Leading Change: Step Two—Build a Guiding Coalition

Urgency Starts the Change. A Guiding Coalition Gives It the Power to Survive.

In the first article in this series, “Leading Change—Step One: Create a Sense of Urgency,” we examined Dr. John Kotter’s first requirement for successful organizational transformation.

People must understand why change is necessary now.

That first step creates momentum.

But urgency by itself does not change an organization.

Someone must convert that urgency into coordinated action.

That is the purpose of Step Two in Kotter’s Eight-Step Process for Leading Change: Build a Guiding Coalition.

Kotter’s current methodology describes the guiding coalition as a committed group that helps guide, coordinate, and communicate the change effort. His broader research emphasizes that major transformation cannot realistically be driven by one executive acting alone. Successful change requires a credible team with enough authority, influence, expertise, trust, and commitment to move the organization forward.

The central idea is simple:

Major change requires more leadership capacity than one individual can provide.

A CEO can announce a transformation.

A superintendent can approve one.

A Chief Audit Executive can recommend one.

A Board can authorize one.

But meaningful organizational change requires a group of respected people who are willing to lead it together.

Why One Strong Leader Is Not Enough

Organizations frequently personalize change.

A new CEO arrives.

A superintendent announces a turnaround.

A Chief Information Officer launches a digital transformation.

A Chief Audit Executive introduces a new audit methodology.

The initiative becomes identified with one person.

That creates risk.

If employees believe the initiative belongs only to the CEO, they may simply wait for the CEO’s attention to move elsewhere.

If a superintendent is the only visible advocate, middle management may quietly resist.

If an Internal Audit transformation depends entirely on the Chief Audit Executive, adoption may stop when that person leaves.

A single executive also has practical limitations.

One person does not possess:

• Expertise in every process

• Influence in every department

• Credibility with every stakeholder

• Time to resolve every obstacle

• Access to every informal communication network

Kotter’s guiding coalition addresses that weakness.

Successful large-scale change tends to be led by a team rather than a single charismatic executive. Kotter has emphasized that the team must possess the right composition, trust, shared objective, and sufficient credibility to demonstrate that the change really matters.

A Guiding Coalition Is Not Just Another Committee

This distinction is important.

Organizations already have plenty of committees.

They often include:

• Steering committees

• Advisory committees

• Executive committees

• Project committees

• Governance committees

• Task forces

Many accomplish very little.

A committee may meet once a month, review a status report, discuss problems, and adjourn.

That is not necessarily a guiding coalition.

A true guiding coalition exists to lead the change.

Its members:

• Advocate for the change.

• Make decisions.

• Remove obstacles.

• Influence others.

• Solve cross-functional problems.

• Challenge resistance.

• Communicate consistently.

• Hold one another accountable.

• Maintain momentum.

The coalition is not an audience receiving project updates.

It is part of the leadership mechanism driving the transformation.

Who Belongs in the Guiding Coalition?

One of the biggest mistakes leaders make is assuming the coalition should simply consist of the senior management team.

Sometimes that works.

Often it does not.

Kotter’s modern framework explicitly recognizes the value of committed people emerging from across the organization, not merely the formal hierarchy.

An effective coalition may include:

• Senior executives

• Operational managers

• Subject-matter experts

• Respected supervisors

• Informal leaders

• High-performing employees

• Technology specialists

• Risk and compliance professionals

• Internal Audit

• Finance

• Human Resources

• Customer-facing personnel

The exact membership depends on the change.

If the organization is implementing Artificial Intelligence, the coalition may need people from:

• Executive management

• IT

• Cybersecurity

• Legal

• Compliance

• Internal Audit

• Human Resources

• Operations

• Finance

• Data governance

If the organization is restructuring its procure-to-pay process, the coalition may need:

• Procurement

• Accounts Payable

• Treasury

• Operations

• IT

• Internal Audit

• Business-unit leadership

The right coalition represents the parts of the organization that must actually make the change work.

Formal Authority Is Only One Type of Power

Organizational charts identify formal authority.

They do not necessarily identify influence.

Every organization has employees whom others listen to even though they hold modest titles.

