“If we’ve been doing something the right way for 15 years, that’s a sure sign that, in these changing times, we’re doing it the wrong way.”
General Motors executive Pete Estes said that in a speech in the 1960s. In later versions of the speech, when he was running the automotive colossus, he crossed out “15” inserting “five”, which he then replaced with “one”.
It’s easy to forget that change management is not a 21st-century cliché. Back in 1970, the management theorist Chris Argyris confronted the issue in his book Intervention Theory and Method: A Behavioral Science View. More than 50 years later, Argyris’s book is one of 85,000 titles on the subject on Amazon. Yet has all this knowledge helped us manage change successfully?
The question is: who is defining success or failure, and what do they mean by it? A project can be finished behind schedule or run over budget, but still improve the organisation’s performance in the long run.
An IBM study has identified four factors that can prove to be the difference between the success or failure of a change: realistic understanding within the leadership of the complexity of it; a systematic approach; resources and managers dedicated to supporting it; and making the necessary investment. As Estes suggested in his speech, I would probably add a fifth: not listening to the outside world, and so not seeing that the way you’ve always done things needs to change.
Motorola is the perfect example of this. In the 1980s, riven by a debate as to how to best respond to digital technology, desperate managers gave their engineers the final say. They backed analogue because digital was technically not as good, stripping away up to 60% of the information in the original analogue file. They had a point but they were wrong. For many listeners, the convenience of digital technology far outweighed the quality issues that alarmed the engineers but to the untrained ear were often undetectable. Yet it’s too easy just to blame the engineers. If the leaders had been listening to the marketplace, they would have made digital technology a strategic priority. Instead, they gambled the future of the business on the instincts of a group of technical perfectionists.
So let’s apply change management to that quest, identified by Gartner’s in 2005, to create a flexible demand-driven supply chain. That sounds a simple, tangible goal but stakeholders will have differing, possibly competing, priorities.
Sales will focus on speed to market and may be less chuffed when finance point out that, with faster, more accurate sales data reaching head office, it would make sense to drop some product lines that aren’t performing. For manufacturing, predictability is instinctively preferable to the kind of volatility that responding to rapid fluctuations in demand might entail. None of this should prevent organisations from trying to transform supply chains, but it does suggest that it is imperative that all concerned agree on what they’re trying to achieve. The alternative pitfall is to try one initiative and, before even finding out whether that’s worked, try something else. As one supply chain consultant told me the other day: “If you make more than seven big changes at once, the complexity will probably kill you.”
The good news is, we can manage change successfully. We just need to be realistic. And always remember, as management thinker Rosabeth Moss Kanter put it: “Everything looks like failure in the middle.”
☛ Paul Simpson is consultant editor of Supply Management and author of books on Elvis, football and movies. John Kotter’s eight principles offer further insight into change management.