Book SummaryLeading Change, by John P. Kotter

1-Page Summary1-Page Book Summary of Leading Change

In Leading Change, John P. Kotter argues that in a fully globalized and ever-evolving economic environment, successful firms are those that can implement long-term change. This enables them to stay competitive in a rapidly shifting market, respond effectively to new threats, and take advantage of new opportunities.

Kotter is a professor at Harvard Business School and has authored or co-authored nearly two dozen books on organizational transformation and corporate culture. As co-founder and chairman of Kotter International, he has worked with Global 5000 corporations, nonprofits, public sector organizations, and utilities to help them develop leadership teams, implement growth plans, increase efficiency, and navigate complex mergers and acquisitions.

Successful organizational change, Kotter argues, depends in large part on the leaders of a company―people who can articulate a vision, inspire belief and confidence in it, and empower mid-level and junior managers to implement it on a tactical level. Still, Kotter cautions, change is a collective effort undertaken by everyone in the company. It is not―and cannot be―the work of a single visionary or guru.

Kotter identifies several key steps for leading successful organizational change:

1. Instill a sense of urgency.
2. Build your change leadership coalition and secure commitment from leaders in your organization.
3. Articulate your vision of...

Leading Change Summary 1. Develop a Sense of Urgency

Kotter writes that the first step along the road to any successful organizational transformation is cultivating a sense of urgency―an understanding that change is desirable, necessary, and a matter of survival. Developing a sense of urgency is critical. Nothing will change in your company if people feel that transformation is unnecessary, pointless, or wasteful.

(Shortform note: In High Performance Habits, Brendon Burchard offers advice on how to spark a sense of urgency—he recommends establishing hard deadlines that have meaningful consequences if they’re not met. Hard deadlines focus people’s minds on what needs to be done, and thus help high-performing organizations and individuals prioritize their time-sensitive tasks.)

No Urgency, No Action

Kotter argues that complacency is the first hurdle any change leader needs to overcome. In a complacent environment, people are in denial about the company's underlying problems and the urgent need for reform.

Similarly, people in a stagnant corporate culture tend to argue that any problems must be someone else’s fault or that the problems...

Leading Change Summary 2. Create Your Coalition and Secure Buy-In

Kotter warns that even after you’ve successfully conveyed a sense of urgency and immediacy, the actual work of changing what your organization does cannot simply be the work of one visionary leader.

For transformation to be successful, impactful, and lasting, change leaders need to secure buy-in from people both inside and outside the organization—middle and junior managers, rank-and-file employees, creditors, customers, and suppliers. Ultimately, writes Kotter, it’s about far more than bringing to life the vision of a single charismatic leader. Instead, it's about building a process and moving an entire organization. You need input and feedback from everyone.

(Shortform note: While a vision alone isn’t enough to effect change, relying on the charisma of one superstar leader can hurt a company in other ways, too. In Silicon Valley, the “cult of the founder”—a sort of reverence for perceived rule-breaking, creative-minded visionaries in the mold of Apple’s Steve Jobs, Microsoft’s Bill Gates, and Facebook’s Mark Zuckerberg—has often led investors to pour money into enterprises with ill-conceived business models and/or incoherent paths to profitability, [based on little...

Leading Change Summary 3. Articulate Your Vision

Kotter writes that articulating your company’s ultimate vision is crucial to the success of your transformation effort.

A vision gives a picture of the company’s future. It sends a signal both internally and externally about the status your company aims to achieve (like “The nation’s most trusted provider of cybersecurity services” or “The epitome of automobile safety”), why it’s important, and why people should believe in it.

Ultimately, a vision connects people toward a singular purpose—orienting and guiding every decision that people make in your company, while aligning all subsidiary goals and initiatives.

An effective vision also helps to define what is and isn’t important. If a project or policy doesn’t meaningfully contribute to the fulfillment of the vision (or actively hinders it), this is a strong signal that it may not be worth doing. Thus, your vision statement can act as a great filtering mechanism, enabling your organization to eliminate work or projects that don’t align—saving time, money, and energy.

Find Your Organization’s Purpose

Tim Ferriss, author of The 4-Hour Workweek,...

Leading Change Summary 4. Sell the Vision

According to Kotter, once you’ve developed a sense of urgency, assembled a credible and empowered coalition to lead the change effort, and articulated a clear vision that can anchor every decision and action taken within the organization, you’re ready to sell the change project to the broader organization.

