Here’s a common scenario: Another restructuring in supply has been announced with promises of revitalization, improved performance and greater alignment to business needs.
But all your workforce sees is a bulldozer going through the organization chart causing complete and utter chaos.
That’s the take of Gartner analyst Lorraine Gavin, in a recent blog post.
Gavin acknowledges that restructurings are necessary when companies facing major changes to business and operating models or other major challenges and misalignments.
“But they’re not always the right move,” Gavin says.
Gavin quotes car developer Ferdinand Porsche as famously saying, “Change is easy. Improvement is far more difficult.”
“When it comes to restructuring, there can be this unwavering belief that change will somehow lead to better outcomes. Based on the frequency of supply chain restructures, that doesn’t seem to be the case,” Gavin observes.
Restructurings do seem perhaps out of control. A recent Gartner survey, for example, found that an amazing 90% of supply chains were wither currently reorganizing or planning to reorganize.
That’s a lot.
Despite the frequency of reorgs, companies aren’t very good at it — only 45% of restructures performed well against their goals, Gartner research finds.
But if you must restructure, Gavin offers some keys to success:
Define a Clear and Aligned Purpose: You need everyone rowing in the same direction for a successful reorg.
Gavin recommends that companies “define and align on the purpose of your supply chain, guide employees toward that goal and ensure motivations and rewards are aligned to only the priorities that will deliver that.”
Break Down Organizational Barriers: Gavin notes that Even teams with shared purpose don’t always see eye-to-eye, and as a result the “throwing it over the fence” mentality takes hold, where supply chains operate as though they are distinct entities rather than the end-to-end powerhouses they ought to be.
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“Break down barriers by aligning talent across teams to meet organizational goals, increasing end-to-end supply chain acumen and developing transparency across reporting lines” she recommends.
Improve How Work Gets Done: Companies can change reporting lines, but if we’re still working in the same cumbersome and complicated ways, we won’t see any change in results, Gavin notes.
“This is further exacerbated by good-intentioned efforts that fail to account for how improvements in one function can accidentally send a bulldozer into another,” Gavin says, adding “Or by leadership making changes at the top that create more problems than solutions as they filter down.”
Companies can improve how work gets done by focusing on simplification, not addition, making changes based on shared objectives and connecting with those who actually do the work on a daily and weekly basis,” Gavin notes.
“Changing your structure won’t improve organizational effectiveness alone,” Gavin concludes.
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