164662811-Why-Transformation-Efforts-Fail.ppt

Why transforamtional efforts faills

1. WHY TRANSFORMATION EFFORTS FAIL
Leading Change
By: Group 4

2. Outline
The research
Eight common mistakes
Lessons to be learned

3. The research
More than 100 companies with different
characteristics have been studied.
The efforts have gone under many names.
The result of changes

4. The research
In almost every case the basic goal was
“To make fundamental changes in how business is
conducted in order to help cope with a new, more
challenging environment”

5. Error #1: Not establishing a great enough
sense of urgency
How most successful changes begin.
Existing and impending crises, competition, changing
trends and technologies or potential business
opportunities.
Over 50% have failed in phase 1, because of:
Underestimating the need for motivating people.
Overestimating their success.
A lack of patience.
Demotivation effect due to downside possibilities.
Paralyzed senior management

6. Error #1: Not establishing a great enough
sense of urgency
The need for a leader, CEO or division manager to
sense urgency.
Bad results are both a blessing and curse in first
phase.
An almost universal tendency to shoot the bearer of
bad news.

7. Manufacturing urgency
In one case a CEO deliberately engineered the
largest accounting loss in the company’s history,
creating huge pressures from Wall Street in the
process.
This led to increased sense of urgency within
the organization to bring about a change.

8. When is urgency enough?
Urgency rate is high enough only when at least 75%
of the company’s management is convinced that the
current scenario is not sustainable any longer.
Anything less may put the organization’s future in
jeopardy.

9. Error#2: Not creating a powerful enough
guiding coalition

10. Error#2: Not creating a powerful enough
guiding coalition
In most successful cases a coalition is always
pretty powerful.
Most of the senior management always forms the
core of the group.
More than a high sense of urgency is required like
providing a full assessment of the company’s
problems, off-side retreats etc. to build trust and
effective communication.

11. Error#2: Not creating a powerful enough
guiding coalition
The guiding coalition members, are expected
to work outside of formal boundaries and
protocol.
This may sound awkward, but is clearly
necessary.

12. Error#2: Not creating a powerful enough
guiding coalition
Reasons for failing:
No history of teamwork at top.
Lack of conviction in the need for change process.
Lack of a strong line leadership.
Expecting the team to be led by a staff executive.

13. Error#3: lacking a vision

14. Error#3: lacking a vision
In very successful cases, a coalition develops a
picture of future.
A vision says something that helps clarify the
direction in which an organization needs to move.
A list of confusing and incompatible projects.
A useful rule of thumb.

15. Error#4: Undercommunicatingthe vision

16. Error#4: Undercommunicating the vision
Three patterns with respect to communication:
Holding a single meeting or sending out a single
communication.
Making speeches to group of employees.
Newsletters and speeches.
Particularly challenging in case of short term
sacrifices.
Walk the talk, nothing undermines change more
than wrong behavior by important individuals.

17. Error#5: Not removing obstacles to the new vision

18. Error#5: Not removing obstacles to the new vision
Emboldened employees to try new approaches.
Obstacles for employees:
Narrow job definitions.
Organization Structure.
Compensation and appraisal systems.
Action is essential both to empower others and to
maintain the credibility of change effort.

19. Error#6: Not systematically planning for and
creating short term wins

20. Error#6: Not systematically planning for and
creating short term wins
Most people go on a long march unless…
In one or two years you should find:
Quality beginning to go up.
Statistically higher customer satisfaction
rating.
Decline in net income stopping.
Product introduction.
Upward shift in market share.
In successful cases managers actively plan to
achieve objectives. They don’t hope for.
Commitments to produce short-term wins helps
keep urgency level up.

21. Error#7: Declaring victory too soon.

22. Error#7: Declaring victory too soon.
New approaches are fragile and subject to regression.
Ironically, it is often a combination of change
initiators and change resistors that creates the
premature victory.
What, instead of declaring premature victory?

23. Error#8: Not anchoring changes in the
corporation’s culture.
In the final analysis change sticks when it becomes
“ the way we do things around here”
Two factor in institutionalizing change:
To show people, the effects of new approaches.
Make sure that next generation of top
management will personify the new approach.

24. Lessons to be learned…
Change process goes through a series of phases.
Critical mistakes in any of the phases can have
devastating impacts if not handled with care.
What is needed:
A simple vision to guide people.
Effective communication.
Short-term goals to keep the momentum up.
Constant appraisal of the work done
Not giving up till change becomes the norm.
A fewer errors can spell the difference between
success and failure.

25. Reference
John P. Kotter, “Leading Change, Why
Transformation Efforts Fail”, HBR , April 1995.
Thank You…