A Sense of Urgency
John P Kotter
Harvard Business Press £11.99
Given recent momentous events in the City and on Wall Street, it would be fair to say that management in some companies does possess the requisite sense of urgency. Huge deals have been mooted, negotiated and agreed in the blink of an eye.
But in my experience of working with companies looking for advice on business performance improvement, speed of action is usually the exception rather than the rule. Most companies lose huge opportunities to preserve and capture value precisely because they do not move quickly enough.
So John Kotter's latest tome on grappling with organisational change, A Sense of Urgency, could put some struggling businesses firmly on the road to effecting lasting improvements in company performance.
A whole industry has been built around managing business change. Kotter, a Harvard Business School professor, has been one of the key academics researching progress in the area since the mid-90s. His 1995 article for the Harvard Business Review led to his bible of change, Leading Change (Harvard, 1996), plus two further works. Now he has crafted a book around the first stage - a sense of urgency - in his eight-step change formula.
And very good it is, too. For the time-pressed board director embroiled in the ceaseless flow of change typical of today's business world, a quick read of the original HBR article would probably suffice as a solid introduction to transformation strategies. But Urgency rewards the reader with further extrapolation of what Kotter sees as the most important enabler for change. Handy summaries of the key actions required to create and sustain that all-important sense of urgency are to be found throughout the book.
'Complacency' is the villain of the piece. Contentment with the status quo - a 'not my problem' mentality - is endemic, and catastrophic for companies. Its insidious, more destructive counterpart is the 'false sense of urgency', which results in much activity but little actual progress.
We are all too familiar with the 'headless chicken' syndrome. The project that never gets off the ground due to endless discussion about unnecessary detail and the strategy document that ploughs through umpteen iterations without actually being implemented have become commonplace in nearly every company in the land.
Dragging a company out of complacency is much more straightforward when it is highly distressed and at the make-or-break stage. However, when there has been a slow decline in performance, it is easy to ignore the elephant in the room. I have worked with many chief executives who have been over-optimistic about their company's direction or have spent valuable time trying to align and mobilise the rest of the board.
The perfect formula for change is: a high enough sense of urgency among a large enough group of people. But how do you create that urgency? Usually, buy-in for any decision or change is achieved by using logical argument and detailed analysis. Kotter's view is that the business world also needs to wake up to the merits of exploiting feelings. His overall urgency- generating strategy is to inspire commitment by folding a rational case directed at the mind into an experience aimed at the heart.
That may sound a bit woolly, but stick with it. Kotter's four tactics for increasing urgency in an organisation must arouse emotion, thereby creating a determination to act with purpose and a desire to achieve success now. One fairly obvious approach is to bring external advice or information into a company to eradicate complacency and reveal threats and new possibilities. The emotional connection? Share outside information with the rest of the company - such as feedback from disgruntled customers or market research - and galvanise teams into action.
If management tries to initiate change based on feedback but does not share that feedback, the rationale is unsubstantiated, there is no sense of urgency, and so execution is thwarted.
Crisis has dogged many companies in recent weeks. But few executives will have come up for air long enough to see the opportunity for transformation that Kotter believes a crisis presents. Companies tend to retreat into damage- control mode, ignoring the opportunity to mobilise needed action and create the sense of urgency that might result in successful change - the third of the four tactics he expounds in Urgency. If there is no tangible crisis to hand, you could create one - setting tough targets or bringing in external advisers to show the writing on the wall.
You cannot quibble with Kotter's advice. But his examples - annoyingly, all anonymous - could be more relevant. Instead, they are rooted in a bygone era when company gearing was well below the levels we are witnessing in today's markets. Rewind 15 years and corporate crises were often related to earnings and profitability.
Now, running out of cash, breaching banking covenants or simply losing market confidence due to high leverage are typical, leading to a rapid slide into distress and the need for a much swifter approach to restructuring and change implementation. In these situations, urgency is needed more than ever. It is a shame Kotter does not reflect this contemporary reality in his anecdotes.
But this small defect does not detract from the overall success of the book. It is practical and full of good sense. His closing advice to 'start now' and focus on some quick and easy actions as a result of reading the book chimes perfectly with its overall thrust: be opportunistic, make something happen, and act urgently.
Malcolm McKenzie is MD of performance improvement, restructuring and turnaround firm Alvarez & Marsal Europe.