Why Kotter’s Change Framework Doesn’t Work for Large Family Businesses

David on Jul 11, 2017

“Changing a company typically means changing the people, to change the people, you have two choices (i) you help the people to change or (ii) you change the people.” – David Oxley (adapted from Collins, Kotter, et al.,)


As you know, I am a student of organizational change. While my original professional training was more general management consultancy, over the past 20 years I have taken on corporate roles, which have typically been rooted in some form of change challenge. With Enron, it was the wake of bankruptcy, with BP it was difficulties with US trading compliance and the Gulf of Mexico crisis. Consequently, my interest and increasing specialization in organizational change have grown.


When faced with these corporate restructuring efforts, I have relied heavily on what I have gleaned over the years from academia. In particular, I suspect, along with many of you, my ‘go to’ models for thinking and then designing large scale change efforts have been Kotter’s eight steps (2007), and aspects of Jim Collins’ BHAG model (2011). These have served me well over the years, albeit with some significant pragmatism given the specific and unique circumstances of the challenge at hand.


However, I have recently come to question the adequacy and efficacy of these widely-held change models. In this blog post, my intention is to present the case that they do not serve large family businesses at all well. In fact, I have come to believe, that for family businesses they are fundamentally flawed. My conclusion is to recommend that family businesses consider alternative tactics to achieve change, which maximizes rather than ignores their unique dynamics.


What We Currently Know About Organizational Change


Since I was given cause to doubt aspects of the popular change frameworks (the subject of a future post), I undertook a more detailed review of the available academic literature. My review started with classic Lewinian change theory which largely underpins the contemporary models espoused by Kotter and Schein. One quickly gets a sense of the depth and breadth of academic enquiry, including both the philosophical question of how change can occur in an organization, and the various roles played by leaders, followers, and other stakeholders (to mention a few: Higgs and Rowland, 2005; Kotter, Lawrence and White, 2007; Papanek, 1973; Poole and Van de Ven, 2004; Schein, 2010). The litany of existing work can be daunting. To make sense of it all, I constructed a map which I have shown below, as Figure 1.


Figure 1: Various Perspectives of How Large-Scale Organizational Change May Occur (Author)

Kotter's Change Framework

In Figure 1, I have divided the chart into quadrants based on what I observe as the major academic perspectives on organizational change. On the north/south axis, I have plotted the perspectives of whether change can follow a linear path (start, middle, end) or whether it is unpredictable and iterative (chaotic and complex). On the east/west axis, I have plotted the points of view relating to whether change can be imposed by leadership and owners or whether it is more organic or co-invented with all members of an organization.


I find the illustration very useful. It shows the wide array of perspectives, all of which have substance and value. You will see I have placed Lewian Theory in the upper left quadrant. Two points here (1) Lewinian theory as I have said is the school of thought on which Kotter’s work is a largely based, and (2) it fits certain philosophical assumptions about how change can occur in an organization. On this last point, the assumption behind Kotter’s work is that it can follow a series of 8 pre-conceived steps and that it can be largely instigated and managed by the owners/executive management of an organization. It is helpful I think when exploring organizational change approaches to understand the current diversity of philosophical perspectives.

A More Detailed Analysis of Kotter’s Framework


The main reason for starting with the illustration of the spectrum of organizational change models is to try to underline that my reasons for doubting Kotter’s efficacy for large family businesses is NOT because it is misaligned with these starting assumptions. I have been working with a large family business, who have been attempting a ‘strategic planned change’ program. They are imposing this on their organization. They are also attempting to prescribe the steps the change program should take to achieve a preconceived outcome. Consequently, this family business’ starting disposition to change is in the same top left-hand quadrant as Lewinian theory and Kotter’s 8-steps.


Why then, in studying this large family business’ transformation program, do I see fundamental challenges with some of Kotter’s advice? The answer I believe is in some of the hidden assumptions embedded in Kotter’s work. I will illustrate what I mean in Figure 2 below.


Figure 2: Implied Philosophical Components of Kotter’s Framework (Author)

Kotter's Change Framework


In Figure 2, I have deconstructed Kotter’s 8-steps and highlighted some important assumptions. There are three important ideological assumptions implicit in Kotter’s work: (1) a perspective of the chronology of events, (2) an assumption of needing to persuade a constituency of leaders, then followers, to participate, and (3) a utilitarian approach to achieving the change program’s goals, which imposes some consequence on those who do not comply. Since Kotter’s model was built in the early 1990s based on research into U.S.-based, multi-national companies like General Motors, Bristol-Myers Squibb, and Eastern Airways, it should not be too much of a surprise that a great deal of the focus of his first 5 steps are designed to ‘build a coalition of the willing.’ This makes complete sense in organizations where authority is disseminated and gives rise to the widely-held belief that ‘resistance-to-change’ is one of the biggest potential barriers to change success (see Armenakis and Harris, 2009; Coetsee, 1999; Holt et al., 2007; Walinga, 2008).


