Kotter's 8 Steps for Change: A Small Company Example

A Kotter 8 step change model example for a small company looks like this: the owner shows the team why the old way is costing them, forms a small group to lead the change, agrees a one-sentence vision, repeats it constantly, removes the obstacles people hit, celebrates the first quick wins, keeps going until the change is complete, and then builds it into hiring and training so it lasts.

John Kotter designed his model with large organizations in mind, but the logic works at 20 or 200 people. This guide explains each step in small-company terms, walks through a full worked example, and ends with a one-page change plan you can copy.

What is Kotter’s 8-step change model?

John Kotter, a professor at Harvard Business School, first described the model in a 1995 Harvard Business Review article on why transformation efforts fail. In it he wrote that he had watched more than 100 companies try to remake themselves. He then expanded the ideas into the book Leading Change (1996), which became one of the most widely used guides to organizational change.

The original eight stages from Leading Change are:

1. Establish a sense of urgency.
2. Create the guiding coalition.
3. Develop a vision and strategy.
4. Communicate the change vision.
5. Empower broad-based action.
6. Generate short-term wins.
7. Consolidate gains and produce more change.
8. Anchor new approaches in the culture.

Kotter’s firm, Kotter Inc., now uses slightly updated names, such as “enlist a volunteer army” for the communication stage and “sustain acceleration” for stage seven. In his 2014 book Accelerate, Kotter extended the linear eight steps into eight “accelerators” designed to run continuously alongside the normal hierarchy. The core ideas are the same, and the original sequence is still the easiest way to plan a change in a small company.

It helps to group the steps into three phases.

Kotter's 8 steps in three phases

1. 1Prepare (steps 1 to 3)Urgency, a guiding team and a clear vision.
2. 2Engage (steps 4 to 6)Communicate, remove barriers, win early.
3. 3Embed (steps 7 to 8)Keep going and make it the new normal.

How do you apply Kotter’s 8 steps in a small business?

Small companies have real advantages in change: fewer layers, shorter communication lines, and an owner who can make decisions on the spot. They also have specific risks. Everything depends on a few people, there is no spare capacity, and the owner’s habits are the culture. Here is what each step looks like at that scale.

Step 1: Create a sense of urgency

People change when they see that staying the same is riskier than moving. In a small company, urgency should come from facts the team can see: lost customers, complaints, missed deadlines, margins slipping. Share the numbers openly and let people ask questions. Avoid fake urgency, such as a crisis speech without evidence. The team will spot it and discount everything that follows.

Step 2: Build a guiding coalition

A guiding coalition is the small group that leads the change. In a 30-person company it might be four people: the owner, one manager, and two respected people from the front line. Choose for credibility and energy, not job title. The informal opinion leaders, the people others ask for advice, are worth more than another manager.

Step 3: Form a clear vision and strategy

Write the vision in one sentence that a new employee could repeat. “Every customer gets a quote within one working day” is a vision. “Becoming a customer-centric organization” is not. Add a short strategy: the two or three big moves that will get you there.

Step 4: Communicate the vision, again and again

In a small company you can talk to everyone directly, so do it. Explain the vision in a team meeting, then keep repeating it in one-on-ones, in the weekly meeting and in every decision you make. Kotter’s point is that leaders usually under-communicate. Your behavior is the loudest message: if you skip the new process when you are busy, so will everyone else.

Step 5: Remove obstacles and empower action

Ask people what is getting in their way and fix those things fast. Obstacles are often structural: an old approval rule, a missing tool, a target that rewards the old behavior. Sometimes the obstacle is a person who blocks the change. That calls for an honest private conversation, and our guide to difficult conversations at work has scripts for exactly that.

This step is also about authority. People cannot act on a vision if every decision still needs the owner. Our pillar guide on how to delegate tasks effectively explains how to hand over decisions with clear limits.

Step 6: Generate short-term wins

Plan for visible wins within the first few weeks. A win should be real, measurable and clearly linked to the change. Celebrate it publicly and name the people who made it happen. Early wins give the guiding coalition credibility and make it harder for doubters to argue that nothing works.

Step 7: Consolidate gains and keep going

The most dangerous moment is right after the first success. People relax, attention moves elsewhere, and the old habits creep back. Use the credibility from early wins to tackle the harder parts: the remaining processes, the systems, the people who have not yet adopted the change.

Step 8: Anchor the change in the culture

A change is complete when it no longer depends on the people who started it. Build it into hiring questions, onboarding, job descriptions, performance reviews and the measures you discuss every week. Tell the story of why you changed, so new people understand it is “how we work here”.

Kotter 8 step change model example: a 35-person print shop

Here is a hypothetical example to show how the steps connect. It is an illustration, not a documented case.

Imagine a 35-person commercial print shop. Quotes are prepared by email and spreadsheets and often take three or four days. The owner suspects they are losing work to faster competitors. The change: a shared quoting system and a promise to quote within one working day.

