Stratrix

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Memory aid

Urgency, coalition, vision, volunteers, barriers, wins, momentum, culture. The first step is the fuel; the last is the proof.

TL;DR

Find a reason to move that people can see and that points at something to win; build a coalition and a one-sentence vision; recruit volunteers and remove what blocks them; plan early wins and build on them; then anchor the change in hiring, pay and promotion.

What Is Kotter's 8-Step Change Model?

Kotter's 8-step change model is John Kotter's sequence for leading a large organizational change. In the wording his firm uses today, the steps are: 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, and institute change. Kotter set them out in his 1996 book Leading Change, which grew out of his March-April 1995 Harvard Business Review article on why transformation efforts fail. The first step decides what the other seven have to work with, and the urgency that carries a change through all eight steps aims at something to win, not only at a fire to flee.

Our industry does not respect tradition — it only respects innovation.

— Satya Nadella, email to Microsoft employees on his first day as chief executive, February 4, 2014

On February 8, 2011, a memo from Nokia's chief executive, Stephen Elop, to his staff was published in full by Engadget. It began with a story: "There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire." Nokia, Elop wrote, was standing on a burning platform of its own. "The first iPhone shipped in 2007, and we still don't have a product that is close to their experience." It was Kotter's first step done by the book, and it was true. Three days later, on February 11, Nokia announced that its smartphones would move to Microsoft's Windows Phone. But a memo like that cannot be aimed. Symbian, the software now declared a dead end, ran the smartphones Nokia still had to sell, and the Windows phones did not exist yet. In the second quarter of 2011 Nokia shipped 16.7 million smart devices, the unit that made its smartphones, down from 24.2 million in the first quarter, according to its interim report of July 21, 2011; distributors and operators, the report said, were buying fewer of them. Elop's own line in that report: "The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011." Most people read Kotter's first step as a fire alarm: make people feel the danger and they will move. Nokia shows the catch. An alarm reaches everyone, and customers, carriers and rivals act on it before your own people have anything new to offer. Compare Satya Nadella's first email as Microsoft's chief executive, on February 4, 2014, to a company that earned $22.07 billion of net income in the fiscal year that ended that June, by Microsoft's July 22, 2014 earnings release. There was no fire in it. "While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation." The urgency pointed at a prize, a company that "thrives in a mobile and cloud-first world," and the painful steps came later, one at a time. So the idea to carry away is this: urgency is the fuel for all eight steps, and the kind that lasts points at something to win. Fear moves people fastest, but it moves your customers too. Kotter's own firm now describes step one as inspiring people "to achieve a bold, aspirational opportunity." Before you launch a change, write the sentence meant to create urgency and read it as your best customer would. If it tells them to stop buying what you sell today, either have the replacement ready or find a truer reason to move. Then check the far end of the list: a change is not finished until step eight shows up in how people are hired, paid and promoted.

Kotter's 8 steps of change

The eight steps in the order Kotter set them out, from urgency to culture.

1. Create urgency

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2. Build a coalition

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3. Form a vision

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4. Enlist volunteers

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5. Remove barriers

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6. Short-term wins

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7. Sustain acceleration

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8. Institute change

Origin & context

John P. Kotter, a Harvard Business School professor, published "Leading Change: Why Transformation Efforts Fail" in the March-April 1995 issue of Harvard Business Review. It opens: "Over the past decade, I have watched more than 100 companies try to remake themselves into significantly better competitors." The efforts went by labels such as "total quality management, reengineering, rightsizing, restructuring, cultural change, and turnaround." His 1996 book, Leading Change (Harvard Business School Press), set the lessons out as eight steps. In Accelerate (2014) he recast them as "the eight accelerators" that drive a "dual operating system," and his firm now calls the 1996 version "the linear 8 Step from Leading Change."

Kotter's 8-Step Change Model in action

Nokia

The alarm everyone heard

Stephen Elop's memo to Nokia staff, published by Engadget on February 8, 2011, told the story of a man on a North Sea oil platform woken by an explosion that "suddenly set his entire oil platform on fire." Nokia, Elop wrote, was on a burning platform too. "The first iPhone shipped in 2007, and we still don't have a product that is close to their experience." Nokia's operating system, Symbian, "has proven to be non-competitive in leading markets like North America." And Nokia had made it worse: "We poured gasoline on our own burning platform."

