Welcome back to Leadership Unpacked with The Business Book Club, where we turn today’s biggest leadership challenges into actionable insights. I’m Hannah Hally, and in this episode we’re diving into one of the most critical aspects of leadership: Leading Through Change.

We’ll explore lessons from Spencer Johnson’s classic Who Moved My Cheese? and John Kotter’s Leading Change, paired with real-life examples from companies like Netflix and Microsoft. By the end of this episode, you’ll walk away with strategies for guiding your team through uncertain times and embracing change as an opportunity, not a setback.

 The nature of change and why it is so hard

Let’s start with why change can feel so daunting. In Who Moved My Cheese?, Spencer Johnson uses a parable to illustrate how different personalities react to change. You’ve got Hem, who resists it with everything he’s got, digging in his heels and hoping things go back to ‘normal.’ And then there’s Haw, who initially hesitates but ultimately learns to adapt, finding new opportunities where he once saw only obstacles. Johnson’s story reminds us that while change is inevitable, it’s our response that determines whether we adapt, grow, or fall behind.

This reaction is common in all areas of life, but it’s particularly amplified in business. When an industry shifts or a company undergoes restructuring, the natural human response is often fear or resistance. Change feels like a loss of control, and we’re wired to avoid that. But as Johnson’s parable shows, standing still can be more dangerous than moving forward into uncertainty.

Let’s take a real-world example: Blockbuster. When streaming began to take hold in the early 2000s, Blockbuster had the opportunity to pivot. Netflix even approached Blockbuster to suggest a partnership. But Blockbuster’s leadership didn’t believe that streaming would catch on; they stuck with what had always worked for them—brick-and-mortar rentals and late fees. They didn’t see the need to change, and by the time they recognized streaming as a serious competitor, it was too late. Netflix had already cornered the market.

Imagine how different the industry would look if Blockbuster had chosen to embrace change rather than resist it. Instead, they became a cautionary tale—a real-life Hem—failing to adapt until it was too late. Today, Netflix reigns supreme while Blockbuster is a memory.

And somewhere out there, someone is still paying a $3 late fee for Jurassic Park they forgot to return in 2002. But seriously, Blockbuster’s downfall is a stark reminder: if you don’t move with change, you might just become extinct.

On the flip side, Netflix perfectly illustrates the benefits of adapting early and decisively. Reed Hastings, Netflix’s co-founder, had the foresight to realize that DVD rentals had a limited shelf life. Despite initial resistance and risks, Hastings shifted the company’s focus to streaming, fundamentally changing its business model.

At the time, this decision was met with skepticism—even from within Netflix. The streaming infrastructure was expensive to build, and internet speeds were slow in many areas. But Hastings understood that change isn’t about waiting for the perfect moment; it’s about positioning yourself for the future, even if the present is still a little shaky. By embracing streaming early on, Netflix not only survived the shift to digital but became a leader in the entertainment industry.

It’s important to remember that Reed Hastings didn’t just roll out streaming without a plan. Netflix started by transitioning gradually, offering both DVD rentals and streaming services, testing their new model before making a full shift. This adaptability allowed Netflix to learn from its mistakes, fine-tune its approach, and eventually phase out DVDs entirely once streaming proved successful.

 Another inspiring example is IBM’s pivot in the 1990s. Known primarily for its hardware, IBM faced a harsh reality: hardware was becoming a commodity, and profit margins were shrinking. Recognizing that the old model wasn’t sustainable, then-CEO Lou Gerstner made the bold decision to pivot IBM’s focus from hardware to services, specifically IT consulting. This shift required IBM to overhaul its identity, realign its workforce, and invest heavily in retraining.

Imagine the challenges that came with this change. Gerstner wasn’t just asking people to sell new products; he was asking them to embrace a completely new way of thinking about IBM’s role in the tech world. For many long-time employees, it was a tough transition, but Gerstner communicated the necessity of the shift clearly and often, highlighting the risks of staying the course versus the opportunities that lay ahead.

