term wins
Since real transformation takes a considerable amount of time, short term goals and wins
are useful in keeping the momentum. Without short term wins, there is a risk for people to give
up, or become a change resistant (Kotter 1995, 65). The short-term wins should be related to
change effort, unambiguous, and visible. Targeting short-term wins increases the pressure on
employees and their commitment to the change effort (Kotter 1996, 121).
Step 7 – Consolidating improvements
Although short term wins are important in keeping the urgency level up, it would be
catastrophic to declare victory too soon. Furthermore, it takes time that changes transform the
culture of the organization, and declaring victory too soon will help irrational and political
resistance to reverse the fragile new form (Kotter 1995, 66). Laframboise, Nelson, and Schmaltz
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pointed out another aspect of resistance to change that managing people is about managing
feelings. Many employees take change a very personal and emotional issue, and acceptance of
change can be difficult, especially when it involves their work environment. Employee resistance
can pose considerable obstacles to change effort, particularly for projects that attempt to change
the way in which employees work (2003, 306). Kotter introduces a number of actions in order to
consolidate improvements such as increasing credibility to change systems, structures and
policies that do not fit the vision; hiring, promoting and developing employees who can
implement the vision; and giving a boost to the process with new projects, themes, and change
agents (1998, 32).
Step 8 – Anchoring new approaches in the culture and making change stick
Culture refers to shared values and norms of behavior among employees. Inserting new
approaches into the old cultures is not an easy task. Common belief for a change effort to
succeed is first start with changing the organizational culture. However, change comes last not
first (Kotter 1996, 148-152). Cultures that are more status quo oriented may present a significant
challenge in anchoring new approaches (Kee and Newcomer 2008, 69). The change turns into a
culture when new form becomes the way of doing business, and when it seeps into the
bloodstream of the organization. Kotter mentions two important factors in institutionalizing
change in corporate culture: a conscious attempt to show the importance of new approaches,
behaviors, and attitudes that helped improve performance; and establishing a promotion system
that carries people to the next generation of top management who really does personify the new
approach (Kotter 1995, 67).
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Discussion and conclusions
Kotter’s eight step change model has many advantages right along with its few
deficiencies in implementation. The model is not related to the complexity theory, but this linear
model provides a more predictable and manageable change process. The steps are mostly clear,
understandable, and give guidance for the process. The focus is on the acceptance and
preparedness for the change, which makes it an easier transition.
On the other hand, this model seems to be more applicable for business rather than public
organizations. The examples in his studies mostly introduce private sector implications, and very
basic elements of government such as politics, hierarchy, and bureaucracy did not taken into
consideration. Additionally Kotter asserts that a true sense of urgency is rare, because it is not a
natural state of affairs, and has to be created and recreated (2008, 15). Some of the processes are
hard to implement in public sector, such as creating urgency by creating crisis, or at least by
passing over some mistakes, because of the political effect on the job. As Appleby (1945) noted,
government is different, because government is politics. Besides, public administrators should
focus on non-linearity and uncertainty of public management (Kiel 1994, 174). Thus complexity
theories are more applicable for public organizations rather than Kotter’s linear model.
Furthermore, Kavanagh and Thite assert that the model requires all steps to be worked
through order, and completely, otherwise will completely fail the process. Skipping even a single
step or getting too far ahead without a solid base almost always creates problems (2009, 183).
This fragile structure of the model complicates the process, and reduces the success chance. In
addition, once the process has started, it is difficult to change the direction, since the steps are
closely tied to each other.
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Lastly, the structure of the model clearly shows that, this is a top-down model, and it
gives no room for co-creation or other forms of true participation. However one of the most
important elements of the model requires commitment, but it does not give enough room, at least
does not define the tools for active participation of the employees. This may lead to deep
dissatisfactions among employees if the stages of the grief, and individual needs are not taken
into consideration.
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Reference List
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Article
Full-text available
Purpose The purpose of this paper was to examine the interaction effects of managers' perceptions of the supporting vision clarity, appropriateness, and execution of a major organizational change on their job satisfaction, organizational commitment, turnover intentions, and role ambiguity. Design/methodology/approach Data were collected from upper and middle‐level managers of a Fortune 500 US manufacturer and maker of consumer goods involved in a large organizational change initiative. A survey was completed by 217 managers, for a response rate of 89 percent. Change attitudes, job satisfaction, organizational commitment, turnover intentions, role ambiguity, and control variables were all assessed. Findings A three‐way interaction between change vision clarity, change appropriateness, and change execution was found to predict managers' job satisfaction, turnover intentions, and role ambiguity. Research limitations/implications The study relied on self‐reports collected at one point in time, allowing for the possibility of common method bias. The complex, nonlinear relationships indicate that method bias cannot fully account for the reported relationships. Practical implications Study results illustrate that the individual experience of major change is multifaceted and that simultaneously considering the combined effects of individual's change attitudes including readiness (in the form of believing a change is needed and appropriate) and the perceived effectiveness of the change execution on key job‐related outcomes can help practitioners understand more fully the implications of organizational change. Originality/value The findings lend support to the notion that individual's sentiments concerning organizational change are interactive and should not be ignored.
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Unleashing change: A study of organizational renewal in government
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Kelman, Steven. 2005. Unleashing change: A study of organizational renewal in government. Washington, D.C.: Brookings Institution Press
Managing chaos and complexity in government: A new paradigm for managing change, innovation and organizational renewal
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Kiel, L Douglas 1994. Managing chaos and complexity in government: A new paradigm for managing change, innovation and organizational renewal. San Francisco, USA: Jossey Bass ________ 2010. Models and tools of change management. University of Texas at Dallas (class lecture) May 26, 2010