Why do organizations need transformational change? To adapt to fast-changing external and internal factors. These might include such trends or events as new players in the competitive landscape, outstanding opportunities created by shifts in the marketplace, or technological advances that a company is in an ideal position to leverage to its advantage.
It takes a hierarchy to run a business day to day. But to respond nimbly in a time of rapid change, it takes a well-organized network of volunteers within the business. Both of these elements are essential to surviving the fast-changing challenges and conditions that are already becoming the "new normal." Get used to the scare quotes, there's a good reason I used them. For most companies in 2023, survival even in the short term may require ongoing and sustained transformational change, including cultural change, to bring the hierarchy and the network into alignment.
In this article I will address one approach to this challenge and how it relates to our work in L&D: Supporting and maintaining the cultural change after the alignment is made. I will provide an overview of the process but will not go very far into the details of the consulting work required for alignment, or the details of the role and function of that well-organized network of volunteers.
The Kotter model of change leadership: The science of change
Alignment of an organizational hierarchy with a network takes guidance from an external resource skilled in change leadership and change management. It does not mean getting rid of the hierarchy. It also does not mean engineering a network based on a "one size fits all" model or a rigid checklist. Guidelines for this type of change are provided in "Accelerate!," an article by Harvard's Professor John Kotter published in Harvard Business Review in 2012, and in the book XLR8, also by Kotter, published in 2014. I recommend reading both of these very carefully as part of your professional business development in 2023, and to aid your understanding of the science of change.
Who is John Kotter?
John Kotter is a business and management thought leader and an entrepreneur, as well as a Harvard professor. His 2012 article "Accelerate!" won the McKinsey award for its practical and groundbreaking approach to business management. His 1996 book Leading Change was named by Time Magazine as one of the 25 most influential business management books ever published. He most recently co-authored Change: How Organizations Achieve Hard-to-Imagine Results in Uncertain and Volatile Times, which explains the science of change and how it can be used to build more agile organizations.
John Kotter founded Kotter International to help managers "become significantly better leaders, successfully transform organizations into truly great enterprises, and build a better world for future generations." It provides consulting and training services in change leadership and change management.
The company is advising Fortune 500 organizations on leadership and organizational strategies to address the rapid progression of change and fears about a recession. Leaders in those companies want to provide their teams with upskilling in order to transform their organizations to thrive in increasingly competitive markets.
John Kotter's articles and books supporting his model are based on extensive research, backed up by years of work with organizations across the spectrum of enterprise that have led to successful changes in results. In December 2022, Kotter launched a new program of six courses to help teams and individuals become Kotter Change Certified.
The Kotter change model
Change management today is critical for L&D to understand. If your organization has implemented Kotter’s model or is considering doing so, success results in a culture change in organizations. That change requires both organic support from networks within the organization, as well as skill maintenance through training and through carefully designed policies and incentives.
What specifically about the Kotter change model is important to understand?
Most organizations today are based on hierarchical models. Hierarchies are wonderful and necessary for efficient functioning. Unfortunately, hierarchies do not handle change well. Networks within organizations can achieve high degrees of self-organization if they have permission from senior leaders and a clear sense of direction to give them a shared purpose.
In times of rapid change, organizations need to have both hierarchies and organic networks. It is not a matter of either one or the other, and it is not a matter of imposing order on the organic networks. A hierarchy is needed in order to run the organization and to maximize efficiency. Networks are needed to change the organization, to support agility, and to make possible fast pivots in response to changes in business conditions including shifting markets, new competitors, and economic uncertainty.
What is needed is an environment that values entrepreneurialism, inclusiveness, and volunteerism. To create those conditions requires the development of networks by jumpstarting a cultural shift.
Benefits and challenges
Making the necessary changes to culture and to the duality of organization structure can help organizations handle change. Successful execution and maintenance of those changes results in competitive advantage.
It is also important to understand the change model that guides these changes, and it is important to understand that the goal of the changes is not to eliminate or replace the hierarchy. It is also not the purpose to implement a kind of leaderless structure in which employees can easily become confused about purpose and process. Badly done, changes can result in more bureaucracy (where the structure is over-engineered), or it can result in a holacracy (where there is no consistent leadership).
The biggest challenge is to leverage complementary strengths of the hierarchy and the network so that the organization achieves more than was thought possible.