Thanks to Gerstner’s leadership, IBM not only survived but thrived, repositioning itself as a leader in IT consulting and services. Today, IBM’s consulting division is one of its most profitable arms, and its shift from hardware to services is now considered one of the most successful transformations in corporate history. Like Haw in Who Moved My Cheese?, IBM adapted and found new opportunities.

 But it’s not always a success story. Nokia, once the leader in mobile phones, found itself in a similar position as Blockbuster. The smartphone revolution was underway, and Apple’s iPhone had just redefined the market. But Nokia, like Hem in Who Moved My Cheese?, resisted adapting to the new trend. They continued to focus on traditional phones while competitors moved toward touchscreen smartphones. By the time Nokia attempted to pivot, Apple and Android had already captured the market.

What Nokia’s story shows us is that failing to change in time can lead to massive setbacks, even for market leaders. Their initial reluctance to embrace the smartphone era cost them their position, and although they later adapted, the market had moved on. Today, Nokia is a far cry from the industry leader it once was, and its struggle to adapt has become a key lesson for tech companies around the world.

Somewhere out there, a loyal Nokia fan is still swearing by their indestructible phone from 2005. And hey, while it might still work, Nokia’s example reminds us that durability isn’t enough in a world that’s constantly changing. You have to adapt, or you risk getting left behind.

 So, what’s the big takeaway here? Change is challenging because it forces us to move beyond our comfort zones and embrace the unknown. But as we see in these examples, companies that accept and adapt to change—like Netflix and IBM—can create incredible opportunities for growth. Meanwhile, companies that resist, like Blockbuster and Nokia, risk becoming relics of the past.

The phases of leading change

So, we’ve discussed why change is necessary, but how do you actually go about leading a successful transformation? In Leading Change, John Kotter lays out an 8-step process that has become the gold standard for driving effective change. One of the most crucial steps in Kotter’s model is establishing a sense of urgency. Without urgency, people are likely to ignore the need for change, stick to what’s comfortable, and wait for things to blow over.

A powerful example of this is Satya Nadella’s transformation of Microsoft. When Nadella took over as CEO in 2014, Microsoft was stagnating, clinging to old business models that had started to lose relevance. Nadella immediately communicated that Microsoft had to shift from a ‘know-it-all’ to a ‘learn-it-all’ culture if it wanted to stay competitive in the tech industry.

Nadella didn’t just talk about change; he created urgency by backing up his words with bold actions. He took the surprising step of partnering with long-time competitors, like Apple, to make Microsoft Office available on iOS and Android. This showed employees and stakeholders that Microsoft’s future wasn’t in clinging to old rivalries but in embracing a collaborative, growth-oriented mindset.

This urgency wasn’t just felt in the boardroom—it trickled down to every department, sparking a shift in how Microsoft operated. And it worked. Today, Microsoft is a leader in cloud computing and one of the most valuable companies in the world, largely because Nadella understood and implemented Kotter’s principle of urgency.

After creating urgency, Kotter emphasizes the need to build a guiding coalition—a group of change champions who will help drive the transformation. These are individuals with enough influence to rally others and promote the vision of change throughout the organisation.

Let’s look at Ford’s turnaround under Alan Mulally as an example of this step in action. When Mulally became CEO in 2006, Ford was facing significant financial losses. One of his first moves was to assemble a guiding coalition of leaders from various departments. He needed a team that believed in his vision of ‘One Ford,’ which focused on unity and collaboration rather than internal competition.

Mulally’s coalition wasn’t made up of yes-men; they were leaders who believed in the change and were willing to challenge old practices. Every week, Mulally held ‘Business Plan Review’ meetings where everyone in the coalition openly shared updates and problems. This transparency helped create trust, align the team around a common goal, and reinforce the urgency of Ford’s situation.

The guiding coalition at Ford helped Mulally implement a series of major changes that led to one of the most remarkable turnarounds in automotive history. They reduced costs, refocused the product line, and built a collaborative culture that replaced the previous siloed mindset.

