| By Patrick Boyle | Principal, Supply Chain Operations | Chainalytics |
Previously in this series, I discussed the need to “Make people aware that change is coming.” Lesson one emphasized the importance of broadly communicating changes before they happen and providing key points clearly so that folks understand. In my initial Blog, I talked about the idea of transformational change, the great value the change management discipline brings and the powerful impact it has when used in conjunction with good project management. I shared that my experience has taught me that without a deliberate approach to change, transformation is fraught with trials. This next installment in my series is around the need for change. People don’t often “get on-board” with a Transformative Change in their business without a compelling reason.
Folks in the Marketing discipline will often talk about “creating need.” There are whole books, educational seminars, and even videos that will educate one on creating a need for the product or service you bring to the marketplace. When a company embarks on a Transformation of the business — whether it be operating model, new technology, significant change in the infrastructure, or their very production and distribution network – helping their whole company understand the need for the changes proves paramount to success. What is the underlying issue? In many previous client projects, I have seen a large focus on cost reduction. One recent client developed a roadmap to execute a new strategic direction focused on improving their next day delivery performance, ultimately enabling their ongoing growth. In addition, there was a compelling change in the reduction of the cost of serving their business. These are good reasons from a leadership perspective, but what about everyone else’s point of view?
There are different things that drive our “connection” to a change program coming through our company. For some folks, it is the idea of knowing that a change can provide better competitive advantage and keep those after your customers at bay. Keeping customers is important, and in some situations, employees will make the connection because they realize this helps the firm gain security. Still for others, the idea of creating growth leads to opportunity for their own personal or professional growth. The key here is learning what will be important to each and every one of your employees and finding a way to personally connect them to the Transformation effort and its success.
One project that I worked on is a bit of a cautionary tale. After a merger of two major market competitors, the client embarked on their first steps toward aligning the organizations by starting with an ERP System Consolidation. In this major effort, the CIO and IT chose the lowest cost system to try to keep costs down. The decision involved transitioning one company to the other’s existing ERP. They did the right thing by moving people into roles that were 100% focused on the project. They also did a good job of communicating the change and began the project by trying to understand the impacts of the change. However, they began to veer off course as they discovered significant systems deficiencies in the basic business requirements that could create havoc for their production facilities, their suppliers, and their customers. They interpreted project team feedback as resistance instead of accepting it as a sincere attempt to head off issues. People who disagreed with the program began disappearing…either fired or moving on because they felt ignored. The timeline became the most important thing driving the project and they began to cut corners.
As a result of being ignored by leadership, along with folks being fired, a “gallows’ humor” developed as the team attitude and there was no central reason that we could reinforce to get them back “on-board.” They saw the system creating more work, the system increased overall cost of administration (even though the IT costs were lower) and no one in leadership valued their opinions on needed upgrades or even the basic system operations. The final results were poor and required over five months of remediation just to close the accounting books. Why? The team had no valid reason to make the change other than IT cost savings…and management did not allow them to connect and own the project because of the timeline. Needless to say…the CIO was replaced and the remediation was complete…at great pain and expense.
Sure, transformation is a program and a project, but one always completed by the people in the organization. In order for any project or program to be successful, a well-founded reason for the change is necessary. The more personal a leader can make the connection to the program for everyone involved – the higher the likelihood of success. You may never get the whole organization behind the change, but if you can get the core of leaders and change agents aligned with a good reason – you will be on the right track toward success. So in the event your organization is planning a transformational change, here is lesson number two: Give your team a good reason for the change and find a way to “connect” them with the new direction. You may want to start with talking to your team in marketing.
Patrick Boyle–a Principal in Chainalytics’ Supply Chain Operations competency–has over 25 years of experience working with manufacturing companies and multiple industries across all of the disciplines of supply chain management, business process redesign and project management. He specializes in ensuring business transformation and team and organizational innovation and alignment. His collaborative leadership style and active continuing education in areas including APICS training, Supply Chain Council’s SCOR Model, PMI PMBOK in Project Management and Prosci Change Management enable him to inspire cross-functional teams to new levels of performance and capability.