Book Excerpt September 4, 2008, 5:00PM EST

John Kotter on How to Transform Companies

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Our rational minds tell us that none of these issues of presentation should matter. What is important is content: Is this a solid analysis and plan or not? But the best plan may raise little urgency in a company whose very successes have left it so complacent that most people are not looking for, and are not inclined to listen to, a new plan.

Within the company in question, six months after the yearly meeting many people were moving with a new sense of urgency to deal with their considerable challenges. The second man's speech was only one of many actions that undercut a sleepy contentment with the status quo. But it was an important action.

The sequence of events seems to have been as follows: First, an emotionally compelling speech was given at a very important meeting to a very important audience. Then urgency rose among many of those in the meeting, including the speaker's boss. The increased urgency was one factor in helping create a committed team to deal with the challenges. The team worked energetically with others to create a new, sensible vision and strategy, with the first speaker's ideas having a significant effect at that point. The energized team spent hours carefully and cleverly communicating the strategies, visions, and plans with both their minds and their hearts—and onward from there.

Great leaders understand that historical success tends to produce stable and inwardly focused organizations, and these outfits, in turn, reinforce a feeling of contentment with the status quo. Later failures to produce short-term results or to adapt to change can produce a great deal of activity—but this is often unproductive activity driven by anxiety about one's own future (not the organization's future) or by anger at others. In a competitive, fast-moving world, all this can be deadly. And none of it can be fixed by a mind-only strategy.

The most successful "heart-head" approaches fall into four categories.

In the first, people dramatically bring outside reality into groups that are too inwardly focused. They do not just collect data and dump it on individuals or massage valid information into goals and present them on PowerPoint slides, as the first speaker did. Instead, they create emotionally compelling experiences involving other people, information, and even the right kinds of business cases, as the second speaker did.

Second, they behave with true urgency themselves. They do not just say the right words daily, but they make their deeds consistent with their words.

Third, they look for the upside possibilities in crises, but very selectively and with great care. They do not view a crisis as only a threat but also as a potential opportunity to shake up an organization and reduce complacency.

Fourth, they confront the problem of "No-Nos." They do not accept the notion that an organization must put up with people who relentlessly work to kill urgency.

All four tactics can have an effect that is visceral, not merely intellectual, influencing attitudes, thoughts, feelings, hopes, dreams, and behavior. You can transform complacency with the status quo, or the anger and anxiety associated with a perceived mess, into a determination to move and win, now.

John P. Kotter is the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School and a leading thinker on change management.