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Lead change, don’t just manage it

Book review: Leading Change by John P. Kotter

Leading Change
John P. Kotter
Harvard Business Review Press, 2012

Two decades ago, Harvard professor John Kotter revolutionized how we should think about change, and in the first edition of Leading Change, he laid out an eight-step process for how to transform a business.

Although he mainly targets large organizations, Kotter’s thinking seems equally pertinent on today’s farms, especially with its core recommendations warning us not to give in to complacency, and to drive change by changing the culture first.

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Generally, humans and the organizations we create prefer the status quo. So to make big change we first need to accept that things need to improve. Then leadership needs to create urgency and motivation, as well as the structures that will pull the new vision through an organization.

Kotter could never have predicted the incredible amount of change in the last 20 years, with new technologies, international economic integration and domestic market maturation. Yet he did foresee what they would mean for businesses, ramping up competition and the need for all of us to be constantly improving.

In the preface to the 2012 edition of Leading Change, in fact, he gives that idea the weight of a core belief, saying “A globalized economy is creating both more hazards and more opportunities for everyone, forcing firms to make dramatic improvements not only to compete and prosper but also to survive.”

Just think how globalization has had an impact on the agricultural industry in the last couple of decades. We have seen unprecedented price fluctuations for land and commodities, new disease threats, the constant shifting of trade agreements and political policy, the unbelievable consolidation of buyers and input suppliers, population increases and, more recently, the crazy currency swings.

Kotter says that up until the 1990s most large successful businesses were built on management hierarchy, often with a large middle management component, and they had an inwardly focussed culture of producing more. In these businesses, tradition often trumped change, even when leadership knew that the future didn’t look bright.

Kotter says this engrained the “if it ain’t broke, don’t fix it” mentality, setting companies up for possible failure because they felt they didn’t need to consider any large-scale transformations.

Instead these businesses tended to work on smaller changes in isolated departments, addressing only short-term goals.

But there can be good news for farmers, however, because they’re in a better position to set things right. That’s because, in theory, smaller businesses can adopt and make big changes more easily because they have less bureaucracy and because their leaders tend to be connected to the hands-on work.

“Flatter and leaner structure encourages more acceptance of change,” says Kotter. “Simple structure allows for more teamwork, less ego, less independent silos, and most importantly, more daily communication between employees that’s honest and there’s more trust.”

Still, Kotter’s concept that change must be led and not just be managed rings very true for businesses of any size, including farms. He says the transformations that are successful are 80 per cent due to leadership and only 20 per cent due to management. And they don’t happen overnight.

Kotter then lays out his eight-step approach to making big change. But he also warns that it takes commitment. Even if you work your way through every step, you need to anchor your new approaches into the business culture. Otherwise, the business will revert to its old ways and your efforts will be wasted.

“The hearts and minds of all members of the workforce are needed to cope with the fast-shifting realities of the business climate,” says Kotter.

So he says changing a business needs to be driven by a sensible, inspiring vision that tends to be outwardly focussed, such as improving customer service and satisfaction (quality, new products, delivery, and price). That vision has first to be possible, and also significant enough to motivate people and create the urgency needed for it to be sustained for years. Eventually, the vision becomes part of the very culture in which the company operates.

Yet the change vision must be simple enough that you can articulate it in under five minutes.

To create, sell, and manage change, Kotter says a business leader needs to build a guiding coalition of powerful, smart people who accept the need to change. The leader also needs to guide the formulation and writing out of the new vision, and they need to spread the word, ensuring it considers the impacts on customers, investors, and employees.

Kotter says it takes strong communication to keep everyone on track, and the guiding coalition needs to talk about the vision again and again and again. Print it out, pin it up, write about it, and always talk about it in meetings and while hiring and training.

To keep everyone motivated along the way, there must also be short-term wins. Also when making big changes don’t declare victory too soon, not until the change has become part of the business’s culture. And recognize that even when it becomes “the way we do things around here,” the new vision has to be reinforced.

Kotter says that if it all seems too daunting, you should pause and honestly ask yourself what will happen if you keep on your current path and if you don’t accommodate the trends swirling around your business.

Will you still be in business in 10 years?

John Kotter’s 8 steps to change

  1. Establish a sense of urgency. Identify key trends and what they mean for your business.
  2. Create a guiding coalition of effective, powerful people and advisers who deeply understand the need to change.
  3. Develop a vision and strategy that you can use to align and inspire your team.
  4. Communicate this change vision. People won’t make sacrifices unless they’re dissatisfied with the status quo and think that transformation is possible.
  5. Empower everyone, including employees, for broad-based action. Identify and eliminate obstacles that block the changes.
  6. Generate short-term wins with a six- to 18-month timeframe.
  7. Consolidate gains and produce more change.
  8. Anchor new approaches in the culture. Show your team how their behavioural changes have helped.

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