Making Change Happen: An Interview with John Kotter

from the November/December 2002 issue of Supply Chain Management Review

Staff -- Supply Chain Management Review, 11/1/2002

John P. Kotter has been an advocate and chronicler of business change ever since he joined the Harvard Business School faculty in 1972. Since then, he's authored more than 20 books, including Leading Change, the bestseller named management book of the year in 1996. His articles in Harvard Business Review alone have sold more than a million and a half copies. And Business Week rated Kotter the No. 1 "leadership guru" in America, based on a survey the magazine conducted among more than 500 enterprises.

Supply Chain Management Review Editor Francis J. Quinn interviewed Kotter recently in Cambridge, Mass.

Q: Why is successful change management so important at this particular time?
A: How well companies manage change is important at any point in time. Reflecting on this over a period of 30 years, I've found that the rate of change simply keeps going up. And it hasn't been a step function. It's not as if, all of a sudden in 1997, change spiked because of Factor X. Or, in 2001 we saw a major business change because of Factor Y. Instead, in a jagged way, it's just been going up, and up, and up for all kinds of fundamental macroeconomic and technical reasons. There is no evidence that this will do anything but continue. Companies will always have to deal with change.

Looking at some of the major drivers of change today, we have globalization of the economy, which promises only to continue. The same holds true for technology, another major driver. And even if one technology sector collapses, another will take its place. Look at what is happening in biotech these days. So even though you will see slowdowns in various sectors and in different regions, there is a relentless march forward that creates a more interdependent world—and more change. Even the littlest event in one part of the economy creates bubbles of change in another. The most visible event in the past year, of course, was on the sociopolitical front. The horrors of Sept. 11 will continue to produce more and more bubbles of change that we need to figure out how to cope with. So my answer to the question is that the pace of change keeps increasing because of some fundamental factors—and it's going to continue this way. How skilled we are at handling that becomes all-important. And people who don't "get it" increasingly will find themselves in trouble.

Q: When our readers launch a supply chain initiative they often run up against certain well-entrenched functional silos within their organizations. How do you overcome a silo mentality and start making real progress toward change?
A: First off, you need to recognize that where change has to cut across these kinds of silos in an organization, you're dealing with a very tough challenge. On a scale of 1 to 100 in such situations, most of us are at the 25 level. And when you're at 25, it's exasperating! You start to throw up your hands and wonder if you'll get beyond that.

But if you can get up to the 75 level, say, you'll start to notice the difference. My book includes a story about a company that made that kind of progress. It has to do with the purchasing of gloves in a multidivisional organization. (See the sidebar for an excerpt of the glove story.) The individual leading this initiative was dealing across very independent divisions in this company. And here he is, a corporate guy, who probably isn't looked at with a lot of warmth, who gets the ball rolling. This individual got the different managers to look beyond their individual "silos" and see the importance of working toward change in a specific supply management activity. He used a compelling visual object—over 400 gloves stacked on a boardroom table—that people could actually see, touch, and feel. This is one important illustration in a whole set of ideas that we talk about to help managers break down the silos and take on those really tough change problems.

Q: Is that 25 level typically the first big hurdle companies need to clear?
A: Yes, I think it's typical and it mostly relates to a lack of experience and skills in producing meaningful change. No doubt many people reading this are frustrated because they see a problem, and they have been trying to work on it. And the problem isn't some trivial thing, either. It requires some significant change, usually involving a number of different people, quite possibly in different silos, who are just as frustrated. Usually, the problem is not impossible to solve. It is just that most of us haven't had that much practice in leading change, we don't have that much insight into the problem, we haven't had many stories that show us what is possible.

Q: Many change initiatives in the supply chain space necessarily involve external partners. It's tough enough getting your own organization to change. How do you get people on the outside to do so?
A:I really think it's the same process. It has nothing to do with inside/outside. It's getting enough people on your side and on their side to feel some sense of urgency that we ought to do something, that we both have to overcome this complacent attitude of, "What's the problem? Everything's working fine." Successful change always starts with pulling together a couple of people who are appropriate for driving the initiative—people within your organization and at the partnering company who have insight into the change initiative and a strong sense of urgency. From this informal kind of collaboration, you begin to move down the stages—create urgency, build the team, set the vision, get the idea out to enough people, and so forth. That process is as valid in dealing across the organization as it is inside of it.

