Do you know why transformation efforts fail? Organizations may be going through changes, but they’re not implementing John Kotter’s “Leading Change” model.
We’ll explore that concept in a bit.
Throughout history, the idea of change sends shivers and unease to people. After all, transformations require us to step out of our comfort zones, and that’s terrifying. However, there are moments when embracing transformational change is necessary, and it may be the saving grace of an organization.
Change can give your business the competitive edge to remain relevant in your industry. Whether that’s encouraging innovation, developing skillsets or finding better opportunities, change is the backbone.
No material explains change better than John Kotter’s “Leading Change” book. It outlines everything from why change initiatives fail to predictions of future organizations, and finally Kotter’s 8-step change model. There’s a reason why Kotter is viewed as the number one authority in change and leadership– his methods work.
Unless your organization manifests the principles of “Leading Change,” achieving permanent transformational change is statistically unlikely.
Here, we’ll explore Kotter’s “Leading Change.” We’ll look at why change efforts failed in some of history’s renowned companies and uncover the lessons behind their downfall. Let’s keep reading.
Kotter’s Leading Change
The “Leading Change” is John Kotter’s 11th book from his 21 publications. He has been known to produce actionable material on leadership and change to prop up 21st-century companies for success. Among John Kotter’s work and processes, “Leading Change” has received the most public attention and recognition. All thanks to his renowned 8-step change model, which are as follows:
- Create a sense of urgency.
- Build a guiding coalition.
- Form a strategic vision.
- Enlist a volunteer army.
- Enable action by removing barriers.
- Generate short-term wins.
- Sustain acceleration.
- Institute change.
His 8-step change management process checked the boxes that Kurt Lewin’s 3-step linear change model failed to address. That’s why to this day, Kotter’s system remains relevant among businesses of all industries. Especially for rapidly changing and revolutionizing industries, like residential home services.
While terrifying, going through changes is a natural pruning process every business must go through. Think of it as the metamorphosis that takes your crawling caterpillar of a company into the high-flying butterfly it should be.
Are you sick of failed change initiatives and desire transformational change that sticks for your company? Wizard of Sales® can help you take your business to the next level. Book a call.
Companies of the Past Decades that Failed in their Transformation Efforts
Whether you like it or not, change is inevitable. In business, companies must continuously adapt to their ever-changing environment in order to survive and thrive. However, many companies of old have failed when it comes to leading change within their organizations.
Their rise and fall narratives may be dire but are bound to be repeated unless businesses learn from their failings. Let’s explore five companies that fell short of leading change.
General Motors
General Motors is a company that many American would say stood the test of time. How this towering colossus in the automobile industry and once a symbol of American innovation fell has been a mystery. There have been many speculations, but three things emerge over others:
- GM started producing cars that people don’t like.
- GM is overly bureaucratic and rigid to market changes.
- GM mishandled its assets.
All of these reasons played a part in GM’s descent into oblivion, but there’s one underlying reason above all. They failed to adapt in changing times. Let me explain.
General Motors was founded in 1908 and arguably accelerated to success during the time of Alfred P. Sloan (1923-1956). Even during the Great Depression and through World War II, GM flourished. Sloan built GM into a powerful empire until his retirement in 1956 when GM monopolized half of America’s auto market.
Everything GM became was tarnished with the arrival of Roger Smith. He built all models (Chevrolet, Cadillac, Pontiac, Buick, Oldsmobile) on a single platform albeit with their own grills and headlights. In other words, GM lost their touch with American motorists. Furthermore, in hopes to keep the bottom line happy, Smith resorted to cost-cutting.
There’s only one problem: You cannot shrink your way to profit.
Instead of reinvigorating their lost creativity, they got lost in a Sea of Sameness.
Instead of leading change to fix their broken financial system, they stuck with the status quo.
Instead of paving ways to increase sales, they chose to cut costs.
In the words of Roy H. Williams:
“By depriving his brands of the oxygen of creativity and innovation, Roger Smith choked the life out of General Motors.”
Blackberry
BlackberryAnother iconic brand that failed in leading change within its framework. Who could ever forget BlackBerry? The iconic smartphone of bankers, professionals, and politicians. It was the device that popularized a physical keyboard, a side wheel and a center navigational trackball. The once glorified technology fell with the rise of Apple’s iOS and Google’s Android.
What gives?
BlackBerry’s downfall has been repeated countless times, but it’s worth repeating to wake businesses to reality.
In a rapidly changing technological landscape, BlackBerry chose novelty. Instead of leading change to meet consumer tastes and preferences, they chose enterprise. Clunky small-screen smartphones had no place in 2007, yet they remained devoted to the design that once brought them success. They stayed in the shadow of their former glory.
