Why do so many supply chain transformation projects fail?
Your company decides it‘s time to re-engineer their supply chain. Leadership sends out several notifications to let people know “it“ is coming, and many divisions are going be affected. The company also does a good job of telling people when training will occur. What the business doesn‘t do is address the critical questions team members are asking, such as: “How does this affect my job?“ “Why are we doing this now?“ “Why didn‘t anybody ask for my input?“ The result of not dealing with these, very human, concerns is the initiative is met with resistance and delays. Consequently, it falls short, leaving the CXO scratching their head wondering where it all went wrong. The simple answer is that there was no buy in from the people across the organization, and without that any supply chain transformation project is destined to fail.
The fact is, transformation requires much more than checking the boxes off a project plan and completing a set of activities. Successful cultural transformation begins by instilling a “change mindset.“ So how does a transformation project leader go about this?
A simple equation for success
Success = IQ + EQ. Most people know IQ, or Intelligent Quotient, represents a person‘s intellect and logical reasoning ability. EQ, or Emotional Quotient, is the ability to connect with others.
Let‘s elaborate on Emotional Quotient:
EQ is defined as a person‘s ability to relate to others, understand their own emotions and motivations as well as the emotions and motivations of others. If you are in a leadership position, it is likely as a result of your EQ more than your IQ. Frequently, executives know exactly what needs to be accomplished to improve profits but find themselves handcuffed by a culture that cannot respond to change. Besides a well-balanced dose of IQ and EQ, there must be a deliberate and planned approach to getting cultural change to happen at the same pace as supply chain and operational change. This requires prescribed planning, analysis and discipline. Understanding a culture is more than reviewing responses to an employee survey.
Case Study: Changing perspective and mindset to prepare for future growth and innovation
An examination of a 100-year old global food manufacturer depicts a common theme. The organization was implementing a major strategy change which called for product innovation. With many high-tenure personnel that had come up through the ranks and had been with the company for their entire career, the problem was little understanding of market conditions pertaining to capabilities and pricing. The CEO recognized the need to drive cultural transformation to support the new corporate strategy.
With Maine Pointe‘s support, cross-functional teams were formed, breaking down traditional silos and resolving complexities in areas such as quality assurance, service levels and non-value-added activities. With heavy socialization of the vision, mission, goals and objectives, people recognized they needed the help of their suppliers to breakthrough to the next level of success. Opening new communication channels both within the organization and with suppliers drove significant, cost and cash benefits, created a platform for future growth and innovation and increased EBITDA by 20%. Read the full success story.
Building a transformation strategy
Executives can build a good strategy and likely understand the immediate objectives to produce a satisfactory outcome, but it is high risk to believe that your people, including senior management, can break away from the paradigms already established perhaps before you even arrived. People are a by-product of their culture and there is an emotional component to every strategy or project you set out to do. EQ must be a parallel path with the IQ. Does your organization have EQ in the plan?
If you would like to discuss any of the topics raised in this article, contact us for a no-obligation chat. Email: info@mainepointe.com
About Maine Pointe
Maine Pointe, a member of the SGS Group, is a global supply chain and operations consulting firm trusted by many chief executives and private equity firms to drive compelling economic returns for their companies. We achieve this by delivering accelerated, sustainable improvements in EBITDA, cash and growth across their procurement, logistics, operations and data analytics. Our hands-on implementation experts work with executives and their teams to rapidly break through functional silos and transform the buy-make-move-fulfill digital supply chain to deliver the greatest value to customers and stakeholders at the lowest cost to business. We call this Total Value Optimization (TVO)™.
Maine Pointe‘s engagements are results-driven and deliver between 4:1-8:1 ROI. We are so confident in our work and our processes that we provide a unique 100% guarantee of engagement fees based on annualized savings. www.mainepointe.com