Why Do Supply Chain Transformations Fail - The Case for Change Management

I have been thinking and reading a lot lately about supply chain transformations.  I have also been involved in many of them throughout my career including the integration of a $5bl supply chain with a $10bl supply chain in the durable goods area and the complete redesign of a major automotive service parts supply chain.

What makes a transformation action great and what can cause them to fail?  Obviously, you have to get the "supply chain technicals" correct.  If you are redesigning the network, redesigning the fulfillment methods or moving to modern leading edge technology you will need to get the technicals right.  However, my thesis is this is less than 1/2 of the success criteria.  Once you have this right, the biggest challenge is change management.  You will need to lead an entire company and team into the new environment and if this is not done well, all the technical genius in the world will not make your supply chain transformation work.

I am going to address this in a series of posts and this first post is going to cover the definition of change management.  Daryl Connor in his book "Managing At The Speed of Change" defined it this way:

"Change management is a set of principles, techniques, and prescriptions applied to the human aspects of executing major change initiatives in organizational settings."

For me, the key words for this are the "human aspects" of change.  While we tend to be deep into the technology, more and more supply chain managers are forgetting the human aspects of change. When you try to transform a supply chain (or dare I use the term "disrupt") every person around you is thinking:

1. Why do we have to change?  Everything is working fine now and I like what "is".  Why the change?
2. What is my new role in the new environment?  What skills will I need in this new world?
3. Do we have the fortitude to "stick with it" or is this just another "flavor of the day"?
4. Will this really make us industry leading?
5. Is the rest of the enterprise supporting this change?

There are many methods which you can use to answer these fundamental questions (ADKAR, Kotter etc.) and it almost does not matter which method you use as long as you are honest with yourself and understand the questions above are being asked (whether spoken or unspoken).  I once saw a model for change which displayed the following equation:

E=T*A

Where E=Effectiveness (of the change), T=Technical Aspects and A = Acceptance.  The easiest way to understand this is if A = 0 and T = 100 (Meaning your change is perfectly designed and perfectly implemented however the human acceptance is non existent) the effectiveness of the change will equal 0.  Completely ineffective!

So, given this is there no wonder why most transformations are less than fully effective?  If you are a technical supply chain manager and you are thrilled you got the "technicals" right but you totally forgot about the "A" then your project will fail.  It is that simple. 

Here are some great resources to help with your change management portion of anything whether it be a small project, a larger program or a complete transformation:

The Kotter Change Model

ADKAR

HBR Change Management Resources

1.4 Million Supply Chain Workers needed - Strategy: Keep the Ones You Have

Get ready!  The "War on Talent" is here and it is here to stay.  Fortune published an article titled "Wanted: 1.4 million new supply chain workers by 2018".  We have always discussed the need to develop and nurture talent and now it is getting even more important.

If you are not focusing on how to develop and retain your great talent, you will be forever out in the market trying to recruit new talent.  And that, most often, is a loser's game.  It is much easier to develop what you have then try to assess and acquire what you do not have.  Here are some of my ideas on how to deal with what is becoming a hyper competitive market for talent:

1. Cater to Millennials while at the same time ensuring the "gray hairs" experience is utilized.  I hear a lot about the catering to millennials so I will not rehash this.  I do think though companies have to ensure the more experienced workers have a place.  These people carry years of ideas, experiences and knowledge.  Combine that with the skills of the millennials and you have an unstoppable force.
2. Be customer centric and dare I say - Customer Obsessed.  People love working on customer focused ideas and activities.  People want to grow businesses.  People hate cutting and they hate shrinking.  Be customer obsessed.
3. Make if fun.  I once had a boss who on day one showed me the company values and he actually went out of his way to tell me that "fun" is no where to be found.  "This is a business", he said. it was that moment, day one, that I started to think this was not going to end well.  People have to enjoy what they are doing.  When you hear people say they are "passionate" what they are really saying is they love the blending of their skills and they are having fun using those skills.
4. Invest in your people.  If you do not, someone else will and they will be gone.  Yes, you will have the few times where you send someone to training and they promptly leverage that into a better job somewhere else.  But, don't make everyone who is left pay for that.  Invest, invest and invest.
5. Embrace the "boomerangs".  This is a unique and interesting idea.  Many companies will not entertain bringing a person back who leaves.  I say you should embrace them.  Think of it as an opportunity to say they looked, the grass was not greener and we are welcoming you home.  That will go a long way for your current employees, who probably still have a loyalty to this person and I believe you will have gained an employee for life.   They will have left, learned a lot and now come home.  What great way to acquire talent!

I am sure there are more you may have but just like the easiest customer to get is the customer you already have, the easiest great employee to get is the one who sits right next to you.

Adding to this is an article by Tisha Danehl titled How to Recruit Top Supply Chain and Logistics Professionals.  She has all the right ideas!! 

Ryder Launches Military Veteran Site

Great progress from Ryder Corporation.  I guest blogged on Logistics Viewpoints recently about how great companies will leverage the returning veterans as a great base of fantastic employees.  This week Ryder announced (as reported on Logistics Viewpoints) a new employment website targeted at military veterans. Apparently you can put in your MOS (Military Occupational Specialty) and it will filter to the jobs available for your skill.

Congratulations to Ryder for "getting it" and leveraging the skills of our returning veterans.