Global Logistics and Supply Chain Strategies - March 2008 - (Page 61)

Four Critical Steps to Managing Change in the Supply Chain BY J. PAUL DITTMANN J. Paul Dittmann is director of corporate partnerships at the University of Tennessee. T he life of a business professional today means being constantly connected, with little downtime to recharge. Supply chain professionals often find themselves at the center of the storm, striving to balance very demanding operational imperatives with the need to satisfy customers and help grow revenue. They must find ways to operate successfully, yet also rapidly improve to be competitive in the future. And, improvement basically means “managing change.” Change management is the essence of the real work of a business professional. Ironically, supply chain professionals often find themselves ill-equipped to deal with change management, and in fact most have only a vague idea of what it is all about. Yet, studies show that projects fail more due to human and organizational reasons than technical challenges. A common comment heard from supply chain professionals when asked what it takes to successfully implement initiatives is that it simply requires excellent analysis and a good plan. Many do not naturally gravitate to the softer issues of communication planning and organizational buy-in. Yet failures in these areas are at the root of many initiative failures. The Project Management Institute’s statistics on project success are not encouraging: • Only 16 percent of projects come in on time, on budget, on benefit • 53 percent are completed, but greatly miss time or budget or benefit • 29 percent are never completed • 62 percent of companies have a runaway project that seriously damaged the firm A Computer Sciences Corporation’s CSC Index study is only slightly more encouraging, with successful projects representing 32.1 percent of the sample. What creates this dismal track record? Many factors cause the failure of initiatives, from scope mismanagement to lack of good project leadership to technical deficiency. But the experience from working with hundreds of companies at the University of Tennessee strongly indicates that the most significant shortcoming is in the area of change management. A major study of change management in the supply chain area was completed at the University of Tennessee and published in the book titled Handbook of Global Supply Chain Management. This work was grounded in a complete review of change-management literature as well as data from hundreds of companies in the university databases. The study found there are four change-management imperatives that must be addressed to ensure success in supply chain initiatives: 1. Identify Key Stakeholders One project manager from a major firm thought he had designed the perfect change-management plan. He introduced the topic with a well-crafted, 30-minute presentation to everyone affected. He followed that with a one hour review with everyone directly involved to go deeper into the coming change. About a month after the project began, he issued a newsletter that clearly showed the progress being made and the benefits to be achieved. Finally, as the project neared completion, he got a 600-word article in the company newsletter. This project manager did many things right, but missed in one key area. He did not first identify the individuals critical to the success of his initiative and design a communication plan specifically for them. We estimate that companies communicate over two million words to their employees about new initiatives each quarter. The communication plan described above amounts to only one-half of one percent of that mass of information bombarding employees quarterly. Unless the communication process precisely targets the key players, it will not rise above the normal noise level in a large enterprise. There are people in every company for nearly every project that will make or break the project. These people may be anyone from senior executives to critical subject matter experts embedded in the organization. To manage change effectively, these key people must be identified and exposed to a customized communication plan. When change management is taught in executive education programs at the University of Tennessee, each participant goes through a short exercise. They first identify the most important sup- 62 MARCH 2008

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Global Logistics and Supply Chain Strategies - March 2008 Editorial GL & SCS Exclusive FastForward Up Front The Green in Green Think Inside the Box Have a Second Look Can't Happen Here Opinion: Stay in the Black as Your Workforce Fades to Gray Opinion: Four Critical Steps to Managing Change in the Supply Chain Industry Voices

Global Logistics and Supply Chain Strategies - March 2008

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