This Guide is intended to help teams engage more fully with the ideas, principles and practices described in the book, Change: How Organizations Achieve Hard-to-Imagine Results in Uncertain and Volatile Times by John P. Kotter, Vanessa Akhtar, and Gaurav Gupta, by applying them to your own organization.
You’ll find this Guide covers a lot more than can be absorbed in one or two hours. Choose the topics that are most relevant to your organization, and take the time to thoroughly explore those that apply most to your group and the current situation. Come back when circumstances change for a different take on the contents as they become more relevant under future circumstances. Because, well, one theme of the book is that, most certainly, circumstances WILL change.
For ease of use, we have created for each of the book’s chapters a short summary followed by discussion questions you may want to use or modify for your group. The Guide for each chapter is otherwise unique and may include relevant videos, assessments, case studies, additional resources, and references to other chapters in the book. Videos and slides may be accessed for use in virtual settings or as overheads for in-person groups.
We encourage you to skip around and find the topics, questions, and exercises that will best meet your needs now. To that end, we have referenced useful other chapters to pair with each chapter, along with additional resources to go more in-depth. If such resources are useful to you, please share with your group or include as part of the discussion, but if not, it’s fine to skip what doesn’t work for your group.
Needless to say, none of the assessments or exercises are meant to measure the group’s understanding of the book. Rather, they are there to invoke new and different ways of thinking about big changes your organization might be facing.
As a leader, you can help your group be most effective when you help them focus on what we can do rather than what we cannot.
As has been clearly highlighted by the current Covid-19 crisis, the level of uncertainty, volatility, and complexity in the world has been increasing for the last few decades. Driven by demographics, geo-politics, and most importantly, technology changes, businesses today must adapt and change at an accelerating pace.
The need to adapt is nothing new. After all, Benjamin Franklin is quoted as saying “when you are finished changing, you are finished.” What is new is how often we need to change, the pace at which we need to do it, and the complexity and volatility of the context within which we are operating. Internal change in organizations is not keeping pace with the external change and volatility, resulting in a growing gap between what is needed and what businesses are typically able to create.
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There is an emerging science of change, and insights from this emerging science have been applied by a few forward-looking organizations to rapidly and successfully change how they operate, innovate, and adopt new technologies.
There is no magical sauce or impossible-to-replicate situation in these stories of success. People everywhere can be guided, facilitated, educated, and motivated to adopt new ways of thinking and working; to actually change their actions, resulting in sometimes astonishing business or mission impact. The emerging science has three major root systems. One involves the study of “human nature” and our resistance to – or capacity to – change. A second involves the study of the modern organization and its limitations. The third is the actual study of organizational change: barriers and accelerators.
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Strategy and strategic planning have been a critical part of the business world since the 1960s. Strategy is essentially a mechanism for creating change within an organization, but as it is typically practiced, it is struggling to continue to do so in today’s context. Strategy often inadvertently ignites too much Survive and too little Thrive. It is frequently too siloed and bureaucratic. It employs too small and homogeneous a group of drivers. It is the epitome of an entirely analytical exercise that does not inspire employees to want to get involved. It too often focuses on crises or problems and not on opportunities. Most of all, it is very much a management activity, not a leadership-centric one.
Strategy that delivers results is framed around a compelling, inspiring opportunity that has the potential to excite the organization and spark Thrive. In this approach to strategy, senior leaders solicit input from across the organization is not just executing the strategy, but also in formulating it. The strategy is viewed as dynamic and agile, able to respond to changes in the external or internal context. It is not developed on artificial timetables like calendar years or strategy retreats but rather in response to opportunities or threats. When strategy is approached this way, organizations are better able to engage employees at all levels to drive results such as increased sales and stock price, industry-leading employee engagement scores, and drastically reduced involuntary turnover.
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Perhaps more than any other single force, the digital revolution is changing the world in ways that are creating threats and opportunities for organizations everywhere. And in response, digital transformation – as an organizational change initiative to minimize threats and maximize the chances of gaining opportunity – is to some degree going on all around us at a pace that is causing us to re-evaluate our entire notion of speed and volatility.
Companies that have been successful at leading truly transformational digital efforts involve diverse masses, not just digital elites. They focus on the business opportunities enabled by technology, not just the technology implementation. They integrate the transformation with the business priorities, rather than treating the digital transformation as a siloed initiative. And they recognize and address the fear and anxiety precipitated by the transformation, which helps accelerate adoption (and therefore, optimization) of new digital solutions.
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Restructuring, which is generally reactive (and is almost always accompanied by a workforce reduction), can, in the right circumstances, be a useful and even necessary methodology for producing change. However, all too often the Survive response triggered by restructuring efforts leads to a loss in productivity, innovation, and trust, all of which take a long time to recover – time that enterprises can no longer afford.
An event that’s as disruptive as restructuring will likely produce some anxiety, but the intensity can be mitigated by following an approach grounded in an understanding of human nature – an approach that starts with communicating broadly the reason behind, and benefits of, the restructuring. This vision cannot be only of a smaller or more cost-effective organization. It has to be of a thriving enterprise that is able to achieve previously impossible things. Contrary to the prevailing belief, engaging employees early around this vision can help calm Survive by helping them understand what is, and is not, changing; empowering them to have a say in how, if not what, changes are being implemented; and creating platforms for open, honest discussion.
