Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.
Understanding Kotter’s 8-step change model
The model was developed by Harvard Business School professor Dr. John Kotter, a notable thought-leader on organizational change.
Kotter recognized that change was difficult for some businesses, especially for those that had been in operation for some time. But he also knew that change was an important factor in a business remaining viable, no matter how much success they had enjoyed in the past.
Big change in an organization is usually the result of bold and courageous leadership, which we will discuss in the next section.
The eight steps of Kotter’s change model
Kotter created his model after witnessing how leaders led their organizations during periods of transformation.
These are the eight steps that will help a business navigate this transformation:
1 – Create urgency
The most significant changes occur because of urgency. For example, urgency might result from a string of negative reviews or the emergence of a powerful competitor. Whatever the scenario, it is important to present change as the solution to a problem.
To feel compelled to act, management must be notified of a problem in advance with convincing evidence or support from key stakeholders.
2 – Form a powerful coalition
This can be achieved by identifying the key playmakers in an organization. Who are the individuals that hold the power in decision making?
In the search to form a coalition, representatives should seek out influential people with a broad range of experience or skillsets.
3 – Develop a vision and strategy
Key decision-makers will only get behind an initiative for change if they can understand the reasons for doing so. Therefore, the vision for change must be clear, concise, and well presented.
It should also:
- Reflect the core values of the business or identify new core values.
- Contain a mission statement.
- Detail a logical and feasible change strategy.
4 – Communicating the vision
Presenters should not be afraid to sell the vision to decision-makers if required to do so. They must present their vision with confidence and conviction. In other words, they must truly believe that their strategy will be successful.
Wherever appropriate, relate the strategy for change to pre-existing company values. Address any concerns from the audience publicly in a calm and empathic manner.
5 – Remove the obstacles
Individuals are often the greatest obstacles to change. Identify those most resistant to change and work collaboratively to address any concerns. Then, reward or recognize those who were open to change from the very beginning.
6 – Create short-term wins
Early in the change process, short-term wins are crucial to building momentum and confidence. This is particularly true of large changes with long timelines because people can become disheartened at the prospect of the job ahead of them.
Again, incentivization is useful for those who meet and continue to achieve short-term wins.
7 – Consolidate gains
Consolidation means building on quick wins through expansion and repetition. Each win should be analyzed to determine areas for possible improvement.
Subsequent goal-setting should also strike a balance. Each goal must be slightly more ambitious than the last without causing employee disenfranchisement.
8 – Make it stick
Making a change stick means that it becomes part of company culture. This process can take years and usually involves mistakes or employee turnover along the way.
To ensure that management cannot revert to the status quo, change success stories should be regularly highlighted. Employee contributions should also continue to be celebrated and rewarded where appropriate.
It is also essential that a business knows what it stands for before recruiting. This allows HR managers to instill core values into new employees from day one.
Kotter’s 8-step change model examples
We’ll now conclude this article with some real-world examples of companies that have successfully implemented the Kotter 8-step model.
Coty Inc. is an American multinational beauty company that was founded in 1904.
After a period of rapid expansion and in preparation for an IPO, Coty realized that it needed to improve the efficiency of its supply chain.
Several “low-hanging” initiatives had resulted in minor improvements, but progress made by the company’s Supply Chain Leadership Team had plateaued.
To reach a level of supply chain excellence, Coty worked with Kotter International to develop a change initiative with the following pillars:
- Organization-wide participation.
- Mobilization of every level and function of the business to take on the role of change agent. This involved asking questions and taking action on directives from leadership.
- Finding non-traditional ways to identify new revenue streams, increase productivity, improve quality, drive sustainability, and manage costs.
The results of the initiative were impressive, with employees permitted to take risks and become drivers of change.
Over $39 million was saved from supply chain operations in the first year, with more than 2,000 employees volunteering to become change agents.
NetApp is a California-based enterprise storage and data management company that implemented Kotter’s model after noting a shift in customer purchasing patterns.
Essentially, customers were buying from third parties who offered storage solutions packaged with other hardware and software.
They were not, as they once did, buying data management solutions direct from vendors such as NetApp.
Unable to leverage its high-cost, direct sales strategy, the company was at risk of being taken over as profitability and its share price tumbled.
To reverse this trajectory, senior leaders at NetApp worked with Kotter to help them achieve three strategic goals:
- Increase market share.
- Drive organizational efficiencies, and
- Implement global partnerships.
To drive change across the company, a level of urgency was created whereby employees were asked to buy into a vision where NetApp was the leader in the emerging cloud computing market.
With this vision serving as the company’s north star, 63% of all worldwide employees volunteered their services in a coordinated and creative way.
Ultimately, NetApp was able to jump three market share positions by adopting the mindset that the essence of change was urgency.
Fortune 500 semiconductor manufacturer
An unnamed Fortune 500 semiconductor manufacturer also worked with Kotter after noting that its approach to innovation had stagnated and inefficiencies were leaving significant amounts of money on the table.
It was also noted that engineers had fallen into a predictable pattern of product development, lacking the passion required for such a cut-throat industry and not considering their individual roles in the context of a broader value chain.
To accelerate product development, drive enhanced value realization, and shift employee mindsets, the semiconductor manufacturer developed the following change initiatives:
- Increase collaboration across the full development cycle to identify efficiencies that could reduce the cycle time by months or even years.
- Remedy chronic quality challenges while increasing yields by 10-20%.
- Institute a new way of working that could be scaled to increase operational efficiency across the business, and
- Deliver demonstratable, unambiguous results within a few weeks to justify continued investment in the change initiative.
In less than a month, there was a demonstrable shift in development cycle time, with smaller teams of 10-20 people driving exponential value in the business after five months.
For one high-priced product, the development cycle time was reduced from 80 weeks to 10 weeks.
Kotter’s model helped the manufacturer think differently about the full system and reconsider the power of people within it.
Diverse perspectives were incorporated in the early stages of development, which better equipped the teams to solve cycle time problems and persistent yield issues.
These actions were underpinned by a distinct change in employee mindset. Instead of believing themselves to be cogs in a vast, incomprehensible machine, individuals started to take ownership of their innovations and understand their contributions to the system as a whole.
- Kotter’s 8-step change model helps decision-makers adapt to transformational change.
- Kotter’s 8-step change model was developed by leading management consult Dr. John Kotter. By observing organizations undergoing transformation, he identified that leadership ultimately determined the likelihood of change.
- Kotter’s 8-step change model advocates urgency, stakeholder engagement, and a clear vision as important preliminary change driving ingredients. Change must then be communicated to leadership convincingly so that a plan rewarding short and long-term wins can be implemented.
Read Next: Lewin’s Change Management.
Related: Strategy, Business Models, Tech Business Models, Jobs-To-Be Done, Design Thinking, Lean Startup Canvas, Value Chain, Value Proposition Canvas, Balanced Scorecard, Business Model Canvas, SWOT Analysis, Growth Hacking, Bundling, Unbundling, Bootstrapping, Venture Capital, Porter’s Five Forces, Porter’s Generic Strategies, Porter’s Five Forces, PESTEL Analysis, SWOT, Porter’s Diamond Model, Ansoff, Technology Adoption Curve, TOWS, SOAR, Balanced Scorecard, OKR, Agile Methodology, Value Proposition, VTDF Framework, BCG Matrix, GE McKinsey Matrix.
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