Leadership Vision, planning, budgeting

1 page, around 300 wordshttp://www.youtube.com/watch?v=lCzxL-oC1RURead in The Heart of Change ,and the video, Step 3 “Get the Vision Right”One reason the smart people create no or poor direction for change is because they have been taught “charting the future” means planning and budgeting. Truth is, when large-scale change, the best planning exercise is never sufficient. Something very different is essential.How did vision play a more important role in each of the stories, than did planning and budgeting? Compare your ideas with the members of your assigned discussion group
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Advance praise from the field
The Heart of Change
?A fantastic piece of work.?
?Carl Frattini, Business Manager, Electric Systems, United
Illuminating Company, Shelton, CT
?A powerful message, communicated with great effectiveness.?
?Ho-il Kim, Vice President and General Counsel, Cabot
Corporation, Boston, MA
?A new message, a rare case where a book offers something that has
not been said before.?
?Alan Frohman, Founder and Executive Partner, Lexington
Leadership Partners, Lexington, MA
?By and large, there is no lack of analytics, decision trees, financial
models, process maps, and other forms of logical intercourse within
corporate America. Our days are saturated with rational, left-brain
thought patterns. This book does an excellent job of helping us where
we need it most?on the emotional or passionate side of the equation
for driving change.?
?Gjon Nivica Jr., Vice President and General Counsel, Engines &
Systems, Honeywell International, Inc., Phoenix, AZ
?A lovely book. The use of stories makes [the authors?] ideas about the
change process so real and so tangible.?
?Scott Jamieson, President, The Care of Trees, Wheeling, IL
?The presentation is most compelling. The emotional content, the
stories with heart, will win over even the most skeptical reader.?
?Bo Thomas, Company Leader and Owner, The Thomas
Consulting Group, Little Rock, AR
2
?The heart-emotions theme blends effectively with the otherwise hard
mechanics of some of the eight steps of leading change. The stories
provide strong examples of the concepts and best practices. The ?What
Works? and ?What Does Not Work? segments throughout the book
summarize each section well. The overall results are excellent.?
?Robert Bender, Senior Operations Coordinator, Northrop
Grumman, Newport News, VA
?Entertaining, highly readable, and very useful.?
?Peter Wood, State Manager, Walter Construction Group Ltd.,
Brisbane, Australia
?The illustrations, metaphors, and analogies provide mental pictures
that clarify the concepts. Using the right-brain and left-brain approach,
the book assists readers to understand both intellectually and
emotionally. I am left feeling that if I become stuck in the change
process, I can refer to a specific chapter and reread the conceptual
information as well as the illustrative stories. Overall, this strikes me as
a sort of right-brain field manual for implementing Kotter?s left-brain
Leading Change.?
?Jim Williams, High School Principal, Paxon School for
Advanced Studies, Jacksonville, FL
?A joy to read and to learn from.?
?Sidharth Birla, Chairman, Xpro India, Limited, New Delhi,
India
?The Heart of Change is extremely well done. It has all of the elements
necessary to be a highly useful tool for those who wish to make
change happen.?
?Paul Daulerio, President, Founder, and CEO, Organization Plus,
Inc., Weston, CT
?It?s a great book. I have already successfully used the storytelling
approach right in the middle of a major restructuring when people
3
were asking ?Remind me again why we are doing this???
?David Bening, VP and General Manager, General Polymers,
Ashland Distribution Co., Dublin, OH
?More pragmatic than other change books. It offers clear advice. I
have already made it required reading for my direct reports.?
?Dan Sajkowski, Optimization Manager, BP Amoco PLC,
Whiting, NH
?The individual case histories contain many pragmatic suggestions that
can be readily applied to a reader?s organization. For the actionoriented manager, it?s excellent reading.?
?Doug Reid, Senior Vice President, Human Resources, PanAm
Satellite, Wilton, CT
?The concept is brilliant. I found myself highlighting all kinds of ideas
that I can put to use in my job now.?
?Mary Thomas, Program Manager, U.S. Army, Alexandria, VA
?The material has broad relevance?to individual contributors as well
as managers and executives. The benefits to all come quickly in what
is a very easy read.?
?Charles Doucot, General Manager, Technical Computing,
Hewlett-Packard Co., Burlington, MA
?It does not matter whether you are the one in charge, an active agent,
or if you consider yourself a passive sufferer of change in your
organization. In every case, the book reflects the reality you are living,
and enables you to gain some control over it and better manage your
part.?