They may possess:

• Deep institutional knowledge

• Technical expertise

• Long-standing relationships

• Personal credibility

• Informal leadership

• Trust among employees

These people matter enormously during change.

Suppose management introduces a major new technology platform.

The Vice President may publicly endorse it.

But employees may really want to know:

“What does Maria in Accounting think?”

If Maria has been with the company for 20 years and everyone trusts her judgment, her support may influence adoption more than another executive memorandum.

A strong guiding coalition therefore combines formal authority with informal influence.

Four Capabilities a Guiding Coalition Needs

Kotter’s original work emphasized several characteristics of effective guiding coalitions. In practical terms, organizations should think about four broad capabilities.

Position Power

Does the group include enough people with formal authority that opponents cannot easily block the effort?

Someone must be able to:

• Approve resources

• Change policies

• Adjust priorities

• Resolve cross-functional conflicts

• Hold managers accountable

A coalition without authority becomes an advisory group.

Expertise

Does the coalition understand the organization and the issue?

It may need expertise in:

• Operations

• Finance

• Technology

• Risk

• Customers

• Regulation

• Human behavior

A leadership group consisting only of senior executives may possess significant authority but inadequate technical knowledge.

That can produce poor decisions.

Credibility

Do employees respect the people leading the change?

Employees evaluate whether coalition members:

• Keep commitments

• Understand operations

• Tell the truth

• Treat people fairly

• Produce results

A coalition filled with individuals employees do not trust may actually increase resistance.

Leadership

Does the coalition contain people capable of leading rather than merely administering?

Management can organize:

• Budgets

• Schedules

• Reports

• Meetings

Leadership requires:

• Vision

• Influence

• Courage

• Communication

• Judgment

• Persistence

Major transformation requires both.

Diversity of Perspective Matters

One of the easiest ways to weaken a guiding coalition is to fill it with people who all think alike.

A diverse coalition can identify risks and resistance earlier.

Diversity may include differences in:

• Function

• Seniority

• Technical background

• Geography

• Customer exposure

• Tenure

• Professional discipline

The objective is not diversity for appearance.

It is decision quality.

A technology transformation led entirely by technologists may underestimate:

• Employee training

• Regulatory concerns

• Workflow changes

• Control requirements

• Customer impact

An accounting transformation led entirely by accountants may underestimate operational consequences.

Change crosses organizational boundaries.

The coalition should as well.

The Coalition Must Actually Believe in the Change

One reluctant executive can undermine an entire transformation.

Some leaders publicly support a project because they believe they are expected to.

Privately, they may believe:

• The change is unnecessary.

• The prior system was better.

• The initiative threatens their authority.

• The investment is excessive.

• Another leader is using the project to gain influence.

Employees quickly detect those inconsistencies.

A manager who says:

“Of course I support the transformation.”

and then refuses to assign employees to the project communicates the true message.

Coalition members do not need to agree on every detail.

They do need genuine agreement that:

• Change is necessary.

• The direction is credible.

• The effort deserves resources.

• Members will support decisions publicly.

• Internal disagreements will not become organizational sabotage.

Trust Is the Operating System of the Coalition

A coalition can possess tremendous technical expertise and still fail if the members do not trust one another.

Without trust:

• Information is withheld.

• Difficult issues are avoided.

• Departments defend themselves.

• Political alliances form.

• Decisions are revisited.

• Mistakes are concealed.

The coalition must become a team.

Members should be able to say:

“This approach is not working.”

without fearing retaliation.

They should be able to challenge assumptions.

They should be able to admit mistakes.

Trust does not mean avoiding disagreement.

It means disagreement can occur without destroying cooperation.

Beware of Departmental Representation

A coalition can become dysfunctional when members believe their job is to defend their department.

The CFO protects Finance.

The CIO protects IT.

The HR leader protects Human Resources.

The Operations leader protects Operations.

Meetings become negotiations among competing interests.

The coalition’s primary responsibility should be to the organizational objective, not the functional silo.

Members should ask:

“What is best for the transformation?”

rather than:

“How do I protect my department?”

This is difficult.

It is also essential.

Define the Coalition’s Authority

Change initiatives often struggle because nobody knows what the coalition can actually decide.

