John Kotter is the Chief Innovation Officer at Kotter International and the author of 15 books about management and change in business. His bestseller "Leading Change," outlined an actionable, 8-step process for implementing successful transformations. In 2001, BusinessWeek magazine rated Kotter the #1 "leadership guru" in America.
Question: Should change in business be incremental or sudden?
John Kotter: Change comes in all forms right now. It comes in little pieces, big pieces, continuous – there’s a lot of that. The big pieces, which is what I know most about, tend to be still episodic. One hits you then another hits you. Although the direction we’re going right now is not only lots of small, but more frequent big changes. And that’s the direction the future is going to be.
Question: Is the rate of change in business increasing?
John Kotter: The rate of change, very clearly is going up, has been for some time. All kinds of statistics will show that. I think the two biggest drivers are technological change and globalization. They produce lots of sub drivers, like competition in industries and the like, and those two are not going to go away. Globalization is going to bring us closer and closer together across nations and technology you can’t stop. So, the amount of change is going to, I think and the rate is just gong to go up and up and up for I don’t know how long.
Question: What is the difference between change and innovation?
John Kotter: Innovation is kind of a sub-piece of change. It’s very difficult to innovate without requiring people to do something different. And whenever you require people to do something different, you’re talking about change. So there are lots of other kinds of change, but innovation is a particularly interesting one right now, especially when you need new ideas, and new ways of doing things to be able to compete, prosper, etc.
Question: What role does urgency play in directing change?
John Kotter: Urgency is unbelievably important when you’re talking about, not little changes, but big changes. Indeed, the pattern that we’ve found through lots and lots of research and where we are, in the case of Kotter International are helping companies with right now, step one is creating a higher sense of urgency among as many people as possible in an organizations. And what that means is not urgency in the sense of, oh my goodness, I want to get this. You know. running around in circles, more meetings, PowerPoint slides. It’s this deter – first of all it’s an intellectual belief that there are great opportunities out there. There are also hazards and we got to do something about that. And it’s this gut level determination that I feel, feel like I’ve got to get up every single day and do something that’ll help us, even if it takes us three years to mobilize people and take advantage of this big opportunity or to make sure we get out of the way of this hazard.
As it turns out, if you don’t have enough people with that frame of mind, it’s like putting up a tall building and you don’t put in the – what is it, the pylons deep enough. They really are the structure that supports everything. That keeps things moving around. That gets people into it in a ‘want to,’ not a ‘have to’ frame of mind.
The number of companies we’ve seen that are good companies that take off again, very often with this mode of, you know, what’s the problem? Six of the smartest guys in the room; what’s the problem? What’s the solution? Now execute. And the level of urgency in the company to want to do anything about that is about 2%. That becomes an anchor on action because those people don’t much help out. And if you can get this sense of real urgency, lots of people wanting to – seeing it, seeing the big opportunity and wanting to jump up every day and do something, even if it’s a little five minutes of something they throw in to the meeting that helps guide that meeting in a way that’s different. Even if it’s role modeling for 10 minutes as they’re going down the hall.
You get enough people doing that and it is unbelievable the energy that starts to go into the system. So sense of urgency is huge and it’s what we find is almost the first step, the first phase, if you will in a large-scale change process.
Question: Is change in a company or department dependent on seeing change somewhere else?
John Kotter: Well, where you see a relationship of one unit, of – stick with me while I call it a unit – being heavily influenced by another unit changing. We see that most often in these inside a company where you have, for example, these two large organizations. They are separate organizations, but one for example, is this big engineering piece and the other is the sales piece. And they operate independently. But as you can imagine, they’re very, very interdependent because ultimately the Engineering comes up with the products that the sales people have to sell. The sales people are out there with their pulse on the market that you need back into the Engineering people, and there’s one case we know right now where the field sales guys are going through a huge change. They’ve figured out their basically using the eight-step method that we’ve found for years now. And what’s going to happen, there’s tension already because as they move, this engineering group is going to have to move with them. And so these guys are beginning to say, wake up and say, “whew! We’re going to have to go through some large scale changes too or the company isn’t going to work.” And they’re more complacent because they’ve been very successful. The thought in their industry is really, really number one engineering group. And so, but these field sales guys are not going to change – not going to slow down. They’re kind of taking leaps and leaps and what is happening, I think, is some of the smart people over in Engineering are kind of watching this and they are now beginning to get this sense of urgency going among people around them and they’re watching how these guys are doing it and eventually, the second group is going to have huge influence, if you will. The first group over the second group so the two can kind of pull together and move along.
The other way that you see change in one organization affecting another is that they’re in, for example, the same industry and there’s enough cross talk across the industry, industry associations, people change jobs across companies, that one company really starts going out front and they do it, not just by doing a little bit better job of selling, or incrementing the products, but they really do it by changing the way they operate.
And they got enough communication and connections between the two companies that the other company will see this pretty quickly. And somebody says, “Hey,” you know, “they’re on to something and if we don’t get on to it pretty quickly, we’re going to be in trouble.” And so we get this, it’s not quite a copying effect, but the second company is smart enough to watch carefully what the first company is doing and they move. So it’s the leader company has a huge impact without ever running, or being the top guys in the second company. You see that too.
Recorded July 26, 2010
Interviewed by Max Miller