Next, Kotter stresses the importance of forming a strategic vision and initiatives. This vision needs to be clear and compelling, and the initiatives must outline the specific actions that will make the vision a reality. A clear vision provides direction and keeps everyone focused, especially when the going gets tough.

 A great example of this is IBM’s ‘Emerging Business Opportunities’ (EBO) initiative in the 2000s. IBM had successfully shifted from hardware to services in the 1990s, but the company needed a new vision to maintain growth. CEO Sam Palmisano implemented the EBO strategy, which focused on investing in emerging technology areas like artificial intelligence, cloud computing, and cybersecurity.

Each EBO had a dedicated team and was run like a startup within IBM, allowing it to be agile while still aligned with the company’s broader vision. By supporting these new business initiatives, IBM was able to pivot yet again and remain a leader in technology. Today, those same initiatives in AI and cloud are among IBM’s most profitable segments.”

The lesson here is that a strong vision combined with actionable initiatives gives a change effort structure. It’s not enough to say, ‘We need to innovate.’ You need to identify exactly where and how you’re going to do it.

Even with a great vision, if people don’t understand or support it, change efforts will stall. Kotter’s fourth step, communicating the vision for buy-in, emphasizes that the message must be clear, consistent, and repeated often.

Consider Apple’s reinvention under Steve Jobs when he returned in 1997. Apple was close to bankruptcy, and Jobs needed buy-in from employees, investors, and customers to save the company. He delivered a clear and simple vision: ‘Think Different.’ This wasn’t just a catchy tagline; it embodied Apple’s approach to innovation and set the stage for groundbreaking products like the iMac, iPod, and eventually the iPhone.

Jobs communicated this vision constantly, from product launches to internal meetings. He aligned Apple’s design, engineering, and marketing teams around the ‘Think Different’ philosophy, and that clarity was one of the key drivers behind Apple’s legendary comeback.

Jobs probably said ‘Think Different’ so many times that it became ingrained in every Apple employee’s subconscious. I can just picture someone walking into work, seeing a coffee machine, and thinking, ‘How can we make it different?’

 So, to recap these crucial phases of leading change: you need to establish urgency, build a guiding coalition, form a strategic vision, and communicate that vision clearly and often. Leaders like Satya Nadella, Alan Mulally, and Steve Jobs all understood these principles and used them to turn their companies around when the stakes were high.

In the next segment, we’ll discuss how to guide your team through the change process and the role of short-term wins in maintaining momentum. Stay with us as we break down Kotter’s remaining steps and learn from real-life leaders who have successfully led their teams through complex transformations.

Guiding your team through the process

LOnce you’ve set the groundwork for change by establishing urgency, building a guiding coalition, forming a vision, and communicating it clearly, the next step is guiding your team through the change process itself. This phase is where Kotter’s principles of empowerment, generating short-term wins, and maintaining momentum come into play.

Let’s start with Kotter’s next step: empowering employees for broad-based action. This is where you give your team the authority and resources they need to contribute to the change effort without unnecessary barriers. Kotter emphasises that to drive meaningful change, you need to remove obstacles—whether that’s outdated policies, restrictive hierarchies, or even specific individuals who are resistant to the change.

A great example of this comes from Nordstrom, the retail giant known for exceptional customer service. Nordstrom has a famous policy that essentially boils down to ‘Use good judgment in all situations.’ This freedom gives employees the autonomy to make decisions on the spot to serve customers better, whether that’s handling a return outside of policy or finding a unique solution to a customer’s problem.

By empowering employees to act in real time, Nordstrom was able to create a service-driven culture where change and improvement became part of the company’s DNA. Instead of micromanaging, Nordstrom trusts its people to make decisions that align with the company’s values and goals.

