Effective change management is becoming a vital enabler for supply chain success. In fact, it’s fair to say that the need for change is so prevalent in this age of ecommerce, globalisation and supply volatility that change management can no longer exist merely as a work-stream in the latest project. Instead, the ability to take control of change should be a skill that’s readily available in day-to-day operations and can be called upon at will.
Change Management as a Constant
Unfortunately, many companies still miss this critical element of supply chain strategy, overlooking the importance of change management as a constant need, and even paying it little more than lip service during major projects and programs.
Given that poor adoption of changes and out and out change resistance present significant barriers to progress, change management does not deserve to be sidelined—not ever, nor should it be regarded as something to be owned by the HR department or project managers.
In the supply chain of the 21st century, success will come easiest to those who develop change management as a core competency, embedded into day-to-day operations and facilitated by participative leadership.
The Vital Role of Change Management
There is a very good reason for embedding change management into the operational supply chain environment. As I mentioned at the beginning of this post, supply chains are under pressure to move faster and become more agile, changing frequently to respond to market forces, customer preferences and global competition.
Supply chain operators must constantly review and improve processes, optimise networks, and implement technology to drive agility. However, no such changes are possible without the cooperation of a company’s management team and workforce—the people who really make things happen.
You can’t improve your business simply by implementing better software or re-engineering processes. You can try of course, but if the human factor is not thoroughly addressed, new processes or software are unlikely to deliver their full potential and, as has happened time and again, can even plunge operations into a downward spiral.
On the other hand, by invoking effective change management disciplines and working constantly to create a culture in which progress is not feared, you can position your organisation to thrive in a new commercial world where change truly is the only constant.
Two Prerequisites for Effective Change Management
Change does not just happen, and neither does change management. Certain prerequisites must be met, and a system put in place before your organisation can embed change management into supply chain operations. The two most important prerequisites to work on are:
Leadership Behaviours: Embedded change management requires a leadership approach which minimises the typical “them and us” establishment, in which staff and managers are separated by a cultural chasm. In order to reduce inertia during change, you and your senior colleagues must embrace and drive a participative leadership style.
While there is not space in this post to explore participative leadership in detail, suffice to say that the aim is to involve all employees as decision-makers and change agents. When leveraged effectively, participative leadership:
- Reduces resistance to change and speeds up implementation
- Generates positive morale and cultivates commitment to your company’s vision
- Stimulates creativity by involving staff in the process of idea generation
- Improves employee engagement and retention
The last point is particularly pertinent, since it’s easier to build and maintain a change-friendly culture when staff turnover is low.
Collaboration and Systems Thinking: To embed change management and culture in your organisation, not only is it necessary to bridge the gap between staff, managers and senior leadership, but also to breach functional silos and encourage collaboration across the enterprise.
Awareness of the intricate interdependencies existing in the supply chain should be sharpened to a new degree of acuteness. Change should be initiated through tools, methodologies and techniques which involve cross-functional collaboration, with groups working together to explore how interventions in one area will impact other parts of the operation.
A Change Management Formula
In addition to the right leadership style and a collaborative approach to change, you also need a system for change implementation which is repeatable and can be applied on any scale. A step-by-step methodology will help ensure that change management remains in focus throughout your project timelines, from idea to implementation.
A number of change management models have been freely circulated over the last few decades, such as the 8-step process conceived at the Harvard Business School by John P. Kotter.
Kotter’s model is included here as an example, but feel free to discuss other change management methodologies and approaches with your colleagues or, better still, with executive peers from other supply chain enterprises (this could be an interesting topic to raise at The Supply Chain Leaders Boardroom; the new executive development program brought to you by Logistics Bureau).
Kotter’s 8-Step Change Process:
- Establish a Sense of Urgency
- Identify and discuss opportunities and articulate why they must be capitalised on immediately
- Create a Guiding Coalition
- Establish and empower a group that can lead the change
- Develop a Vision and Strategy
- Generate a vision to direct the change
- Develop strategies to achieving the vision
- Communicating the Change Vision
- Use every available channel to communicate the vision and strategies
- Demonstrate expected behaviour through role-modelling (members of the guiding coalition as the role models)
- Empower Your People to Drive the Change
- Identify and eliminate obstacles
- Change systems or behaviours that conflict with the change vision
- Encourage risk-taking and creative thinking
- Engage employees as partners
- Empower all involved stakeholders to take action
- Pick off Low Hanging Fruit
- Identify and plan to achieve quick and visible wins
- Achieve the wins
- Recognise the people who worked to achieve the wins
- Celebrate success
- Consolidate Gains and Generate Further Change
- Build on credibility gained through the first, easy wins
- Develop people and projects to propagate the change throughout the enterprise
- Embed New Approaches in the Culture
- Articulate the results of change and demonstrate direct links to supply chain performance improvement
- Continue to reinforce new behaviours until they become the standard, and old ways are forgotten
Executives as Change Champions
Most executives, CEOs in particular, worry about how to lead their teams successfully during times of change and transformation.
If you can work with your leadership team, managers, and employees to embed change management into your supply chain operation, you will not need to worry so much. Transitions will be easier and results more sustainable.
Change management is not easy. It requires an investment in management education and most importantly, must be championed constantly by you and your C-Suite colleagues. If you want to keep your company out in front of the competition though, there are few better ways to ensure supply chain agility, resilience, and sustained competitive advantage.
Change Management: Ideas from Your Peers
Are you a champion of change in your supply chain operation? How are other organisations like yours addressing the need for constant and proactive change management? Is your enterprise a leader or a laggard in change-friendly culture development? The best way to answer questions such as these is to talk with your peers.
The Supply Chain Leaders Boardroom is a program which facilitates discussion of leadership challenges and solutions—such as the improvement of change management—among executives with a common desire to achieve best-in-class supply chains. To register your interest and get a seat at the boardroom table, visit our home page and submit your contact details using the simple online form.