But often, the sheer complexity and scale of change baffles people and makes them fearful to engage or buy into the effort. Kotter argues that some of this can be attributed to people’s natural resistance to change—they worry that change offers no benefit to them, or that they will be made worse off.

(Shortform note: This ingrained resistance to change is closely related to the cognitive bias known as loss aversion. Loss aversion causes people to prioritize avoiding potential losses more than achieving potential gains, even if those losses and gains are equal. For example, if you receive a windfall of $500, it will probably bring you a certain measure of happiness. But if you then lost that $500, loss aversion would cause you to experience unhappiness far greater than the happiness you felt upon receiving the money. This cognitive bias creates a strong propensity...

Leading Change Summary 5. Remove Roadblocks

Kotter writes that when you’re spearheading an organizational change effort, you’re inevitably going to face obstacles and roadblocks on your way to transforming your organization. As a leader, you’ll need to navigate these carefully, because roadblocks to change can be deeply disempowering and discouraging for those who are trying to guide the organization along a new path.

He notes that barriers to reform often come from a few common sources:

• Bosses and managers standing in the way
• Lack of proper training
• Poor organizational structure

Overcome Resistance From Managers

Kotter writes that junior and middle managers often feel that they will be the “losers” in a reorganizing process. Complicating matters, these managers are often people who have been with the company for a long time and have advantages of seniority, institutional knowledge, popularity, and power that can make them effective at standing in the way of needed change.

For example, a top-performing sales manager who sees herself personally benefiting from the existing way of doing things in her company may be...

Leading Change Summary 6. Set Short-Term Benchmarks

Kotter writes that every multiyear change effort needs to build in short-term or intermediate benchmarks and goals—and that those goals need to be publicly celebrated when they’re met.

He warns that people become disillusioned if they don’t see tangible progress toward long-term goals being acknowledged and celebrated. Tangible progress also helps to blunt the criticism and resistance of change opponents. The foot-draggers will have a harder time making their case and winning others over to their cause if the organization can point to real, measurable progress being made.

(Shortform note: You can break the intermediate goals down further into actionable steps so that employees can see that even these goals are being accomplished piece by piece. Thus, if one of your short-term goals is to add five new people to the sales staff by the end of the quarter, actionable business objectives might include posting the jobs to Indeed, screening candidates, and scheduling interviews by the end of the month. Each of these steps is a visible measure of progress toward the company’s goal.)

Track...

Leading Change Summary 7. Change the Culture

Kotter writes that culture is the set of norms, behaviors, priorities, and shared values that persist within a group or institution over long periods of time and are passed on from generation to generation.

It’s important to understand how cultures are formed and sustained, he argues, because any organizational changes will likely be illusory unless there is a transformation of the broader culture because policy, practice, and process are all ultimately downstream from culture.

If the culture isn’t remade, as soon as the change-leading CEO or coalition leaves the organization, people will naturally revert to the old ways of doing things. Of course, culture is difficult to reshape because it can’t be created solely by managers in a top-down process. It has to develop organically over time by hundreds or thousands of people. In the course of change, this often means that aspects of the old culture need to be eliminated if the vision is to be fulfilled.

For example, if your company has a goal of launching a business-facing product line to complement its consumer products, that might require developing a more formal, traditional corporate culture to present a more staid and...

Leading Change Summary Managing Change in a Complex World

In addition to outlining specific techniques you can use to effectively bring about change, Kotter also examines change from a broader perspective, looking at how and why it’s so important. He notes that because companies are so interdependent on each other and on the wider economy, their ability to evolve is crucial. He notes that this interdependence leads to challenges but also to opportunities, allowing leaders to arise from a wide variety of areas.

Managing Interdependency

Kotter writes that leading change in a complex world is a team sport. It depends more on building effective coalitions, systems, and cultures than it does on any one individual’s talent or experience.

The reason for this is that organizations have become extraordinarily interdependent. Kotter argues that whether your organization is a small business, global corporation, or nonprofit, it is deeply affected by events happening around the world entirely beyond your control.

For example, if you’re a medium-size U.S.-based manufacturer of nails and screws selling primarily to neighborhood hardware stores, your business depends a great deal on the availability of cheap imported steel from China....

Shortform Exercise: Become a Change Leader

Think about how to successfully transform your organization.

Have you ever had to play a role in shaping and directing an organizational change effort? This might include a large organization like a firm, but it could also include a smaller group like a family, a class, or a group of friends. Describe the experience.

Shortform Exercise: Explore Interdependence

Think about how departments and business units interact in your organization.

Would you say that your organization is highly interdependent? Explain why or why not.