 If you’re leading a change effort, ask yourself: What obstacles are preventing my team from acting on our vision? Sometimes, the simplest tweaks—like giving employees more decision-making power or cutting down on approval layers—can have a massive impact on how quickly your team adapts and contributes to the change.

 The next critical step is generating short-term wins. In any change process, there will be skeptics. Short-term wins are vital for proving that the change is working, building momentum, and turning doubters into believers. Kotter recommends looking for achievable goals early on to show tangible progress and keep morale high.

 One classic example is General Electric’s ‘Work-Out’ program, which was implemented under Jack Welch in the 1980s. GE was facing operational inefficiencies, so Welch introduced the ‘Work-Out’ program to streamline processes and remove unnecessary bureaucracy. Each department was given a short-term challenge to address a specific inefficiency, and employees were encouraged to propose and implement their own solutions.

These short-term wins not only improved processes but demonstrated the effectiveness of Welch’s new direction, building buy-in across the company. By empowering employees to own these wins, GE fostered a culture of continuous improvement and showed that real change was happening.

 Short-term wins don’t have to be groundbreaking; they just have to be visible and meaningful. They provide the proof that change is happening and keep people engaged in the process.

Think of it like a diet. If you’re not seeing any results after a month, it’s easy to give up. But if you start noticing a difference after the first week, you’re more motivated to stick with it. Wins—no matter how small—give people that same ‘I can do this’ feeling.

Once you have short-term wins, the next step is sustaining acceleration. This means building on the momentum of those early successes to push the change even further. Kotter warns against declaring victory too soon, as this can cause the organization to revert to old habits. Instead, leaders should keep the pressure on, using each win as a stepping stone toward bigger goals.

A great example of sustaining acceleration is Apple’s approach to product innovation. After the success of the iPod, Apple didn’t stop and rest on its laurels. Instead, Steve Jobs used the momentum from the iPod to fuel the development of the iPhone, and later the iPad, each building on the success of the previous product.

Apple’s leadership understood that one success doesn’t mean it’s time to slow down. In fact, each new product launch only increased Apple’s urgency to keep innovating. By sustaining acceleration, Apple not only maintained its position as an industry leader but became one of the most valuable companies in the world.

 The key takeaway here is that change isn’t a one-and-done effort. Celebrate the wins, but use them to fuel bigger objectives. Leaders should keep pushing forward, continuously setting new goals to prevent the organization from slipping back into complacency.

 Finally, Kotter’s last step: anchoring new approaches in the organization’s culture. Lasting change only happens when the new behaviours become part of the organizational culture. This means that the principles driving the change need to be embedded in day-to-day activities, hiring practices, and even in how success is defined.

 Going back to Satya Nadella’s work at Microsoft, he didn’t just implement a few surface-level changes and call it a day. Nadella worked to embed a ‘growth mindset’ deeply into Microsoft’s culture. From hiring practices to performance reviews, the company shifted its focus to encourage curiosity, continuous learning, and collaboration. This cultural shift was reinforced at every level of the company, and it became part of Microsoft’s identity.

Today, Microsoft’s growth mindset approach is seen in everything from its embrace of open-source platforms to its strategic partnerships with other tech giants. Nadella’s changes weren’t just a passing phase; they were built into Microsoft’s DNA, ensuring that the company’s transformation was sustainable over the long term.

 The lesson here? If you want change to last, it has to go deeper than processes or policies. It has to become ‘how we do things around here.’ This step requires patience, persistence, and a commitment to leading by example.

 So, to recap: guiding your team through change requires empowering your employees to take action, generating short-term wins to build momentum, sustaining acceleration to prevent backsliding, and finally, anchoring new approaches into your culture. Whether you’re leading a transformation in a tech company like Microsoft or streamlining operations like GE, these principles can help you create change that sticks.

 In the final segment, we’ll wrap up with a summary of today’s insights and some actionable takeaways for leading your own change initiatives. Stay tuned.