Questions should be answered early:

• Can it reallocate resources?

• Can it change procedures?

• Can it stop competing initiatives?

• Can it require departmental participation?

• Can it escalate resistance?

• Can it recommend structural changes?

• Who resolves issues the coalition cannot resolve?

Without clear authority, the coalition may identify problems repeatedly without being able to solve them.

That destroys credibility.

Give the Coalition Real Information

The guiding coalition cannot lead effectively when information is filtered.

It needs access to:

• Performance data

• Financial information

• Project metrics

• Employee feedback

• Customer feedback

• Risk information

• Audit findings

• Implementation issues

• Emerging problems

Bad news must travel quickly.

Leaders should be especially concerned when status reports remain consistently positive while employees describe serious problems.

A coalition cannot govern what it cannot see.

The Role of Internal Audit in the Guiding Coalition

Internal Audit occupies a complicated position.

It can provide enormous value to transformation initiatives through:

• Risk assessment

• Control expertise

• Governance insight

• Independent analysis

• Process knowledge

• Root-cause analysis

But Internal Audit must protect its independence.

The function should generally avoid assuming management responsibility for the change.

Internal Audit may:

• Advise

• Facilitate risk discussions

• Provide control guidance

• Evaluate governance

• Monitor risks

• Provide assurance

It should be careful about:

• Owning implementation

• Selecting management solutions

• Approving operational decisions

• Becoming accountable for project success

The guiding coalition may benefit from Internal Audit’s participation, but the Chief Audit

Executive should clearly define the function’s role.

Example: Building a Coalition for AI Transformation

Consider an organization adopting Artificial Intelligence throughout its audit and finance functions.

A weak implementation might be led only by the CIO.

That creates immediate problems.

The CIO understands technology.

But what about:

• Confidentiality?

• Audit evidence?

• Data governance?

• Professional standards?

• Human Resources implications?

• Legal requirements?

• Employee resistance?

• Cybersecurity?

A stronger guiding coalition might include:

• Chief Audit Executive — audit methodology and assurance.

• CIO — technology infrastructure.

• CISO — cybersecurity.

• General Counsel — legal and confidentiality issues.

• Compliance Officer — regulatory requirements.

• CFO — finance use cases.

• Human Resources — workforce impact.

• Operational Leader — actual business applications.

• Experienced Auditor — frontline user perspective.

Now the change is not simply an IT initiative.

It is an organizational transformation.

Example: Financial Restructuring in a School District

Suppose a school district faces:

• Declining enrollment

• Reduced revenue

• Underutilized facilities

• Declining reserves

• Rising employee costs

The superintendent cannot solve the problem alone.

A credible guiding coalition might include:

• Superintendent

• CFO

• Governing Board leadership

• Academic leadership

• Operations

• Facilities

• Human Resources

• Internal Audit

• School principals

• Community representatives

Why?

Because financial restructuring affects:

• Staffing

• Facilities

• Academic programs

• Transportation

• Community relationships

• Employee morale

A purely financial team may develop mathematically correct recommendations that are impossible to implement.

A stronger coalition incorporates operational reality.

The Coalition Must Be Small Enough to Work

There is also a danger in making the coalition too large.

A 35-person steering committee may provide excellent representation.

It may make terrible decisions.

Large groups often produce:

• Slow discussion

• Unclear accountability

• Consensus paralysis

• Political positioning

The core guiding coalition should be small enough to:

• Meet frequently

• Make decisions

• Build trust

• Hold members accountable

Broader stakeholders can participate through advisory groups, workstreams, or the larger volunteer network that Kotter addresses in later steps.

The guiding coalition is the leadership core.

Establish Operating Rules

Effective coalitions should establish expectations immediately.

For example:

• Attend meetings.

• Prepare before meetings.

• Share information.

• Raise problems early.

• Challenge ideas, not people.

• Support agreed decisions.

• Keep commitments.

• Avoid side negotiations.

• Protect confidential information.

• Escalate unresolved risks.

These rules seem obvious.

They are rarely obvious in practice.

Measure Coalition Effectiveness

Organizations often measure the implementation but never measure whether the leadership team itself is functioning.

