It took this company several months and several drastic adjustments to clean this mess. Several senior managers and executives lost their jobs because they were slow to react.
What follows are the success elements for effective change management (as shown in Figure 1) based on research and my own experience. Using these elements as systematic and comprehensive framework, executives can understand what to expect, how to engage the entire organization in the process, and how to ensure successful supply chain transformation programs.
Executives’ Commitment and Visible Support
Since change is difficult and inherently unsettling, stakeholders will turn to the CEOs and senior management team for direction and answers. The leaders of the organization must embrace change first and then display their commitment and show their support. They must speak with one voice and model the desired behaviors especially since supply chain transformations require intensive cooperation and cross-functional collaboration among executive peers. This would force executives to get out of their comfort zones and their respective areas of responsibility and find time out of their busy daily operation schedule to envision an entire new business.
As a change agent, not having all executives on the same page early on is one of the first challenges I try to address. I typically, for this purpose, schedule 15 minute one-on-one meetings with all executives in my first week on site. Executives reluctant to come aboard and support the transformation program visibly will disrupt the speed of the company’s progress in planning and undermine transformation significantly.
Comprehensive Supply Chain Strategy
Very few companies have a good and documented supply chain strategy. Executives struggle with assessing the current state of the supply chain, and envisioning the new state that is required to support the vision and address current challenges, from technologies and processes to human resources and governance. They also struggle to decide when and where to begin and how to translate the vision into goals, goals into strategies and strategies into process changes and projects.
In addition, the culture of “playing it safe” is another challenge. Companies get used to executing low-risk incremental improvements on the same business environment for an extended period of time, and they become close-minded for drastic improvements, because they do not know how to handle transformation programs and target big results. The scope can be overwhelming.
When companies are in the process of implementing several incremental improvement projects like Six Sigma or Kaizen projects, it will be a challenge to add a large transformation program to the mix targeting the same departments. Companies that try to stuff too much into the organization will clog it causing employees and managers’ capacity to execute to become a choke point unless the projects are prioritized and sequenced correctly.
Comprehensive strategy includes: 1) re-examine/define strategy as changes occur in the global marketplace, 2) translate strategy into prioritized, actionable and practical improvement plans, 3) develop a three-to-five year roadmap that guides the transformation of supply-and-demand capabilities and take planning processes to the next level, 4) highlight how to achieve one or more corporate goals like growth or customer service levels, 5) capitalize on large opportunities for improvement that deliver significant ROI over time, as well as “quick win” operations improvements with a fast payback, 6) eliminate outdated roles and responsibilities, unnecessary activities, and performance metrics that no longer reflect current realities, and 7) align operational processes and metrics across the supply chain to reflect the overarching supply chain strategy.
Articulating the Case for Change