Three days later, on February 11, Nokia and Microsoft announced their partnership, and Nokia set out to make Windows Phone its primary smartphone platform. The urgency was real and the diagnosis was candid. The problem was timing. The phones Nokia could sell still ran Symbian, and in July its interim report could only promise that "step by step, beginning this year, we plan to have a sequence of concentrated product launches."

In the meantime the alarm did its work outside the building. Nokia shipped 16.7 million smart devices, the unit that made its smartphones, in the second quarter of 2011, against 24.2 million in the first and 25.2 million a year earlier, according to its July 21, 2011 interim report, which said distributors and operators were buying fewer of its smartphones. "The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011," Elop said in the same report.

On September 2, 2013, Microsoft agreed to buy substantially all of Nokia's Devices & Services business and license its patents for EUR 5.44 billion in cash. Measured against Kotter's steps, Nokia got step one right on the facts and wrong on the audience: the urgency arrived before the vision had a product to sell, so step six had no wins to show.

Read the full story: Nokia's burning platform memo →

Microsoft

Urgency without a fire

Satya Nadella became Microsoft's chief executive on February 4, 2014, at a company that would report net income of $22.07 billion on revenue of $86.83 billion for the fiscal year ending that June. His first email to employees did not announce a crisis. "While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation." The job, he wrote, was to ensure "that Microsoft thrives in a mobile and cloud-first world." By July the vision had a sentence: "a productivity and platform company for the mobile-first and cloud-first world."

The barrier came with the inheritance. Microsoft completed its purchase of Nokia's phone business on April 25, 2014. On July 8, 2015, it announced it would restructure that business, cut up to 7,800 positions, mainly in phones, and record an impairment charge of about $7.6 billion on the assets it had bought from Nokia. "We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family," Nadella said.

Then came step eight, written into pay. Microsoft's 2017 proxy statement said half of Nadella's annual cash incentive for fiscal 2017 rested on financial results and half on three equally weighted categories, one of them "culture & organizational leadership." The board's assessment: "The Company is undergoing an impressive cultural transformation under Mr. Nadella's leadership." The same filing said Microsoft had supported the new culture "through shifts in how we measure and reward performance."

The two cases meet in one place: the Nokia phone business that a burning-platform memo could not save became, in 2015, the barrier Microsoft paid $7.6 billion to clear. Microsoft's urgency had pointed at a prize, so it could afford to take its losses one step at a time.

Read the full story: how Microsoft came back under Nadella →

Try it on your situation

Self-assessment

Change readiness check

Rate sixteen statements about the change you are leading, two for each of Kotter's eight steps. The steps build on each other, so look first at the earliest low score, not only the lowest.

  1. 1 Most people affected can say why this change cannot wait a year.
  2. 2 Leaders talk about the change as one priority among many.
  3. 3 A group of leaders with real authority is visibly behind the change.
  4. 4 The change depends mostly on one sponsor.
  5. 5 The change can be explained in under a minute, including what we will stop doing.
  6. 6 Different leaders describe the goal of the change differently.
  7. 7 Most people have heard the case for the change several times, from their own managers.
  8. 8 People mostly hear about the change in big announcements rather than day-to-day work.
  9. 9 We have removed at least one process, reward or structure that worked against the change.
  10. 10 People who resist the change face no consequence.
  11. 11 We have a visible, real result from the change that people outside the core team know about.
  12. 12 The first results are more than a year away.
  13. 13 Early wins have been used to take on harder parts of the change.
  14. 14 Attention has already moved on to the next initiative.
  15. 15 How people are hired, promoted or paid now reflects the new way of working.
  16. 16 If the sponsors left tomorrow, the change would stall.

Core Components

1

Create a sense of urgency

Give enough people a reason to act now. The reason reaches everyone who hears it, customers and rivals included, so it works best when it points at an opportunity people can see.

Example

Satya Nadella's first email as Microsoft's chief executive, February 4, 2014: "While we have seen great success, we are hungry to do more."

2

Build a guiding coalition

Assemble a group with the position, credibility and energy to lead the change, not only the senior titles.

Example

Sample (invented): a regional bank's chief executive asks the two branch managers most skeptical of a new lending system to sit on its steering group, because the branches trust them.

3

Form a strategic vision

Say in a sentence what the organization will become and which initiatives get it there.