Q: How do you get people to become emotionally involved in what might seem to be a relatively unemotional change, such as installing new transportation or procurement software?
A: Education. Education has striven for centuries to build up the rational side of our brain—and there have been good reasons for that. But in the process, we have become more and more convinced that the only way you do things is the analytical way, what I refer to as the "analysis-think-change" approach. You know, give me all the figures, we'll see how they add up, and then we'll do something about it.

We forget that there's a whole other side of the brain that we need to be educated about and that people have feelings about even the most mundane stuff. New software? Oh, no! Some people are scared to death about what that new little system is going to do to them and their jobs. Then there are those who arrogantly think, why the hell do we need this? People have deep feelings about these kinds of things. The challenge is to start maneuvering those feelings in a way that will make successful change happen and help the organization do the right thing. You can do something dramatic and compelling even with the dullest subject if you approach it the right way. Instead of the analysis-think-change approach, you follow a "see-feel-change" process that I talk about in my book. That's exactly what the person in the glove story did.

Q: Can you teach people change management skills or is it something that just has to come from within?
A: I don't know about these skills being taught. Again, successful change management is more than "Get me the data, do the analysis, and here are six reasons why we have to change"—all of which can be taught. It begins with an insight that we have to do something, that we really need to change. Then that insight is shared with others in a compelling way that helps them visualize the problem. This approach helps knock down those emotions that block change and accepts those that propel it forward and make something happen. But it all starts with the fundamental insight.

Q: What about the team aspect of change management? What qualities make an effective team?
A: Ultimately, a good team consists of people who are genuinely willing to work together to solve a problem and bring about change. That means you don't have games going on, you don't have people worrying more about how they can look good than working to solve the problem.

Now, having said that, we all know that it can be tough to build this kind of team. Step 2 (Build the Guiding Team) is a big deal that demands a lot of attention. Yet people sometimes run by that step and it gets them into trouble. All kinds of things affect whether or not the team members will work together well. It helps enormously to have a central person who feels passionate about the problem and has reasonably good relationships with the other team members. He becomes a magnet, in a sense, that pulls all the atoms together.

Don't overlook the mechanical things involved in building a team—they make a big difference in success or failure. Take the very mechanical question of meeting format. How often do you meet and for how long? Is there a clear agenda that is followed? If the meeting structure is flawed, people will start worrying about themselves, not about the problem. Once you start heading in that direction, you're set on a dreadful course. People start playing this game of "How can I show up late for meetings, How can I get out early, and so on?"

Q: Let's say you have an individual on the team—the purchasing manager who has been buying products the same way for 30 years, the transportation manager who's been using the same carriers for all his life—who doesn't want to change. They are obviously frustrating progress. How do you deal with that situation?
A: First off, you have to stop and ask whether these individuals have really got beyond Step 1—that is, do they have the sense of urgency? Because very often it's not a Step 2 problem of effective team building, but rather a Step 1 problem of urgency. People may lack a sense of urgency for any number of reasons. They may believe, for example, that the world is fine, so why are we even talking about this change project in the first place. Or they might complain that we went through the same deal three years ago; it didn't work then, so why should it work now. Or they could just be insecure. Someone who is 60 years old and three or four years from retirement understandably might be insecure over where this whole change thing is headed. Whatever the reason, though, you just cannot afford to have "unurgent" people on the team.

Q: And if they can't or won't develop that sense of urgency?
A: Then you have a decision to make: Do you want successful change, or do you want to let Harry bully everyone into his version of the world. It's pretty straightforward, but it can be difficult. Very often the people not buying into the program have their own power bases in the organization. Very often, too, you will have had a long relationship with these individuals. What great leaders will do is to sit down with Harry and have a straightforward conversation. They will say, "We know how much you have contributed to the company over the years, so let's get that off the table right away. We are talking future here, okay, and we have got this problem. Harry, my friend, you are part of the problem. So, you have to help me figure out how we deal with that because we are going to deal with it."