?Susanna Martin, General Manager, L?Alianca, Barcelona, Spain
?I hate business books. I usually cannot make it past the first twenty
pages. I read to the end of The Heart of Change with great pleasure.
It?s the ultimate study of effective change management and
4
leadership.?
?Jean-Rene Gougelet, CEO, Mikasa, Inc., Secaucus, NJ
?An excellent book on a topic that is so important in today?s business
climate.?
?David Walsh, Vice President of Classified Services, Chicago
Tribune, Chicago, IL
?A very enjoyable book.?
?Jeff Kishel, Vice President, MWH Americas, Inc., Sacramento,
CA
?Powerful and very useful.?
?John Strauss, CEO, Ocean Design, Inc., Ormand Beach, FL
?Outstanding book.?
?Ben Anderson-Ray, Private Investor and Consultant, Sunrise
Medical, Inc., Rancho Santa Fe, CA
?Inspiring.?
?Lee Smedley, Principal, Smedley Consulting, Shoemakersville,
PA
5
THE HEART OF CHANGE
6
THE HEART OF CHANGE
Real-Life Stories of How People Change Their
Organizations
JOHN P. KOTTER
DAN S. COHEN
HARVARD BUSINESS REVIEW PRESS
Boston, Massachusetts
7
Copyright 2002 John P. Kotter and Deloitte Consulting LLC
All rights reserved
No part of this publication may be reproduced, stored in or introduced into a
retrieval system, or transmitted, in any form, or by any means (electronic,
mechanical, photocopying, recording, or otherwise), without the prior permission
of the publisher. Requests for permission should be directed to
permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business
School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
The authors are in no way affiliated with Heart of Change; Change of Heart
Associates, of Baldwinsville, New York.
Library of Congress Cataloging-in-Publication Data
Kotter, John P., 1947?
The heart of change : real-life stories of how people change their organizations /
John P. Kotter, Dan S. Cohen.
p. cm.
Originally published in 2002.
Includes index.
ISBN 978-1-4221-8733-3 (alk. paper)
1. Organizational change. I. Cohen, Dan S. II. Title.
HD58.8.K645 2012
658.4’06?dc23
2012030715
e-ISBN 978-1-4221-8733-3
8
To Nancy and Ronnie
who have been at the heart
of our changes
9
Contents
Preface
Acknowledgments
Introduction
The Heart of Change
Why people succeed and why they fail at large scale-change. The
eight-step path to success. The primary challenge at each stage in the
process. How people meet the challenge. The critical distinction
between see-feel-change and analysis-think-change.
Step 1
Increase Urgency
Raising a feeling of urgency so that people start telling each other ?we
must do something? about the problems and opportunities. Reducing
the complacency, fear, and anger that prevent change from starting.
Step 2
Build the Guiding Team
Helping pull together the right group of people with the right
characteristics and sufficient power to drive the change effort. Helping
them to behave with trust and emotional commitment to one another.
Step 3
Get the Vision Right
Facilitating the movement beyond traditional analytical and financial
plans and budgets. Creating the right compelling vision to direct the
effort. Helping the guiding team develop bold strategies for making
bold visions a reality.
Step 4
Communicate for Buy-In
Sending clear, credible, and heartfelt messages about the direction of
change. Establishing genuine gut-level buy-in that shows up in how
10
people act. Using words, deeds, and new technologies to unclog
communication channels and overcome confusion and distrust.
Step 5
Empower Action
Removing barriers that block those who have genuinely embraced the
vision and strategies. Taking away sufficient obstacles in their
organizations and in their hearts so that they behave differently.
Step 6
Create Short-Term Wins
Generating sufficient wins fast enough to diffuse cynicism, pessimism,
and skepticism. Building momentum. Making sure successes are
visible, unambiguous, and speak to what people deeply care about.
Step 7
Don?t Let Up
Helping people create wave after wave of change until the vision is a
reality. Not allowing urgency to sag. Not ducking the more difficult
parts of the transformation, especially the bigger emotional barriers.
Eliminating needless work so you don?t exhaust yourself along the
way.
Step 8
Make Change Stick
Ensuring that people continue to act in new ways, despite the pull of
tradition, by rooting behavior in reshaped organizational culture. Using
the employee orientation process, the promotions process, and the
power of emotion to enhance new group norms and shared values.
Conclusion
We See, We Feel, We Change
Feeling and thinking. The need for more than a few heroes in a
turbulent world.
