John Kotter on How to Transform Companies
Most attempts at organizational change fail, according to the research of noted author John P. Kotter. Why should this be so? Kotter believes that if the sense of urgency is not high enough at the very beginning of any such project, complacency will win out. His new book, A Sense of Urgency, provides a guide for successful transformation. In this excerpt, Kotter describes the importance of an appeal that goes beyond the intellectual.
I was present recently at a well-known company's annual top management meeting, where two division managers made speeches. Manager No. 1 walked to the podium, asked for the lights to go down, and began his speech. A new, information-rich PowerPoint slide appeared every 30 to 60 seconds. He looked at his notes about a third of the time, the slides another third, and what he could see of the audience in the dim room the final third. He was remarkably articulate.
His speech described the problems that faced the company and, he said, all audience members. It offered a new set of goals and strategies for moving forward and a method for implementation. When the speaker was done, the lights went up and he answered questions for 30 minutes.
The next morning manager No. 2 was noticeably more nervous in his presentation. He set aside his notes and stood beside the podium. Because the lights automatically went down, he was mostly in the dark along with the audience. He made a joke: "Kerry [the CFO] keeps telling us we are all in the dark, and I guess he may be right." Instead of moving behind the podium and into the spotlight, he asked that all the lights be turned up. He then talked for an hour employing few PowerPoint slides.
Manager No. 2 was less articulate than Manager No. 1. He paused at times as if searching for the right words.
In making a case for change much like the first speaker's, he used only a few statistics—about 10% as many numbers as in the first speech, but all of his data were attention-grabbing. For nearly half of the address, he told stories: about his father's company that had gone into bankruptcy, leaving his family in difficult circumstances; about a friend of his who worked at a competing firm and who recently, after a few too many drinks at the clubhouse, disclosed information about his company's very aggressive new strategies; about the speaker's great pride in working for his company when he was a young man, a time when the firm was No. 1 in all its markets; about how he and his wife had talked about early retirement but decided against it because he wanted to retire a winner—which, he said, he damned well planned on doing. He ended and received the longest applause heard at the entire meeting.
Whether either man knew consciously what he was doing, I have no idea. But I do know that what each did, on the same stage, had a very different effect.
Low lights signal to our senses that the workday may be over and it's time for sleep, making it hard for an audience to pay careful attention. When we stand behind a big wooden podium, it can feel as if there's a shield between us and the audience. PowerPoint slides so dense that they cannot be read in the last seven rows can annoy observers and raise irrational worries: Does the speaker not care whether I can see because he thinks I cannot understand the information anyway?
Neurologists say that our brains are programmed much more for stories than for abstract ideas. Tales with a little drama are remembered far longer than any slide crammed with analytics. Personal stories also create a more intimate atmosphere—one that communicates the feeling that no one here intends to take advantage of anyone else. And the use of humor can reduce stress and encourage the audience to feel that the speaker understands them.
We worry about appearing awkward in a presentation. But up to a point, most people seem to feel more comfortable with less-than-perfect speaking abilities. It makes the speaker more human—and more vulnerable, meaning he is less likely to attack our decisions or beliefs.
Our rational minds tell us that none of these issues of presentation should matter. What is important is content: Is this a solid analysis and plan or not? But the best plan may raise little urgency in a company whose very successes have left it so complacent that most people are not looking for, and are not inclined to listen to, a new plan.
Within the company in question, six months after the yearly meeting many people were moving with a new sense of urgency to deal with their considerable challenges. The second man's speech was only one of many actions that undercut a sleepy contentment with the status quo. But it was an important action.
The sequence of events seems to have been as follows: First, an emotionally compelling speech was given at a very important meeting to a very important audience. Then urgency rose among many of those in the meeting, including the speaker's boss. The increased urgency was one factor in helping create a committed team to deal with the challenges. The team worked energetically with others to create a new, sensible vision and strategy, with the first speaker's ideas having a significant effect at that point. The energized team spent hours carefully and cleverly communicating the strategies, visions, and plans with both their minds and their hearts—and onward from there.
Great leaders understand that historical success tends to produce stable and inwardly focused organizations, and these outfits, in turn, reinforce a feeling of contentment with the status quo. Later failures to produce short-term results or to adapt to change can produce a great deal of activity—but this is often unproductive activity driven by anxiety about one's own future (not the organization's future) or by anger at others. In a competitive, fast-moving world, all this can be deadly. And none of it can be fixed by a mind-only strategy.
The most successful "heart-head" approaches fall into four categories.
In the first, people dramatically bring outside reality into groups that are too inwardly focused. They do not just collect data and dump it on individuals or massage valid information into goals and present them on PowerPoint slides, as the first speaker did. Instead, they create emotionally compelling experiences involving other people, information, and even the right kinds of business cases, as the second speaker did.
Second, they behave with true urgency themselves. They do not just say the right words daily, but they make their deeds consistent with their words.
Third, they look for the upside possibilities in crises, but very selectively and with great care. They do not view a crisis as only a threat but also as a potential opportunity to shake up an organization and reduce complacency.
Fourth, they confront the problem of "No-Nos." They do not accept the notion that an organization must put up with people who relentlessly work to kill urgency.
All four tactics can have an effect that is visceral, not merely intellectual, influencing attitudes, thoughts, feelings, hopes, dreams, and behavior. You can transform complacency with the status quo, or the anger and anxiety associated with a perceived mess, into a determination to move and win, now.
Excerpted with permission from Harvard Business Press from A Sense of Urgency by John P. Kotter. Copyright © 2008 John P. Kotter. All Rights Reserved.