Another assumption in Kotter’s work is that of a ‘utilitarian approach’ to change. This is where my opening quote was focused. Essentially, one key component of traditional organizational change is that a company places the importance of the organization’s goals over any one individual. In Figure 2, I have highlighted how steps 5-8 to some extent assume that success requires a somewhat ‘coercive approach’ to change. Employees of an organization are given the opportunity to change, to conform with new expectations, or there is a consequence. Typically, the consequence is to be asked to leave.

Why I Believe Kotter’s Framework Doesn’t Work for Family Firms


There is substantial evidence that family businesses exhibit different behaviors to their non-family counterparts. From an academic standpoint, the field of family business literature has spawned a few theories to explain these differences including; Socioemotional Wealth (the notion a family business prioritizes a combination of its reputation and social standing sometimes ahead of pure profit), and Familiness (the concept that family firms have unique capabilities and relationships which allow them to out-perform institutional counterparts). However, the two specific attributes of family firms that I cite as causing most difficulty with Kotter’s change framework are:


(1) Owner-Centricity: The existence of a figure who is followed with unquestioning reverence by his/her organization.


(2) Individual Loyalty: A very strong commitment to long-serving employees and a deep sense of obligation to ‘take care of them.’


The ‘owner-centricity’ observation in family firms points to the extraordinary power of a single individual to make decisions, impose them on their organization, and garner enormous levels of immediate acceptance. This power is akin to the reverence or faith invested in a community or religious leader. In his/her domains, they can make a decision and, with little or no explanation, feel confident that followers (or disciples perhaps) will unquestionably follow.


Somewhat linked to the ability to instantly shift an organization, is loyalty to long-serving employees. The two aspects have a symbiotic nature in that by implicitly committing to ‘take care of their employees for life,’ family business owners fuel the reverence with which they are held.


These two traits are widely accepted as distinctive attributes of family-owned firms. When one reads the work of John Ward, Gibb Dyer, Ivan Lansberg, and Kelin Gersick, there is consistent and persuasive evidence of family firms taking much more authoritarian positions on business strategy and exhibiting unwavering loyalty to long-standing employees. So, for family firms, given these distinctive attributes, I believe there are some problems when reflecting back on Kotter’s framework. If an owner-centric organization can simply be instructed to adopt change, why should they spend time building consensus? Equally, if Kotter’s framework requires a utilitarian approach, how can family-firms reconcile this with their strong allegiances to long serving employees? By following  Kotter’s model, are family firms essentially be led to the edge of a sheer cliff which they will be ill-equipped to navigate?

An Alternative Change Model for Family Businesses


My purpose in this blog is to raise some questions about whether contemporary organizational change frameworks provide adequate help for family businesses attempting large-scale organization change. While there are different points of entry into the discussion of how organizations change, for ‘strategic planned change,’ where a company’s board, owner or chief executive decides a significant shift of business model is required, the prevailing wisdom from academia and consulting is grounded in Kurt Lewin’s work and popularized by John Kotter’s 8-step model. There are few alternatives and none currently that specifically cater to family businesses.


Since family businesses are the most prevalent form of economic enterprise in the world, and large family businesses are so vital to the fast expanding economies in Asia, I pose the following question: Since large Family businesses face at least the same challenges as their non-family counterparts in navigating change, and given the increasing ‘velocity’ of business cycles and disruption from technology, shouldn’t we explore whether there is a more effective change framework which embraces rather than ignores their distinctive characteristics?

What do you think?


Kotter's Change FrameworkAbout the Author

David R Oxley is a Leadership and Organisational Change Advisor. Originally a management consultant with E&Y, David has spent the last 25 years working in senior HR positions with companies wishing to transform their operations. Currently David is advising a large Indian energy and consumer business on organisational change. David is a graduate of the University of Notre Dame, the University of Phoenix, a Fellow of the Chartered Institute of Personnel & Development, and is currently pursuing his Doctorate at Cranfield University. He can be reached at David@DavidROxley.com

Originally published July 2017

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