HE TESTS OF A LEADER
Why Transformation Efforts Fail
Editor's Note: Guiding change may be the ultimate test of a leader -- no business survives over the long term if it can't
reinvent itself. But, human nature being what it is, fundamental change is often resisted mightily by the people it most
affects: those in the trenches of the business. Thus, leading change is both absolutely essential and incredibly
Perhaps nobody understands the anatomy of organizational change better than retired Harvard Business School
professor John P. Kotter. This article, originally published in the spring of 1995, previewed Kotter's 1996 book Leading
Change. It outlines eight critical success factors -- from establishing a sense of extraordinary urgency, to creating
short-term wins, to changing the culture ("the way we do things around here" ). It will feel familiar when you read it, in
part because Kotter's vocabulary has entered the lexicon and in part because it contains the kind of home truths that
we recognize, immediately, as if we'd always known them. A decade later, his work on leading change remains
Leaders who successfully transform businesses do eight things right (and they do them in the right order).
OVER THE PAST DECADE, I have watched more than 100 companies try to remake themselves into significantly
better competitors. They have included large organizations (Ford) and small ones (Landmark Communications),
companies based in the United States (General Motors) and elsewhere (British Airways), corporations that were on
their knees (Eastern Airlines), and companies that were earning good money (Bristol-Myers Squibb). These efforts
have gone under many banners: total quality management, reengineering, rightsizing, restructuring, cultural change,
and turnaround. But, in almost every case, the basic goal has been the same: to make fundamental changes in how
business is conducted in order to help cope with a new, more challenging market environment.
A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall
somewhere in between, with a distinct tilt toward the lower end of the scale. The lessons that can be drawn are
interesting and will probably be relevant to even more organizations in the increasingly competitive business
environment of the coming decade.