Story Index
About the Authors
11
Preface
Six years ago I wrote a book entitled Leading Change. It looked at
what people actually did to transform their organizations to make them
winners in an increasingly turbulent world. By transform, I mean the
adoption of new technologies, major strategic shifts, process
reengineering, mergers and acquisitions, restructurings into different
sorts of business units, attempts to significantly improve innovation,
and cultural change. Examining close to 100 cases, I found that most
people did not handle large-scale change well, that they made
predictable mistakes, and that they made these mistakes mostly
because they had little exposure to highly successful transformations.
In a world of increasing turbulence, including unpredictable and
terrifying change, the consequences of these errors are very disturbing.
The book exposed people to successful change and described an eightstep process used by winning enterprises.
Leading Change was a relatively short 200 pages both because I
think that short and to the point is good and because that?s all I had to
say at the time. Many interesting questions were left unanswered,
especially about how people more specifically achieved what was
described in that book. These questions were very much on my mind
when I received an invitation from Deloitte Consulting to work on a
follow-up project. They offered to do massive interviewing to get at
the next set of key issues and to collect stories that could help people
more deeply understand the eight-step formula. That sounded good to
me. I accepted, and the product of the collaboration is this book.
The Deloitte team, headed by Dan Cohen, interviewed over 200
people in more than ninety U.S., European, Australian, and South
African organizations. Some of the interviewees were recontacted
three or four times as we probed for more and more information. We
eventually focused on eighty stories, all of which were cleared with
their providers for accuracy. The most instructive thirty-four of those
stories are included in this book.
Leading Change describes the eight steps people follow to produce
12
new ways of operating. In The Heart of Change, we dig into the core
problem people face in all of those steps, and how to successfully deal
with that problem. Our main finding, put simply, is that the central
issue is never strategy, structure, culture, or systems. All those
elements, and others, are important. But the core of the matter is
always about changing the behavior of people, and behavior change
happens in highly successful situations mostly by speaking to people?s
feelings. This is true even in organizations that are very focused on
analysis and quantitative measurement, even among people who think
of themselves as smart in an M.B.A. sense. In highly successful change
efforts, people find ways to help others see the problems or solutions
in ways that influence emotions, not just thought. Feelings then alter
behavior sufficiently to overcome all the many barriers to sensible
large-scale change. Conversely, in less successful cases, this seeingfeeling-changing pattern is found less often, if at all.
During my lifetime, the emphasis in books and formal educational
settings has been overwhelmingly geared toward analysis and thought.
Feelings were seen as ?soft? and talked about in a very fuzzy manner.
More often than not, emotions were seen as a distraction (hence,
?Don?t be so emotional!?). Although very recently this has begun to
change, I can?t remember a time when I heard a concrete, nonmystical
discussion of the sort written here about how change leaders used
gloves, videocameras, airplanes, office design, new employee
orientation, stories, and screen savers to influence feelings and change
behavior.
We have structured the book around the eight steps because this is
how people experience the process. There is a flow in a successful
change effort, and the chapters follow that flow. Throughout, we have
tried to employ the book?s basic insight as much as possible. Yes, we
analyze, but we show the issues with real-life stories told from the
point of view of real people. And these people are named?real names
except in a few disguised cases.
?John Kotter
Cambridge, Massachusetts
13
Acknowledgments
A number of individuals were instrumental in making this book a
reality. Our sincere thanks to Isla Beaumont and Richard Skippon for
the many hours spent helping us identify companies, conduct
interviews, write stories, and think about the implications of those
stories. Dustyn Bunker, Stefan Lauber, Judy Le, and Ken Love also
helped with the interviews and stories?our hats off to all of them.
Special thanks must go to Deloitte Consulting?s Doug McCracken,
Stephen Sprinkle, Susan Gretchko, and Gerry Pulvermacher who gave
their unyielding time and support to complete the project. A number of
Deloitte Consulting principals took the time to assist us in securing
interviews. These individuals include John Fox, Doug Lattner, Dave
Fornari, John McCue, Andy Konigsberg, Lee Dittmar, Rick Greene,
Todd Laviere, Jim MacLachlan, Pete Giulioni, Deon Crafford, Mike
McFaul, Mitch Shack, Tom Captain, Jim Bragg, Mike McLaughlin, Jim
Haines, Dan Gruber, Jack Ringquist, Brian Lee, Steve Dmetruk, Derek
Brown, Gary Coleman, John Flynn, John Harrison, John Reeve, Mark
Gardner, Leon Darga, Willie Beshire, Tom Van der Geest, Peter Gertler,
Kevin Gromley, Don Decamara, Carol Lindstrom, Ed Eshbach, Gary
Cunningham, Rich Sterbanz, Christina Dorfhuber, Tom Maloney,
Marlees Van der Starre, Tricia Bay, Steve Baldwin, Randy Martin,
Andrew Gallow, Tony Gerth, Mike Goldberg, Mike LaPorta, and Chris
Hooper.
