Leading Organizational Change
Five Keys to Leading Change Within Your Organization
It's no secret that human beings resist change. Whenever you come into an organization and say, “We're going to do things differently now,” employees get defensive. Their initial response — even if there are obvious performance problems that need to be addressed — is usually “What's wrong with the way we're doing things now?” Whatever their level in the organization, people are habit-driven. This natural human reaction has been well documented in business journals, with most studies still claiming a 60-70 percent failure rate for organizational change projects.1
When companies make the decision to implement supply chain management software across their global operations, there is typically a strong cultural component to this process. Businesses choose to leverage supply chain management solutions to improve performance in a specific capability such as demand forecasting, fulfillment, replenishment, warehouse management, or transportation and distribution. Within those functions, the software will bring huge changes in the way work gets done every day, in individual roles and responsibilities, and in key performance metrics.
The reasons for change are usually obvious: Inventory is piling up. Customer delivery times are long. Forecasts are inaccurate. Profit margins are eroding. Yet, even in the face of these and other symptoms of suboptimal supply chain performance, it is still hard for employees to embrace change.
An established and well-defined change management process can help companies overcome the mentality of “this is the way we've always done it” — and make real changes that dramatically improve their supply chain performance. By getting employees at every level on board with the implementation plan, change management experts can help accelerate the pace of change, while also increasing the scope of results.
Every supply chain improvement effort is unique because every company has its own culture, organizational structure and performance challenges. However, the following five guidelines will help any company integrate its people, processes and technology enterprise-wide.
1. Communicate the plan upfront to key stakeholders.
Every change management engagement should begin with a “foundational alignment” meeting that includes the key stakeholders who will be responsible for successfully implementing the supply chain management solutions. Often these stakeholders represent a variety of job titles, as well as different functions, multiple product lines and diverse regions. By bringing these stakeholders together in one room, the goal is to create alignment and excitement about the changes that will be happening within the business. This meeting is also an opportunity to gain crucial executive support.
In this meeting, change management experts introduce a high-level basis for the change — including benefits to the organization and to individual employees. A detailed explanation of how the implementation will work should be captured in a master change plan document that includes the project's objectives, daily calendar, key process steps, important milestones and deadlines, and individual roles and responsibilities. The document should be interactive and made available online, so that there is 100 percent visibility into not only the reasons for change, but also the real-time progress toward shared goals. If a critical milestone is missed, it is immediately visible to every key stakeholder — and the project can quickly be brought back on track. This document also eliminates the “blame game” that often characterizes change efforts because personal accountability is visible to everyone on the team.
2. Be flexible enough to accommodate user feedback.
Since people are naturally resistant to change — especially when they feel it's been forced upon them — it is essential that the change management process is truly a two-way street. Even though the change management process is backed by proven best practices and process templates, it is typical to experience some push-back when the change plan is introduced. Every company has its own unique “personality” that must be recognized and honored. For example, not every apparel business is created equal. Some are driven by fashion trends and seasonality, while others focus on basic products with more consistent demand trends, and fewer assortment changes from year to year. Obviously, the operational and planning processes that underlie these two very different supply chain models will vary.
Based on “personality” differences like these, it is common to take an 80/20 implementation approach, where approximately 80 percent of the implementation process is focused on installing a common set of algorithms, workflows and metrics that pertain to the relevant solution, and 20 percent is customized to the unique needs of each customer business. This customization recognizes such nuances as unique channel, brand or inventory strategies.
Because it's a common mistake to enforce a change initiative without any degree of flexibility, change management experts should always listen to key stakeholders' concerns before the implementation ever begins. Customers know more about the traditions and personalities of their businesses, and it's the consultants' job to create a customization level that still supports implementation speed and efficiency, while also meeting specialized customer needs.
3. Link today's processes to tomorrow's vision.
It is also important to accommodate stakeholder needs by explaining the new supply chain processes in the context of customers' old ways of doing business. It is possible to encounter a lot of resistance from users if new software-enabled work processes are radically different than their traditional ways of working. For example, if primarily manual processes are being replaced with a high degree of automation, users can be very distrustful of this change because of its sheer scope.
A visual “process map,” in which traditional process steps are mapped to the simpler, more streamlined processes enabled by the software, can help illustrate the process changes. This graphic process-mapping exercise helps align everyone very quickly. Key stakeholders can visually see how the processes are related, and where commonsense improvements are being made. Typically, even reluctant users sign off because now they can understand the real reasons for process changes.
4. Keep the lines of communication open.
While it's critical to communicate the implementation objectives upfront, it is equally important to continue communicating at all levels of the organization as the change rolls out. An employee town hall meeting, scheduled after the change plan is agreed upon, is an ideal way to kick off the change management efforts and let users know what to expect. At this meeting, the executive team stresses the strategic importance of the project, so that everyone feels like part of the transformation. To gauge employees' feelings, a baseline survey — and then follow-up surveys — can be used to make sure the executive team is doing a good job of communicating about the implementation as it progresses.
If these periodic surveys reveal any concerns, questions or resistance among employees, a meeting should be arranged with those employees — whether they represent a certain function, employees with long tenure within the company, or another user group. At this roundtable, employees' concerns, which typically reflect their fear of the unknown effects of change on their own job security, roles within the organization or future responsibilities, can be addressed in a more personal and interactive manner. After these employees are given factual information, their concerns generally subside and they become a committed participant in the change effort.
5. Create champions of change.
To head off the majority of employee concerns, it is essential to create a team of “change champions” who are focused on advocacy. These change leaders are chosen because they are influential, respected people within the affected functions. They receive special training that demonstrates firsthand the benefits of the solutions; they are also the first to test and apply the new software.
Not only do these champions create excitement about what is going on, but they actively answer any questions or concerns. Often, employees are afraid to approach their bosses, but change champions are natural “go to” people who are easy to approach. They play a key role in helping guide the change process along because they are out there in the business every day, talking about the new solutions. They keep the enthusiasm alive and help to lower resistance to change.
Increasing the Speed and Scope of Change
By communicating the reasons for change, as well as implementation progress, companies can support a true cultural transformation. JDA Software's proven change leadership methodology has increased customer results in three areas:
Time after time, JDA has witnessed how a cultural transformation process — based on communication, flexibility, accommodation and openness — has proven its ability to move the entire customer organization toward a more successful future.
Whatever area of the supply chain customers are focusing on, employee buy-in is the invisible foundation for accelerated, far-reaching transformation. Unless key stakeholders understand the strategic reasons for change, are truly committed to embracing new tools and processes, and feel a sense of long-term ownership, supply chain improvement efforts will not deliver their greatest potential impact.
About the Author
Russell Parker is a strategic services senior director at JDA Software. He leads the JDA Change Leadership (JCL) practice and provides JDA’s customers with strategic consulting around leading practices, process re-engineering and business/change transformation. Parker is certified in Prosci ADKAR Change Management practices.