Q: You talk about time being of the essence in change initiatives. How do you act expeditiously without acting rashly?
A: I always say you have to act with enormous urgency and patience! Now that sounds contradictory. But if you think about it, it really isn't. Change requires a relentless sense of "We've got to keep moving forward." At the same time, the patience part means that things have to be done right. Slipshod work and cutting corners up front will only come back to snap at you in the long run. It's not a trade-off. You can hold both thoughts—urgency and patience—in your head at the same time.

Q: Is change more effective when it's driven from the top or when it percolates up from the bottom?
A:I don't think you can make a generalization about that. Change tends to involve lots of people at lots of levels, and who initiates change at any one time can vary. So, at one point, you might have three or four people at the top of the chain who keep things driving forward. Then a month later, it's these 50 people at the middle who are doing something. Then it's back to the four people at the top, and then it's a small task force nine levels down. So in this sense, change really moves more like a wave as opposed to moving downward or upward.

Q: Where does empowerment fit in the change process? Your view on this seems to differ from the conventional notion.
A: Empowerment means, ultimately, making people more powerful. And one of the ways you make people more powerful is by not requiring them, for example, to move this chair from here to the next room by pushing it through the wall! In other words, you empower people to do something—move a chair, build a new supply chain—by removing the barriers that will keep them from succeeding. When people think of empowerment as just giving people rights, they lose sight of an important fact: If you just give them rights without removing the barriers, they won't succeed.

Here's an example: We've got a new vision for the plant, and it is to operate in teams around equipment areas, as opposed to the conventional way we have done it in the past. Somebody says, "We have got to empower the teams to be able to do this and that." Then management tells the teams what needs to be done, informs them that they are empowered to do the job, and then walks away. Of course, the whole thing collapses after six weeks because these people don't have the skills to do the work in a team environment—there's no support structure around them, no way for them to gain the requisite skills. The issue is less about giving people authority to do something than it is about removing the barriers that prevent them from doing it. And in this case, the main barrier was a lack of skills. These individuals had no team skills because they had been brought up in a different world. The key empowering action here would be for management to give them the right skills so that they could work successfully in the new team environment. That's really how you empower people.

Q: You emphasize the importance of short-term wins in the change process.
A: Short-term wins are a big deal; they build momentum. Plus, they help you get past all the skeptics, all those people who want to resist change. In the book, I also note that not all wins—short term, or otherwise—are equal. The more visible the win, the more it contributes to the change process. The best wins are unambiguous and meaningful, too. They clearly and directly speak to employee issues, concerns, and values—and in doing so, help the change process greatly.

Q: Some of our readers may feel a little insecure about assuming a leadership role in a change-management effort. What can they do to step up to the challenge and better position themselves for success?
A: Well, I can mention a couple of things, which may not necessarily be in the right order of importance. First, if you are frustrated, recognize that you are among millions of people who are similarly frustrated. But don't start drawing the conclusion that you can't do much about this. It's not true. We have lots of cases where people like you have persevered through the early frustration and done something rather dramatic. Second, don't blame yourself. Don't think, "Oh my God, I will never develop this kind of unique skill." In almost every case, the problem is simply a lack of experience— you haven't been through one of these major change initiatives before. You need to learn the basics of successful change management and have your people learn them, too. That's the foundation for success.

Related to that, it doesn't hurt to find people who have gone through similar changes successfully and figure out how to tap into them. This could be someone you meet at your local association meeting or at a business conference. You strike up a conversation about the change project, develop some kind of personal relationship, and start learning from this person. Or it could be someone you hire into the organization who's been successful at implementing change at another company. But the main thing for your readers to remember is that they absolutely can lead a successful large-scale change effort in their organization.

Q: Any final thoughts?
A: Well, I can't believe that supply chain people don't have some awfully important change problems on their hands—changes that if they did well could make a big difference to their companies. Now some of the big strategy guys may not think that the supply chain is at the center of the universe. But they're missing the point. If companies can change their current supply chain systems to something that's truly leading edge, it can mean huge dollars for their companies. And it even goes beyond that. How well you manage that change helps determine how fast or slow you can move to execute a new business strategy, operate in a new country, open new plants. It's a huge deal!By managing change successfully, supply chain managers can really make a tremendous contribution to their company—and they should think that way too.