Actionable strategies for leading change

 Now that we’ve discussed Kotter’s process and seen how companies like Microsoft, GE, and Apple have used these principles to navigate change, let’s talk about some actionable strategies for leading change in your own organization. Here are four key strategies to help you guide your team effectively through any transition.

1. Create a Compelling Sense of Urgency. We can’t overstate the importance of creating a sense of urgency. It’s the first step in Kotter’s model and sets the entire change effort in motion. People need to understand not only that change is happening, but why it’s critical to adapt. Use data, industry trends, and competitor examples to paint a clear picture of what’s at stake.

 When Netflix began its shift from DVDs to streaming, Reed Hastings used data to make the case for change. He showed the leadership team and employees that consumer behavior was shifting towards digital consumption and that physical rentals had a limited future. By backing up his vision with data, Hastings made the urgency of the change clear. It wasn’t just a new direction; it was necessary for survival.”

Try using a ‘change story’ to explain the urgency to your team. For instance, outline how trends in your industry or shifts in consumer behavior might impact your company if it doesn’t adapt. When people can see the bigger picture, they’re more likely to buy into the need for change.

2. Build and Empower a Guiding Coalition. Next, build a guiding coalition—a group of influential team members who believe in the change and can advocate for it within their departments. But don’t just pick the most senior people; select individuals who are respected, have strong interpersonal skills, and can inspire others to rally around the change.

 When Alan Mulally led Ford’s turnaround, he handpicked a coalition of leaders across various departments to act as champions of his ‘One Ford’ vision. Mulally empowered them to make decisions, engage their teams, and drive change within their areas. By focusing on transparency and building trust with this coalition, Mulally created a network of advocates who could help steer Ford’s transformation from the ground up.

 Identify key influencers within your organization and bring them on board early in the change process. Give them the resources and authority they need to champion the change within their teams. When people see respected colleagues actively supporting the change, they’re more likely to get on board themselves.

3. Communicate the Vision Consistently. Effective communication is essential for any change effort to succeed. People need to hear the vision repeatedly and in different ways. The message shouldn’t just come from the top; it should be communicated consistently across all levels of the organization. And remember, clear, relatable language works best.

When Salesforce began its shift from traditional software to cloud-based services, Marc Benioff communicated the vision tirelessly. He held town halls, sent regular company-wide updates, and spoke at every opportunity about how cloud computing would revolutionize business. By communicating the vision consistently, Benioff kept his team focused on the goal, and Salesforce became a leader in the cloud industry.

Consider implementing multiple channels to communicate the vision, like weekly update emails, open Q&A sessions, and regular team meetings dedicated to the change process. People often need to hear a message multiple times before it resonates, so don’t be afraid to repeat it often and use real examples to make it relatable.

4. Generate and Celebrate Short-Term Wins. Kotter’s principle of generating short-term wins is critical for keeping momentum. By achieving small, visible successes early on, you show your team that the change effort is working. Short-term wins validate the vision and build confidence, making people more willing to stick with the change.

When Adobe shifted from selling software licenses to a subscription model, it faced significant pushback. To build momentum, Adobe set incremental goals to measure the transition’s success. For instance, Adobe celebrated early wins like hitting subscription milestones and receiving positive customer feedback on the Creative Cloud’s accessibility and updates. These small victories helped Adobe demonstrate the value of the new model, winning over both employees and customers.

Break down your change initiative into smaller goals and celebrate each win along the way. Even simple acknowledgments—like a team shout-out or a company-wide email recognizing the progress—can have a big impact. The goal is to keep morale high and remind your team that progress is being made.

 And don’t underestimate the power of a celebration! Sometimes, a little acknowledgment and maybe even some cupcakes can work wonders. Nothing says ‘great job’ quite like frosting!

5. Anchor New Approaches in Culture. Lastly, Kotter emphasises that true change happens when new behaviours are anchored in the organization’s culture. For change to stick, it must become part of ‘how we do things here.’ This means integrating the new approach into hiring practices, performance reviews, and day-to-day decision-making.