Hypothetical example: moving to one-day quotes

	What it looks like here	Time
1. Urgency	Owner shares the list of deals lost last quarter and what customers said about slow quotes	Week 1
2. Coalition	Owner, sales lead, estimator and the most respected press operator	Week 1
3. Vision	Every customer gets a firm quote within one working day	Week 2
4. Communicate	Team meeting, then the vision opens every weekly meeting	Week 2 onward
5. Remove obstacles	Price lists moved into the system; estimator can approve quotes under a set value	Weeks 3 to 6
6. Short-term wins	First ten same-day quotes tracked on a board; first win celebrated	Weeks 4 to 6
7. Consolidate	Extend to complex jobs; retire the old spreadsheet	Months 2 to 4
8. Anchor	Quote speed added to onboarding, job descriptions and the weekly scoreboard	Months 4 to 6

Two things stand out. First, the coalition includes a press operator. She has no formal authority over sales, but her support signals to the shop floor that this is real. Second, the weekly scoreboard turns the vision into something people check every week. Our guide to lead and lag measures explains how to choose a measure like “quotes sent within one day” that the team can influence directly.

Do 70% of change efforts really fail?

You will often read that 70% of organizational change efforts fail. Be careful with that number. In 2011, Mark Hughes of the University of Brighton reviewed five well-known published sources of the claim in the Journal of Change Management. He concluded there was no valid and reliable empirical evidence to support it.

That does not mean change is easy. It means no one has a reliable single failure rate, and you should be skeptical of any presentation that opens with one. For a small company, a more useful question is practical: which of the eight steps are we most likely to skip?

What makes Kotter’s model hard in practice?

The model is simple to describe and hard to follow. In small companies, five problems come up again and again.

The last trap is where Kotter’s model benefits from a partner tool. Kotter tells you the order of the journey. It says less about how to get individuals to adopt specific new behaviors. For that, the six sources of influence give you a detailed diagnosis of motivation and ability at personal, social and structural levels. A practical approach is to run the six-source check during steps 5 and 6.

A second limit is that the model was designed as a top-down sequence. Critics note that real change often loops back, and Kotter himself moved toward more continuous, network-driven change in Accelerate. In a small company, treat the steps as a checklist of things that must be true, and revisit earlier steps when you get stuck.

How do you handle resistance during a change?

Resistance is normal and often useful. People who push back usually know something the plan missed: a customer who will be upset, a step that takes longer than expected, a skill nobody has yet. Treat resistance as information first.

A simple way to sort it is to ask what kind of resistance you are seeing.

• “I don’t understand why.” This is an urgency or communication gap (steps 1 and 4). Share the facts again, in a smaller group, and invite questions.
• “I don’t know how.” This is an ability gap (step 5). Train, pair people up, and simplify the tools before you push harder.
• “I’ll lose something.” People may fear losing status, a familiar routine or even their role. Name the concern openly and be honest about what will and will not change.
• “I don’t trust that this will last.” People have seen past initiatives fade. Only visible short-term wins and consistent behavior from the owner answer this one (steps 6 and 7).

Talk to resistors one to one before you talk about them in public. Ask what worries them and what would make the change work from their point of view. Some of your strongest supporters later will be people who raised hard questions early and saw them taken seriously.

If someone keeps blocking the change after they have been heard, trained and given time, it becomes a performance conversation. Keep it about specific behavior and its impact, not about attitude.

Who should lead change in a small company?

The owner or managing director sets the tone, but should not carry the change alone. Three roles matter.

• The sponsor owns the “why”, protects time and budget, and models the new behavior. Usually the owner.
• The change lead runs the plan week to week, tracks progress and removes obstacles. Often a manager or a capable senior employee.
• The opinion leaders are respected people on the front line whose visible support persuades others.

If you are a new manager asked to lead a change, the first weeks are the time to build relationships and learn the real situation before pushing hard. Our guide to the first 90 days as a new manager covers how to do that without losing momentum.

Keep the change visible in your weekly rhythm. A short review of the change measure in your weekly team meeting keeps it from fading behind daily work.

A one-page change plan you can copy

Fill this in before you announce anything. If you cannot complete a line, that step is not ready.

One-page Kotter change plan

• Urgency: the two or three facts that show why staying the same is risky.
• Coalition: three to six names, including at least one respected front-line person.
• Vision: one sentence a new hire could repeat.
• Strategy: the two or three big moves that deliver the vision.
• Communication: where and how often the vision will be repeated.
• Obstacles: the top three things in the way, each with an owner and a date.
• Short-term wins: two wins we can show within six weeks, and how we will celebrate them.
• Consolidation: what comes after the first wins, and who keeps it going.
• Anchoring: how the change enters hiring, onboarding, reviews and weekly measures.

Summary

Kotter’s 8-step change model, from Leading Change (1996), gives leaders a proven order for change: urgency, coalition, vision, communication, removing obstacles, short-term wins, consolidation and anchoring. In a small company each step is lighter and faster, but none can be skipped. Spend extra time on the first three, plan your early wins, and do not declare victory until the change is built into how the company hires, trains and measures. Pair the model with a behavior-level tool so each person knows what to do differently.

Map the behaviors your change depends on, source by source.