Restructuring evokes very strong emotions, and all too often those in charge of the decision-making fail to account for these emotions. One way to start to understand these emotions is through simulated case studies.
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There is a growing interest in cultural change as businesses increasingly realize the influence of corporate culture on performance. Most businesses, however, struggle to mold and evolve their culture to any meaningful degree. The formation and evolution of human and organizational culture operates similarly to genetic evolution. The random mutation that starts the sequence of change in our genome is mimicked in firms with either a deliberate or accidental change in behaviors. When this action results in better performance, a time-consuming dynamic begins which in turn can lead to a new culture.
This is different from how most people try to create culture change. Organizations typically start by deciding what the culture is or should be, and then communicate this (top-down) to managers, and then to all employees. This approach starts with telling people how to behave, and (not surprisingly) produces more glossy posters than real change. To successfully shape culture, we have to invert our thinking about how culture changes. It starts with new actions, which deliver better results, leading to broad imitation and new habits, which finally results in a new, emerging culture that then produces even more results.
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M&A activity has clearly been increasing over the last few decades. What is less clear is how effective mergers and acquisitions have been at creating additional value. Research suggest that half of M&A transactions do not achieve the “synergies” that justified the deals in the first place. Sometimes the problem, in retrospect, was poorly analyzed deals, but most often the challenge is in integration, and specifically in cultural integration. This is evidenced in many high-profile mergers like Daimler and Chrysler, or Nextel and Sprint, and, on a smaller scale, Nest and Dropcam.
These challenges can be avoided by focusing on cultural integration from the start – forming a vision for what new opportunities the merged companies will be able to take advantage of; creating integration teams that can both address Survive-inducing barriers and innovate to spark Thrive; and engineering opportunities for employees all across the two organizations to collaborate and celebrate successes.
Download a summary of common M&A success factors and pitfalls.
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Agile methodologies have become increasingly popular even outside their original realm of software development, and it is easy to see why – in a more rapidly changing world, you need more agility. Implementing Agile is not the same as becoming agile. The fundamental problem is that many of the Agile principles are not consistent with the design of modern organizations, making sustainable and scaled Agile impossible within this organizational form.
Organizations that have been successful at becoming truly agile do not operate solely with the traditional hierarchy-driven management systems. They operate within a dual operating system – one that augments the formal hierarchy with a loosely knit network. This leadership network tends to activate Thrive and drives innovation, speed, adaptability, and change. The hierarchy connects more with the Survive Channel and drives efficiency, problem-solving, reliability, and stability. With a dual system in the culture, you end up with an organization that allows both Survive and Thrive to do what they were designed to do, without overheating or going to sleep. This creates a context within which Agile principles can actually drive the outcomes they were designed to achieve.
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Many of the lessons from organizational change can be applied to an even broader need for change – our ability, as humans, to collectively face perils and take advantage of opportunities. Fighting diseases, eliminating poverty, climate change, political movements — these all require challenging the status quo and mobilizing significant support from a diverse groundswell of individuals and organizations.
We tend to view these efforts as social causes that have little in common with corporate strategy exercises, restructurings, and mergers. While there are some differences in the details, these causes face some of the same challenges as corporate change and can benefit from some of the same solutions (and vice versa). Ultimately, it is all about our ability to lead change in a complex and increasingly changing world, to survive and thrive despite the multitude of barriers. At some level, the dynamics of producing meaningful change – the problems and solutions – are always the same because human nature is human nature, modern organizations are modern organizations, and the world really is becoming more and more interconnected with an unprecedented rate of change.
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Reflecting on the stories of disappointment and success that organizations are having in accelerating needed change using various methodologies (including the most common ones described in this book), no single lesson comes across as clearly as one related to leadership — specifically, the need for more from more people. Leadership has begun undergoing a revolution in what it means to lead, but even more so in who and how many people need to provide it.
Leadership as a behavior, not a position, and practiced across all levels of the organization, has the capacity to provide the speed of information gathering, decision-making, and action required to meet the change challenge of today. At its core, leadership is about activating the Thrive Channel in yourself and others.
The gap between the speed and agility required from organizations – and what most are currently capable of – has grown to a point where some fundamental changes will have to occur. We will probably see the modern organization evolve more than it has since it was created, leading to more innovation and engagement. We will see more people not in “leadership positions” providing leadership in new ways. We will undoubtedly see more individuals, groups, and organizations that are able to appropriately activate Survive and Thrive produce astonishing results.
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Beyond single organizations, our collective capacity and ability as a global village to deal with rapid, complex change will certainly be tested in the coming decades. Whether combating a changing climate, resolving the disruption of labor markets from changing technology and artificial intelligence, navigating financial crises, or rethinking how we work and live in the face of global pandemics and other public health threats, how we come to grips with even more change will have consequences that are very hard to conceive.
While the exact changes in the future are hard to predict, what is increasingly clear is that the “new normal” will be the same as the “old normal” in one very important way – a continued need for greater adaptability and agility. The trend of increasing uncertainty and more rapid pace is unlikely to change anytime soon.
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