Questions should include:

• Are decisions occurring quickly enough?

• Are departments cooperating?

• Are unresolved issues accumulating?

• Are members attending?

• Are commitments being completed?

• Are employees receiving consistent messages?

• Is resistance being addressed?

• Are members challenging one another constructively?

If the coalition itself is dysfunctional, the transformation will eventually reflect that dysfunction.

Warning Sign: The Coalition Is All Management

An all-management coalition can suffer from groupthink.

Employees may perceive it as another top-down initiative.

Adding respected frontline leaders can provide:

• Practical insight

• Credibility

• Early warning about resistance

• Better communication

Employees often tell peers things they will never tell executives.

That information can significantly improve implementation.

Warning Sign: The Coalition Has No Skeptics

A group consisting entirely of enthusiastic advocates can also be dangerous.

Constructive skeptics can ask:

• What assumptions are we making?

• What could fail?

• What unintended consequences might occur?

• What are employees actually saying?

• Are the expected savings realistic?

The objective is not to include people committed to stopping the change.

It is to include people willing to challenge the plan honestly.

A coalition needs constructive dissent, not blind agreement.

Warning Sign: Senior Leaders Send Substitutes

Nothing communicates low priority faster than executives repeatedly sending representatives.

If a senior leader belongs to the guiding coalition, that individual should participate.

Sending a substitute communicates:

“This project is not important enough for my time.”

Employees notice.

Other executives notice.

The coalition loses credibility.

Warning Sign: Nobody Can Explain Who Is Accountable

Collective leadership does not mean collective ambiguity.

Each major issue should have an owner.

For example:

• Technology — CIO

• Workforce transition — HR

• Financial modeling — CFO

• Communications — designated executive

• Risk monitoring — risk function

• Assurance — Internal Audit

The coalition coordinates.

Individuals execute.

Step One and Step Two Must Work Together

The first two steps reinforce each other.

Step One: Create urgency

People understand why the organization cannot remain where it is.

Step Two: Build the guiding coalition

People see that credible leaders are willing to take responsibility for moving forward.

Urgency without leadership produces anxiety.

Leadership without urgency produces bureaucracy.

Together, they create momentum.

What Successful Step Two Looks Like

You know the organization has built a strong guiding coalition when:

• Credible leaders visibly support the transformation.

• Technical experts trust the leadership team.

• Employees know who is leading the effort.

• Departments cannot easily block the change.

• Difficult information reaches decision-makers.

• Decisions occur quickly.

• Coalition members defend the transformation outside meetings.

• Internal disagreements are resolved constructively.

• Resources follow priorities.

• People begin to believe the change may actually happen.

At that point, the organization is ready for Kotter’s third step:

Form a Strategic Vision and Initiatives.

The coalition now has to answer:

Where are we going?

The Hard Truth About Guiding Coalitions

Executives sometimes resist Step Two because they believe building a coalition reduces their authority.

The opposite is usually true.

A leader who attempts to personally control a major transformation becomes a bottleneck.

A leader who builds a strong coalition multiplies leadership capacity.

The CEO no longer needs to personally convince every department.

The superintendent does not need to resolve every disagreement.

The Chief Audit Executive does not need to train every auditor.

Leadership becomes distributed.

That is how change scales.

The Bottom Line

Step Two in Dr. John Kotter’s Eight-Step Process is Build a Guiding Coalition.

The purpose is not to create another committee.

It is to assemble a group possessing enough:

• Authority

• Expertise

• Credibility

• Influence

• Leadership

• Trust

to move the organization through the transformation.

Successful change is rarely the accomplishment of one heroic leader.

It is the result of a credible group of people who believe in the objective, trust one another, coordinate their actions, communicate consistently, remove obstacles, and refuse to allow the organization to slip quietly back into the status quo. Kotter’s current methodology continues to place the guiding coalition immediately after urgency because committed people are needed to coordinate and communicate the change before the organization develops and mobilizes around the broader vision.

The first step answers:

Why must we change?

The second answers:

Who will lead us through it?

Organizations that cannot answer that second question clearly are not yet ready for transformation.