When Satya Nadella took over at Microsoft, he embedded the concept of a ‘growth mindset’ into every facet of the company. This wasn’t just a slogan; it shaped hiring practices, leadership development, and even how success was measured. By making a growth mindset part of the culture, Nadella ensured that the change was more than just a passing trend—it became central to how Microsoft operated and innovated.

Think about ways to embed the new approach into your organization’s core practices. Maybe that means updating your company’s values statement, rewarding behaviours that align with the change, or including new criteria in performance evaluations. The more your team sees the new approach reinforced, the more natural it becomes.

So, to recap these strategies: create urgency by showing the real need for change, build a guiding coalition to support and champion the vision, communicate the vision consistently so it resonates at every level, celebrate short-term wins to keep morale high, and finally, anchor new approaches in your culture so the change becomes lasting.

In our final segment, we’ll bring together all of today’s insights and give you a few challenges to start implementing these strategies in your own leadership journey. Stay tuned!

Closing

 Alright, as we wrap up today’s episode on Leading Through Change, let’s take a moment to recap the strategies we’ve explored. Leading change isn’t just about having a vision; it’s about executing that vision thoughtfully and bringing your team along every step of the way. Kotter’s model gives us a powerful roadmap to do exactly that.

So what are the Key Takeaways from this Episode.

1. Create Urgency: If people don’t feel a pressing need to change, they’re less likely to act. Use data, stories, and tangible examples to show why staying still isn’t an option. Like we saw with Netflix and Microsoft, creating urgency can be the difference between stagnation and transformation.

2. Build a Guiding Coalition: Change champions help drive momentum, rally support, and troubleshoot obstacles. Alan Mulally’s coalition at Ford showed us how powerful it can be when a group of motivated individuals pushes change forward.

3. Communicate the Vision Consistently: People need to hear the vision again and again. The success of Salesforce’s transition to cloud services is a testament to the importance of clear, relentless communication, and of reinforcing the vision at every level.

4. Generate and Celebrate Short-Term Wins: Early wins keep morale high and help silence the skeptics. Adobe’s shift to subscription-based software succeeded partly because the company took time to recognize milestones along the way, making the end goal feel achievable and real.

5. Anchor New Approaches in Culture: Change sticks when it becomes part of ‘how we do things here.’ Satya Nadella’s cultural shift at Microsoft transformed the company’s mindset, setting the stage for a more innovative, collaborative future…

 So, what can you do starting today? If you’re leading a change initiative, pick one of these strategies and start putting it into practice. Maybe it’s creating a sense of urgency by gathering data that shows why the change is necessary, or maybe it’s building a guiding coalition with people who can help drive momentum.

 Remember, successful change isn’t about a single big move; it’s about consistent actions that build up over time. As we saw with Apple, Netflix, and Microsoft, true transformation happens when leaders commit to the process, communicate openly, and keep the momentum going. Change might feel messy and uncertain, but as Kotter’s model shows, it’s absolutely possible to guide your team through it with the right approach.

 And remember, change is hard for everyone! Just think of the last time your favourite coffee shop changed its menu or moved the creamers to a different counter. If that tiny change can throw off your morning routine, imagine how a whole organization feels! So be patient with your team—and with yourself—as you navigate this journey.

 As we close, I’d love to hear from you. Have you led a change effort in your organisation? What challenges did you face, and what strategies helped you succeed? Share your experiences in the comments or tag us on social media with the hashtag The Business Book Club. Your insights might be exactly what someone else needs to hear!

Thanks for joining me on the  Leadership Unpacked.  In the next episode, we’re exploring Building Resilience in Teams, with insights from Option B by Sheryl Sandberg and Adam Grant. If you’ve ever wondered how to keep your team strong and engaged through setbacks, this episode is for you. Don’t miss it.

Until next time, remember that leading through change is about more than just strategy—it’s about connecting with your team, inspiring them, and giving them the tools to succeed. Thanks for listening to Leadership Unpacked.