Example

Microsoft's July 22, 2014 earnings release, quoting Nadella: "a productivity and platform company for the mobile-first and cloud-first world."

4

Enlist a volunteer army

Spread the vision until large numbers of people choose to work on it, rather than broadcasting it once from the top.

Example

Sample (invented): the same bank invites tellers to test the system early, and the first volunteers train the next branch.

5

Enable action by removing barriers

Take away the structures, systems, budgets or businesses that block the change, even expensive ones.

Example

On July 8, 2015, Microsoft announced it would restructure its phone hardware business, cut up to 7,800 positions and take an impairment charge of about $7.6 billion on the Nokia business it had bought.

6

Generate short-term wins

Plan visible, unambiguous results early, so the change earns credibility before its critics win the argument.

Example

Sample (invented): the bank publishes each month how many days the new system takes off a loan decision in the pilot branches.

7

Sustain acceleration

Use the credibility from early wins to take on bigger changes instead of declaring victory.

Example

Sample (invented): after the pilot, the bank moves on to the harder job of rewriting the credit policies the old system had hidden.

8

Institute change

Anchor the new behavior in hiring, pay, promotion and the way results are measured, until it replaces the old habits.

Example

Microsoft's 2017 proxy statement graded "culture & organizational leadership" as one of three equally weighted categories in the qualitative half of Nadella's annual cash incentive.

Where "70% of change efforts fail" comes from

The figure is often pinned on Kotter. Its best-known appearance is in a different Harvard Business Review article, Michael Beer and Nitin Nohria's "Cracking the Code of Change" (May-June 2000): "The brutal fact is that about 70% of all change initiatives fail." In 2011 Mark Hughes of the University of Brighton reviewed five published instances of the claim in the Journal of Change Management and concluded that "there is no valid and reliable empirical evidence to support such a narrative."

When to Use Kotter's 8-Step Change Model

Scenario 1

Changing a company that is still making money

Problem it solves: Without a crisis, people see no reason to move. The urgency has to come from an opportunity rather than a threat.

Real-world application

Microsoft earned $22.07 billion of net income in fiscal 2014, the year Nadella took over, by its July 22, 2014 earnings release. His first email framed the change as hunger, not fear: "we are hungry to do more."

Scenario 2

Replacing the product you still sell

Problem it solves: Announcing that today's product is finished tells customers to wait for the next one.

Real-world application

Nokia announced its move to Windows Phone on February 11, 2011, while the smartphones it sold still ran Symbian. Its smartphone shipments fell from 24.2 million in the first quarter of 2011 to 16.7 million in the second, by its July 21, 2011 interim report.

Scenario 3

Sample (invented): a system change in a branch network

Problem it solves: Shows the middle steps, where most of the work is. The example is illustrative, not a real company.

Real-world application

A regional bank replacing its lending system puts two skeptical branch managers on the steering group (step 2), lets volunteer tellers test it first (step 4), publishes the days it saves on each loan decision (step 6), and only then rewrites the credit policies the old system hid (step 7).

Read your urgency message as a customer

Before it goes out, ask who outside the building will read it and what they will do the next morning. If the honest answer is "stop buying," make sure the replacement is on sale first, or find a truer reason to move.

How to Apply Kotter's 8-Step Change Model: Step by Step

Before you start

  • →One sentence on why the change matters now, written for people outside the leadership team
  • →A sponsor prepared to stay with it past the first round of results
Tools:A one-page urgency and vision statementA list of barriers with an owner and a date for eachA short list of planned early wins
1

Find the urgency (step 1)

Write down the reason to move now, then test it on the people who will hear it: staff, customers, partners, rivals.

Tips

  • ✓An opportunity people can see lasts longer than a fear they are told about

Common mistakes

  • ✗Declaring today's product finished before its replacement can be bought
2

Build the coalition and the vision (steps 2-3)

Assemble people with authority and credibility, and agree on one sentence describing where the organization is going.

Tips

  • ✓Include respected skeptics; their support persuades the people who share their doubts

Common mistakes

  • ✗A coalition made only of senior titles
3

Enlist and enable (steps 4-5)

Recruit volunteers to carry the vision, and remove what blocks them: approvals, budgets, reporting lines, whole businesses if need be.

