Change Management
The Big Idea
HOW
HOW THE MOST INNOVATIVE
COMPANIES CAPITALIZE ON TODAY’S
RAPID
RAPID FIRE STRATEGIC CHALLENGES
AND
AND STILL MAKE THEIR NUMBERS.
BY
BY JOHN P. KOTTER
PHOTOGRAPHY: GETTY IMAGES
HBR.ORG
November 2012 Harvard Business Review 45
THE BIG IDEA ACCELERATE!
Perhaps the greatest challenge business leaders face today is how to stay competitive amid constant turbulence and disruption.
Any company that has made it past the start-up stage is optimized for e ciency rather than for strategic agility—the ability to capitalize on opportunities and dodge threats with speed and assurance. I could give you 100 examples of companies that, like Borders and RIM, recognized the need for a big strategic move but couldn’t pull themselves together to make it and ended up sitting by as nimbler competitors ate their lunch. The examples always play out the same way: An organization that’s facing a real threat or eyeing a new opportunity tries—and fails—to cram through some sort of major transformation using a change process that worked in the past. But the old ways of setting and implementing strategy are failing us.
We can’t keep up with the pace of change, let alone get ahead of it. At the same time, the stakes— financial, social, environmental, political—are rising. The hierarchical structures and organizational processes we have used for decades to run and improve our enterprises are no longer up to the task of winning in this faster-moving world. In fact, they can actually thwart attempts to compete in a marketplace where discontinuities are more frequent and innovators must always be ready to face new problems. Companies used to reconsider their strategies only rarely. Today any company that isn’t rethinking its direction at least every few years—as well as constantly adjusting to changing contexts— and then quickly making significant operational
46 Harvard Business Review November 2012
changes is putting itself at risk. But, as any number of business leaders can
HOW
HOW THE MOST INNOVATIVE
COMPANIES CAPITALIZE ON TODAY’S
RAPID
RAPID FIRE STRATEGIC CHALLENGES
AND
AND STILL MAKE THEIR NUMBERS.
BY
BY JOHN P. KOTTER
PHOTOGRAPHY: GETTY IMAGES
HBR.ORG
November 2012 Harvard Business Review 45
THE BIG IDEA ACCELERATE!
Perhaps the greatest challenge business leaders face today is how to stay competitive amid constant turbulence and disruption.
Any company that has made it past the start-up stage is optimized for e ciency rather than for strategic agility—the ability to capitalize on opportunities and dodge threats with speed and assurance. I could give you 100 examples of companies that, like Borders and RIM, recognized the need for a big strategic move but couldn’t pull themselves together to make it and ended up sitting by as nimbler competitors ate their lunch. The examples always play out the same way: An organization that’s facing a real threat or eyeing a new opportunity tries—and fails—to cram through some sort of major transformation using a change process that worked in the past. But the old ways of setting and implementing strategy are failing us.
We can’t keep up with the pace of change, let alone get ahead of it. At the same time, the stakes— financial, social, environmental, political—are rising. The hierarchical structures and organizational processes we have used for decades to run and improve our enterprises are no longer up to the task of winning in this faster-moving world. In fact, they can actually thwart attempts to compete in a marketplace where discontinuities are more frequent and innovators must always be ready to face new problems. Companies used to reconsider their strategies only rarely. Today any company that isn’t rethinking its direction at least every few years—as well as constantly adjusting to changing contexts— and then quickly making significant operational
46 Harvard Business Review November 2012
changes is putting itself at risk. But, as any number of business leaders can