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  Supply Chain Trends and Issues : Our Weekly Feature Article on Important Trends and Developments in Supply Chain Strategy, Research, Best Practices, Technology and Other Supply Chain and Logistics Issues  
 
 
  - January 8, 2008 -  

Managing the Change in Supply Chain Management Initiatives

 
 

A Continuing Challenge for Companies Embarking on New SCM Programs

 
 

 

SCDigest Editorial Staff

SCDigest Says:
Many programs still fall victim to the J-Curve effect, in which there is a big gap between expectations for new initiatives and reality for a long period, before the program finally takes hold in the organization.

What do you say? Send us your comments here

It’s almost become gospel in the past few years that the people side of supply chain management initiatives – or what is often referred to as “change management” – is generally the real barrier to success of new strategies, processes and technology.

Despite the growing attention on change management, it remains a challenge for a high percentage of companies embarking on new SCM programs.

The most recent issue of CSCMP Explores, a publication from the Council of Supply Chain Management Professionals, features an in-depth look at this issue from Russell Kinneberg of Cargill.

The article notes the seminal research by John Kotter of Harvard in the mid-1990s that found, at a corporate level, only 30% of companies attempting to make fundamental changes in the way they did business were successful. We’re not sure what the percentage is for supply chain initiatives today – the increased focus on change management has probably increased the success ratio overall across corporations somewhat – but we would be surprised if it was over 50%.

One problem is that though most now recognize the challenges of change management, they aren’t sure what to do about it. As a result, many programs still fall victim to the J-Curve effect, in which there is a big gap between expectations for new initiatives and reality for a long period, before the program finally takes hold in the organization (see figure below).


 
 
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Change Management Issues are the Leading Cause of the J-Curve Effect

 

“Wouldn’t it be great,” Kinneberg writes, “if you had a method to think through the change, anticipate peoples’ reactions to the change, and have the tools necessary for helping people see the value and embrace the change?”

Numerous Models Exist

Many models for dealing with change have been developed over the years, some specifically in a business context, others at a more personal level that have, in turn, been adapted for business use.

Kotter himself offered a model that has received widespread adoption. Other models include one from Todd Jick, another Harvard academic, and an influential model developed by GE called the Change Acceleration Process (CAP). While all the models are similar in nature, perhaps not surprisingly, the GE CAP model really focused on execution.

The article nearly learns from these previous efforts, and provides a composite model that takes the best from all of them, which it calls the “Ideal Change Management Model.”

The model prescribes an 8-step model, as follows:

  • Identifying the need and urgency for change (the why): Fact-based analysis on problems and opportunities in the marketplace or with respect to competition, customer needs, or regulatory actions.
  • Creating the Vision (the what): Detailing the “future state.”
  • Communicating (20% on what, 80% on why): Development of a communication plan used throughout the project lifecycle that addresses the timing of messages, documents the level of detail for each audience type, and provides a strong, consistent meaning.
  • Assembling the team (who will do the work): How many, where are they located, the right mix of skills and commitment, etc.
  • Empowering for success (eliminating obstacles, aligning accountability): Executive steering committees are often used; ensuring the initiative doesn’t fail for lack of resources, sponsorship, etc.
  • Mobilizing commitment (assessment, analysis, readiness, capability, training): Identify friends, foes, and agnostics towards the new program/strategy; if there are individuals who just won’t support the change, they may have to be let go.
  • Architecting, Designing, & Measuring (the how and metrics): Align the people with the systems of recruiting, training, measuring, and rewarding to drive the new behaviors needed to support the change.
  • Celebrating short-term wins: Recognize accomplishments and milestones – but don’t break out the Champaign too soon.

All told, Kinneberg offers an excellent overview of change management issues and solutions, and the model providers well adds to the tool set available to supply chain managers.

In an environment in which the ability to react quickly to market and competitive changes, the ability to get the organization to move faster than the competition is perhaps the key to sustainable success, as GE realized when it built the CAP model under Jack Welch in the 1990s.

Do you have a favorite change management model? How do you like the one offered by Kinneberg? Any other thoughts, stories, or perspectives on change management? Let us know your thoughts at the feedback button below.

 
     
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