Tips

  • ✓Name the largest barrier out loud and set a date for removing it

Common mistakes

  • ✗Leaving the biggest barrier in place because it is expensive to remove
4

Win early, then keep going (steps 6-7)

Plan results people can see within the first months, then use the credibility to take on the harder changes.

Tips

  • ✓Choose wins that critics cannot dismiss as luck

Common mistakes

  • ✗Treating the first win as the finish line
5

Anchor it (step 8)

Put the new behavior into hiring, promotion, performance reviews and pay.

Tips

  • ✓Ask what a manager who ignores the change loses; if the answer is nothing, step 8 has not happened

Common mistakes

  • ✗Relying on slogans and training alone

We poured gasoline on our own burning platform.

— Stephen Elop, Nokia's chief executive, memo to employees published by Engadget on February 8, 2011

Value & Outcomes

Primary benefit

Gives a leader an order of work for a large change, and a way to see which step a stalled change skipped.

Additional benefits

  • ✓Makes the first step, the reason to move, explicit and testable
  • ✓Keeps attention on the last step, where a change becomes the way things are done

What you'll learn

  • →Why the source of urgency matters as much as its strength
  • →How a change gets anchored in pay and promotion rather than slogans

Typical outcomes

A change plan with an owner for each of the eight stepsA written urgency message tested on customers as well as staff

Best Practices

📋 Preparation

  • •Write the urgency sentence and read it as your best customer would
  • •Name the coalition before the announcement, not after

🚀 Execution

  • •Remove the largest barrier early, even if it is expensive
  • •Plan short-term wins deliberately

🔄 Follow-Up

  • •Change hiring, promotion and pay to match the new behavior
  • •Keep reporting progress after the first wins

💎 Pro Tips

  • •Kotter's own firm now frames step one around "a bold, aspirational opportunity"; start there before reaching for a crisis
Step eight is about pay, not posters

A change that lives in speeches and slogans fades when its sponsor moves on. Check whether the new behavior shows up in who gets hired, promoted and paid.

Limitations & Pitfalls

⚡

The steps read as a straight line, and real changes overlap. Kotter's firm now calls the 1996 model "the linear 8 Step," and his 2014 book Accelerate recast the steps as eight accelerators driving a "dual operating system."

Mitigation: Use the eight steps as a checklist of what must be true, and expect to work on several at once.

⚡

Urgency cannot be aimed. A burning-platform message reaches customers and rivals as well as staff, as Nokia found in 2011.

Mitigation: Ground the urgency in an opportunity, and do not declare a product finished before its replacement ships.

⚡

The model is written for leaders at the top and says little about how each person moves through a change.

Mitigation: Pair it with ADKAR for individual change; the change management guide in The Strategist's Craft sets Kotter, ADKAR and Bridges side by side.

⚡

The famous statistic around it is unsupported. The claim that 70% of change efforts fail has no valid and reliable evidence behind it, by Hughes's 2011 review.

Mitigation: Make the case for change from your own numbers, not a borrowed failure rate.

Where this comes fromJohn P. Kotter introduced this (1995).

Sources & further reading

More Management Frameworks

Other frameworks in the Stratrix library.

Change & Transformation

Bridges' Transition Model

A psychological model of change that distinguishes between change (external) and transition (internal), describing three phases people go through — Ending, Neutral Zone, and New Beginning — to process and adapt to change.

Goal Setting & Measurement

4DX (Four Disciplines of Execution)

An execution methodology with four disciplines — Focus on Wildly Important Goals, Act on Lead Measures, Keep a Compelling Scoreboard, and Create a Cadence of Accountability — designed to achieve breakthrough goals amid the 'whirlwind' of day-to-day operations.

Strategy Development

Hoshin Kanri

A Japanese strategic planning methodology that aligns the entire organization around breakthrough objectives through a systematic process of setting strategic goals, cascading them through every level, and using PDCA cycles to ensure execution.

Leadership & Talent

Skill-Will Matrix

A 2x2 matrix that helps managers choose the right management approach based on an employee's skill level and willingness/motivation for a given task.

Leadership & Talent

GROW Model

A structured coaching conversation framework that guides people through Goal, Reality, Options, and Will to find their own solutions.

Marketing & Customer

Customer Lifetime Value

A predictive metric estimating the total revenue a business can expect from a single customer account throughout their entire relationship, guiding acquisition spending, retention investment, and customer segmentation.

Tools to try

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