Nancy Dearman, Spencer Johnson, and Jeff Kehoe provided a very
special sort of help with the manuscript itself. In addition, dozens of
people were kind enough to review drafts of the book. Our thanks to
all.
?John Kotter
Dan Cohen
14
Introduction
The Heart of Change
The single most important message in this book is very
simple. People change what they do less because they are
given analysis that shifts their thinking than because they
are shown a truth that influences their feelings. This is
especially so in large-scale organizational change, where
you are dealing with new technologies, mergers and
acquisitions, restructurings, new strategies, cultural
transformation, globalization, and e-business?whether in
an entire organization, an office, a department, or a work
group. In an age of turbulence, when you handle this reality
well, you win. Handle it poorly, and it can drive you crazy,
cost a great deal of money, and cause a lot of pain.
The lessons here come from two sets of interviews, the first
completed seven years ago, the second within the last two years. About
400 people from 130 organizations answered our questions. We found,
in brief, that
? Highly successful organizations know how to overcome antibodies that
reject anything new. They know how to grab opportunities and avoid hazards.
They see that bigger leaps are increasingly associated with winning big. They
see that continuous gradual improvement, by itself, is no longer enough.
? Successful large-scale change is a complex affair that happens in eight
stages. The flow is this: push urgency up, put together a guiding team, create
the vision and strategies, effectively communicate the vision and strategies,
remove barriers to action, accomplish short-term wins, keep pushing for wave
after wave of change until the work is done, and, finally, create a new culture
to make new behavior stick.
? The central challenge in all eight stages is changing people?s behavior. The
central challenge is not strategy, not systems, not culture. These elements and
many others can be very important, but the core problem without question is
behavior?what people do, and the need for significant shifts in what people
15
do.
? Changing behavior is less a matter of giving people analysis to influence
their thoughts than helping them to see a truth to influence their feelings. Both
thinking and feeling are essential, and both are found in successful
organizations, but the heart of change is in the emotions. The flow of see-feelchange is more powerful than that of analysis-think-change. These distinctions
between seeing and analyzing, between feeling and thinking, are critical
because, for the most part, we use the latter much more frequently,
competently, and comfortably than the former.
When we are frustrated, we sometimes try to convince ourselves
there is a decreasing need for large-scale change. But powerful and
unceasing forces are driving the turbulence. When frustrated, we
sometimes think that problems are inevitable and out of our control.
Yet some people handle large-scale change remarkably well. We can all
learn from these people. CEOs can learn. First-line supervisors can
learn. Nearly anyone caught up in a big change can learn. That?s the
point of this book.
The Eight Stages of Successful Large-Scale Change
To understand why some organizations are leaping into the future
more successfully than others, you need first to see the flow of
effective large-scale change efforts. In almost all cases, there is a flow,
a set of eight steps that few people handle well.
STEP 1
Whether at the top of a large private enterprise or in small groups at
the bottom of a nonprofit, those who are most successful at significant
change begin their work by creating a sense of urgency among relevant
people. In smaller organizations, the ?relevant? are more likely to
number 100 than 5, in larger organizations 1,000 rather than 50. The
less successful change leaders aim at 5 or 50 or 0, allowing what is
common nearly everywhere?too much complacency, fear, or anger,
all three of which can undermine change. A sense of urgency,
sometimes developed by very creative means, gets people off the
couch, out of a bunker, and ready to move.
STEP 2
16
With urgency turned up, the more successful change agents pull
together a guiding team with the credibility, skills, connections,
reputations, and formal authority required to provide change
leadership. This group learns to operate as do all good teams, with
trust and emotional commitment. The less successful rely on a single
person or no one, weak task forces and committees, or complex
governance structures, all without the stature and skills and power to
do the job. The landscape is littered with task forces ill equipped to
produce needed change.
STEP 3
In the best cases, the guiding team creates sensible, clear, simple,
uplifting visions and sets of strategies. In the less successful cases,
there are only detailed plans and budgets that, although necessary, are
insufficient, or a vision that is not very sensible in light of what is
happening in the world …
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