Business 101: Principles of Management

John Kotter's 8-step change model is widely accepted across all industries as an effective model for implementing organizational change. In this lesson, each step of the Kotter model is discussed using Carl's carwash as the contextual example for making lasting change at the carwash.

Reviewing Kotter's 8-Step Model

When attempting to implement transformational change in organizations many managers will turn to the work of John Kotter as a guide. If you recall, John Kotter's change model includes eight steps, including: establish a sense of urgency, create a guiding coalition, develop a vision and strategy, communicate the change vision, empower broad-based action, generate short-term wins, consolidate gains to produce more change and anchor change in the organizational culture. In this lesson, each step of the Kotter model is discussed using Carl's carwash as the contextual example for making lasting change at the carwash.

Applying Kotter's 8-Step Model

Carl is an owner of a local carwash that has struggled to maintain a steady flow of customers in the past months. The reasons for this change range from a poor economy to the recent building of two franchise carwash locations within ten miles of Carl's carwash. Carl knows that if he does not do something quick to change the current status of his carwash, he will soon be out of business.

After much deliberation and brainstorming, Carl has decided to introduce an interior shampooing service to the menu of services the carwash offers. The goal is to generate additional revenue and maintain a competitive advantage over other carwashes in the area. From past experience, Carl understands how important it is to use a change model to guide the process of implementing this new service. He turns to Kotter's eight steps.

Establishing a Sense of Urgency

To establish a sense of urgency Carl holds a meeting with his staff to discuss the current financial situation at the carwash. He informs his employees that they are all on the verge of losing their jobs due to the limited revenue coming into the carwash. Carl assures his employees that closing the doors to the carwash is the last thing he wants to do, but that it is a reality they are all facing. He explains the need for change at the carwash and shows the connection between making changes and creating job security for his employees. Carl's employees recognize their jobs as being in jeopardy and express their commitment to making whatever changes are necessary to secure the longevity of their jobs and the carwash.

Creating the Guiding Coalition

Now that Carl's employees understand the sense of urgency of the change, he must decide who his guiding coalition will be. This step will require Carl to select employees who will help him to see the change through. Carl chooses five employees: Maria to help with the logistics of acquiring the necessary equipment for the shampooing service; Jose and Mark to learn the process of shampooing, and who will be tasked with training other employees on how to perform the shampooing service; Samantha for marketing the new service; and Adam to work on pricing of the new service. These five employees form the guiding coalition who will provide the necessary direction for developing and implementing the new shampooing service at the carwash.

Creating and Communicating a Vision for Change

Carl must now think about how he will present this change to the rest of the employees. Creating a change vision will allow Carl to provide his employees with a clear understanding of what the change is all about. He must create a vision that connects the new shampoo service to long-term sustainability of the carwash. Once this vision is written, Carl must communicate the vision to his entire staff. Carl's employees will need to know what's in it for them. Therefore, Carl will need to show not only the connection between the new shampoo service and the long-term sustainability of the carwash, but also how the long-term sustainability of the carwash will lead to the long-term security of their jobs.

Empowering Broad-Based Action

For the new shampooing service to be successfully developed and implemented, Carl also knows he needs to spend time identifying and removing potential barriers to efficiency to empower broad-based action in his employees and the guiding coalition. Carl must make sure that his employees have all of the resources they need to accomplish their respective tasks in the change process. He must also make sure the carwash has adequate staff to begin offering this new service and the means to promote the service to new and existing customers. Throughout the process, Carl will need to immediately address any barriers brought to his attention by his staff to keep the change process moving.

Generating Short-Term Wins

Performance expectations and incentives will need to be provided to Carl's employees who are working on the new service. Carl ought to check in with his guiding coalition periodically to be certain he is acknowledging their successful efforts to keep them motivated to continue to work towards project goals. Such efforts should be recognized publicly as part of Carl's attempts at generating short-term wins. Again, recognition should include the work it took to accomplish that goal and what the completion of that goal means for the rest of the change process.

Producing More Change

To consolidate gains to produce more change, Carl will need to focus on the role of early success as an enabler of future success. For example, after compiling results from a customer survey on their desire to see a new shampoo service added, Carl might hold a staff appreciation event where he shares the results from a customer survey that demonstrates the interest in the new shampoo service by existing customers and the projected revenue expected by those individuals. These events could be focused on team building at the same time, providing a platform for recognition of those involved in the project and their achievements, as well as the opportunity to demonstrate future milestones and reinforce the vision.

Anchor the Changes

Finally, once the new service has been added, Carl will need to anchor changes within the organizational culture. Carl will want to monitor the acceptance of the new service and how well the organizational culture is adapting to having it on the menu of services. This could be as simple as Carl asking his staff to discuss the service with potential customers or even encouraging employees to explore new services independently then report back to Carl on any services the carwash might consider adding to the menu. Such actions will better prepare employees to be ready for new services that might be introduced in the future.

Lesson Summary

Let's review. In this lesson Carl used John Kotter's eight-step change model to introduce a new interior shampooing service at his carwash. Specific steps of the model include: establish a sense of urgency, create the guiding coalition, develop a vision and strategy, communicate the change vision, empower broad-based action, generate short-term wins, consolidate gains to produce more change and anchor change in the organizational culture. Each step of the Kotter model was discussed using Carl's carwash as the contextual example for making lasting change at the carwash. However, Kotter's model can be universally applied in a variety of change situations to promote the successful implementation of change in any organization.