Identifying L&D's role
In a recent discussion I had with Rick Western, CEO of Kotter, I learned his views on digital L&D as an important continuing education tool from entry level to the C-suite. He feels that the present day requires a different form of skills-based training than in the past. He calls it a critical need to survive changes in the economic environment.
Notes from the conversation
In the consulting engagement to jump-start the cultural change, the team from Kotter works with a subset of leaders from the hierarchy and from existing network volunteers. This may involve only a small percentage of the employees. Here is a broad overview of the way it works.
Bill Brandon: What is the objective of the Kotter Change Certification Program?
Rick Western: Thinking about people's capacity to lead change, we wanted to be principles-based as opposed to rules- and tools-based because change is happening so quickly now. What we don't want for people faced with change is for them to think, “How do I use this tool that I learned and apply it in this new changed environment?" We want them to understand change so well and so deeply that it's more of a "principle" issue: How to respond to any type of change.
BB: A certification program seems to imply that there is a gap or deficit of some kind in people's skills for dealing with change. Is this something new after the pandemic?
RW: I use the word "apprenticeship" very broadly to be any form of on-the-job coaching. To me, the basic premise of apprenticeship is one that has been fractured by the pandemic, where in many cases people were working from home, at least in part. That doesn't mean they can't get on-the-job training and coaching from their supervisors remotely, but it is much harder and much different. So we see the skills gap widening as a result of the fracture in the basic on-the-job apprenticeship model.
BB: How are you handling certification in hybrid organizations, where there may be employees scattered around the world?
RW: The certification is offered in three different modalities. All six of the courses in the certification are exactly the same. One is online asynchronous, where participants work through the content at their own pace. The second is instructor-led virtually, so participants can be online synchronously and do not have to fly anywhere. An instructor takes them through the program. The third is the old-fashioned, classroom-style, led in-person by a live instructor. This can be done onsite within the organization. We believe these three methods will fully respond to the needs of different organizations and accommodate geographic and time zone challenges.
BB: There is a lot of culture change involved in what is proposed in the certification courses, as well as in Professor Kotter's articles and books. What methods are used in the courses to support the culture change?
RW: In terms of methods, we go through the science of change and talk about balancing the “head” with the “heart.” On an intellectual or “head” level, it's not tough to understand a hard business case for making a change. You also have to appeal to someone's desire to make the personal behavior changes that you're looking for and address them on a personal or “heart” level. In terms of the way we do that in the course, we use case studies and some simulations. These provide learners a scenario and then challenge them with making some decisions. There are no right or wrong answers but based on the decisions made, the interactive nature of the course leads to different outcomes: Alternative A, Alternative B, or Alternative C. We try to take learners through a real-life simulation of being a leader and dealing with a real-life situation.
BB: What kind of metrics are you looking at to know when, to know where, the people and the organization are in the change process?
RW: What we typically do with any organization is we try to use their existing metrics. Instead of coming in and saying, "OK, use employee engagement or net promoter score," we look at the metrics that are important to an organization. We identify the ones that we believe can move the needle on the actual desired change, and then we use those metrics. It's very important to us to use internal measurements that are already recognized as part of the common language of that organization, as opposed to being seen as an outside consultant coming in with a pretty scorecard that really doesn't mean anything to them. That scorecard isn't the way they think about that organization.
BB: What skills would people in a company need in order to sustain the culture change? There are many options for social learning.
RW: I love that question because sustaining ability, to me, is the ultimate key. Anybody can change but if you don't sustain the changes, the benefit is lost. It's sort of like losing weight. I can lose 20 pounds but if I don't sustain the behavior change, I'll gain that back rather quickly. So what leaders need to do is set up an environment where once people make the behavior changes that were desired and the organizational transformation occurs, then people won't slip back to the way they previously behaved. That can be done in several different ways. One, make sure that all your processes and your policies in place are consistent with the new behavior that you want, that you don't have an old policy that remains in place that unknowingly causes people to behave the way they formerly did. Because in effect that's the way they used to be incentivized.
But the other thing is to sustain the change through continuing to identify and celebrate what we call "wins." The constant communication about how and why things are better for all constituencies. Sometimes people get a little lax and they don't sustain the necessary celebrations. It’s important to keep reminding people that the changes that have been put in place have achieved and continue to achieve results that are better for everyone. You need to remind people of that. Almost everybody wants to be on a winning team. Nobody wants to be on a losing team. You need to remind them that the new behaviors that they and their colleagues have taken upon themselves are part of the transformation and are continuing to drive positive results for everybody.