Four Change Management Keys to Digital

Digital technology is the dominant force for change in supply chain today. It is arguably the most important change agent in the history of business with structural revolutions happening across sectors including retail, manufacturing and healthcare. Consumers are developing new expectations almost overnight, while startups threaten established players continually from the edges of industry.

The common thread is invariably some new app for Uber-style market making, or an artificial intelligence system that finds and exploits hidden patterns, or a flexible manufacturing technology that obsoletes existing factories. Digital rewrites the rules of business and supply chain, and that means trouble for anyone not agile enough to keep up.

Slow is Smooth, Smooth is Fast

The call to business leaders is to transform. Unfortunately, this call often comes with lots of urgency but not enough cool to handle the journey. There is a saying used by shooters that applies: “Slow is smooth, smooth is fast.” In this context it means that change management is vital to digital transformation, no matter how imminent the external threat.

Change management as a capability, however, seems someat undervalued at the moment. Our Future of Supply Chain survey this year saw it fall to fifth place overall as an “essential” skill for supply chain leaders in the future, just behind business strategy.

Cut by industry, this data reveals more about where the heat is on and how much that heat fosters a need for change management skills. Food & beverage and retail top the list with 90% and 86% respectively, saying that change management is an essential supply chain skill. Both are in the midst of epic industry-wide shakeups and both are looking to digital for solutions.

Many of us, however, know the eye-rolling reaction that sometimes accompanies change management in practice. It often feels fuzzy, boring and yes, slow. People bristle and snooze, but digital is like a weapon and the old saying definitely applies – slow is smooth, smooth is fast.

Four Keys to Change Management

Beyond promoting the right attitudes about change management, I’d like to offer four key ingredients that may help deliver slow-smooth-fast digital transformation:

• Roadmap and GPS – Roadmaps let everyone know where you’re going; a GPS tells you where you are. Great roadmaps focus on capabilities coming on stream as structural changes happen and new tools come into use. For supply chain transformations, the GPS is essentially a metrics roll-up that ties work to business outcomes.  Colgate-Palmolive managed a huge and successful transformation by assiduously applying both a strategic roadmap and strict financial scorekeeping along the way.
• Communication and commitment – ‘Communicate’ is often cited as rule #1 for good change management. Commitment may be just as important. People need to know what is going on and why, but they also deserve clarity around commitments that are firm going forward.  Intel drove a transformation that started with an urgent need to reduce costs and at the same time “just say yes” to customers. It worked because communication was abundant, but also because people knew that engineering-as-problem-solving was going to remain sacred.

• Balance and resolve – Transformation takes time and the assumptions baked into strategy on day one will almost certainly change before the destination is reached. Balance means accommodating new realities while staying on the right track. Resolve is about knowing where the track leads.  Unilever is a good case study in ‘balance and resolve’ as applied to change management. It has transformed from a strongly country-based organization to a regional/global value chain structure over an extended period. By balancing customer pressure as it shifted from a retail shelf orientation to an empowered digital consumer focus the supply chain has kept up with technology. By holding firm to its Sustainable Living Plan it has also stayed on course.

• North Star – In times of great change, certainty is a rare and powerful element. It is the one thing that guides everything else.  Amazon, for all its willingness to change, has a clear North Star in customer centricity. It defines the roadmap, unifies the communication and constantly tunes the balance. Amazon is in perpetual transformation, but its North Star never changes.Maybe that is why we all end up following their lead.