For many years, I have asked participants in the From Vision to Action Leadership Training to read the book, Leading Change by John Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus at the Harvard Business School and the cofounder of Kotter International. Given Kotter’s eight step model for organizational transformation, first presented back in the mid-nineties, is the national and international gold standard for successful organizational change, it is always important to keep up with his current thinking. Recently, he wrote the lead article for the November 2012 issue of the Harvard Business Review on it’s 90th anniversary called “Accelerate!: How the most innovative companies capitalize on today’s rapid-fire strategic challenges - and still make their numbers. Here is the link: http://hbr.org/2012/11/accelerate/ar/1
The article begins with the following premise: “Although traditional hierarchies and processes - which together form a company’s “operating system” - are optimized for day-to-day business, they can’t handle the challenges of mounting complexity and rapid change.” Therefore, Kotter suggests the development of “a second operating system, devoted to the design and implementation of strategy, that uses an agile networklike structure and a very different set of processes. The new operating system continually assesses the business, the industry, and the organization, and reacts with greater agility, speed, and creativity than the existing one. It complements rather than overburdens the hierarchy, thus freeing the later to do what it’s optimized to do. It actually makes enterprises easier to run and accelerates strategic change.”
According to Kotter in this article, there are three main differences between his original eight-step method for successful large-scale change and the eight “accelerators” for the development of strategy. The first difference is that the eight step method for organizational transformation is sequential while the eight accelerators for the development of strategy are “concurrent and always at work.” The second difference is that the former is “usually driven by a small, powerful core group, whereas the accelerators pull in as many people as possible from throughout the organization to form a volunteer army.” The third difference is that the former is “designed to function within a traditional hierarchy, whereas the accelerators require the flexibility and agility of a network.”
The eight accelerators that create this high degree of strategic fitness are similar in many ways to the eight step model, e.g. “create a sense of urgency around a single big opportunity,” “build and maintain a guiding coalition,” etc. However, this complementary system for strategic development, according to Kotter, is based on the following five key principles, namely “many change agents, not just the usual few appointees”, “a want-to and a get-to not just a have-to-mind-set”, “head and heart, not just head”, “much more leadership, not just more management”, and “two systems, one organization.”
First, while I like the idea of dual operating systems as a way to explain how strategy is developed and communicated, I am not entirely sure that Kotter’s new model is all that new. I have seen numerous organizations over the last 20+ years create this dual operating system model without out calling it something new and different. While Kotter’s new model is very specific in how the strategic development operating system should be created, I think many large and small companies can embrace the idea and then modify it in simple ways to meet their needs.
Second, I do not know if they need to create an entire networklike structure that runs parallel to their traditional hierarchy to formulate and implement strategy. The best companies that I have seen each have a unique system for the on-going development of strategy. However, from my perspective, the critical part to their successful implementation of strategy revolves around the generation of a deep level of clarity, ownership, and understanding of strategy within the entire organization. It is the clarity that makes the strategy effective not simply having an entirely separate structure for the development of strategy.
Third, I also want to note that in the later half of this article Kotter explains that he has only utilized this new method in eight companies, and that it is critical for the strategic development guiding coalition to be in close communication with the more traditional executive management team. Furthermore, according to Kotter, if a company is based on a control-oriented hierarchy, this new model is quite helpful. But, having taught leadership since the eighties and been involved with countless strategic development projects, I find very few companies with control based hierarchies to be successful and strategically agile. Control based methods of working and leading people are typically the main problem for why the company is struggling strategically. From my perspective, if one changes this form of leadership, then many of the problems will fade away related to strategic development and implementation.
Still, I do encourage everyone to read this article as over the years Kotter’s perspectives always generate considerable discussion and introspection throughout the world of business. And who knows, maybe in twenty years it will become the new gold standard for strategic development. Until then, keep reading and learning!