Where is BlackBerry now? From a global market share of 20.7 percent in 2009 to nada after 7 short years. All because they didn’t lead the change when they knew they had to.
Yahoo
Technology changes fast. The only way to sustain the success of tech companies is to leverage innovation and smart acquisitions for tomorrow. We’ve seen Facebook do it with Instagram. We’ve witnessed Google do the same with Youtube. They buy competitors and new technology to flush out algorithms and reinforce their own.
Yahoo, on the other hand, had some trouble reading industry tea leaves leading up to its downfall. Founded in 1994 when the World Wide Web was all but a foreign concept, Yahoo sprang to popularity as a search engine. Two years later, the company was valued at $900 million. Another two years passed and their value rose to a towering $40 billion and in 2000, it peaked at $125 billion.
Yahoo’s unfortunate demise is a combination of failed changes and changes they didn’t attempt. Rigidity to the system is dangerous as it suffocates a business’s potential. As the internet landscape shifted, Yahoo failed to keep up, choosing instead to double down on its original game plan.
- They turned down PageRank, an algorithm now used by Google to rank webpages, despite its measly $1 million asking price.
- They paid $1 billion for GeoCities in 1999 and $5.7 billion for Broadcast.com in 2000.
- They didn’t increase the $1 billion buy-out offer to Mark Zuckerberg, which would’ve made Yahoo a social media behemoth today.
- They turned down Microsoft’s hostile takeover for $44.6 billion dollars in 2008.
In hindsight, these were terrible decisions that set them back years. At the core of it all, Yahoo and its constituents failed to lead the change that could’ve saved them. Verizon acquired Yahoo for $4.5 billion in 2017.
Kodak
Kodak’s failure was a long time coming. When stories of bankruptcy hit the papers, you’ll see experts reviewing five years’ worth of financial statements. The financial analysis gives insights to determine where everything went wrong.
The truth of the matter is, according to John Kotter in his Forbes article, it’s been looming since the 1980s. Kodak’s entire ruin can be summarized in one word: complacency.
Even when they brought in George Fisher as CEO, the prodigy purported as good as Jack Welch, the company failed. Banking on traditional film cameras was the company’s biggest success. While effective at one point, the same attachment that has once brought them glory, became their greatest undoing.
With the rise of technology and evolving market demands, there was no room for traditional cameras. Kodak’s complacency stunted its transition into the digital revolution.
The commercial print world witnessed a brooding culture of innovation and change, but Kodak didn’t. Even Kodak’s employees witnessed companies like Fuji overtake them. Novel ideas that could get Kodak back at full throttle were buried in the bureaucratic hierarchy.
Kodak’s example can be a vicious cycle that every business could experience. Unless a transformative leading change is implemented.
RadioShack
Like General Motors, RadioShack was one of the most long-standing businesses in the United States. Originating in 1921, they pioneered providing radio equipment in the heart of downtown Boston. However, in February of 2015, they filed for bankruptcy.
There are a lot of reasons businesses fail. They can be out-innovated, out-competed, or just plain mismanaged. Sometimes, the reason a company fails is that it doesn’t change with the times. RadioShack failed to adapt and remain relevant when sales shifted to an online landscape. As we all know, RadioShack was left stuck in a brick-and-mortar era.
The gradual rise of online stores like Amazon and eBay meant the downward spiral of RadioShack. After all, if you could purchase electronics from the comfort of your home, why bother visiting their retailer? With complaints of lacking inventory, they sealed their fate.
To their credit, RadioShack changed management seven times from 2005 to 2014. However, the hole that previous leaders dug was too deep to resuscitate their dying brand. Perhaps a transformational change could have saved them. Maybe a shift towards the online space decelerated their bankruptcy.
Unfortunately, with all the marketing efforts and revamps that they initiated during their final years, embracing the future was not part of it.
Valuable Lessons
The common denominator for all these companies is that they were leading the pack at one point in time. They disrupted their respective industries and changed the way we live and work. Yet, each one of them remained in the cocoon of their knowledge. No one was leading change that would forever transform and save their business.
Even when innovators and forward-thinkers within their rank knew the way out of the quicksand, they were buried in the bureaucracy. From John Kotter’s “Leading Change,” we observe the biggest mistake they all had in common: Lack of futuristic vision and insight.
Admittedly, it’s easy to overlook existing problems when you’re at the top. Sometimes, you need other people within the organization to make leaders understand where they’re going wrong. That’s what communication channels are for. Perhaps, being at the top drowns all other noise in utter silence.
If you want a leading change for your company, you need experts to guide your team throughout the process. Wizard of Sales® can help mold your company in line with Kotter’s 8-step change model. Book a call.