Monday, 21 August 2017

Influencing Commercial vs. Supply Chain Change Management


Business functions, like organizations, have cultures. They are defined by the mindsets, actions, and behaviours that govern how work gets done.

A function’s culture can have more influence on how a change initiative is managed than the company’s culture. Identifying the dominant culture, either function or company, is important to people supporting change because aligning with it increases their level of influence. The greater the influence, the greater their contribution to preparing people for new ways of working.

I realized the difference between Commercial (Marketing, Market Research, and Sales) and Supply Chain (Manufacturing, Logistics, and Distribution) cultures when I helped a global organization refresh its operating model. We held three design workshops that were attended by cross-functional representatives. Two were Commercial-led and one was Supply Chain-led. The Commercial-led workshops were similar in agenda, activities, and tone, even though the sponsor and attendees were different. The Supply Chain-led workshop was completely different – the planning process, session design, and discussions bore little resemblance to the first two.

The reason for these differences lies in the areas of focus. They affect how these groups think, what they value, how they invest their time, and what they discuss. The biggest difference is the outcomes they seek: Commercial strives for growth while Supply Chain strives for cost savings. Examples of growth outcomes are increased sales, market share, and profit. Cost savings outcomes include higher case fill rate and asset utilization, and lower operating expenses.

Growth and cost savings outcomes can be in conflict. Think of the Marketing Brand Manager who is motivated to quickly change product packaging based on new consumer research to increase brand awareness and sales. And the Plant Manager in charge of production who is motivated to delay this change until the existing packaging inventory is used to reduce material waste and operating costs. Both contrary perspectives are correct within the context of the different outcomes they seek to achieve.

One way to increase your influence during change is to align with the desired outcomes of the dominant culture. Here are three ways to do so.

Communicate how your recommendations contribute to achieving the outcomes
Noting how your contributions help achieve the dominant culture’s outcomes is the easiest way to increase influence. Established outcomes provide undisputed rationale for approval of activities. If your rationale is sound and the other alternatives contribute less to the outcomes, your recommendations are likely to be approved.

This tactic also works for recommendations about running a project. For Supply Chain-led initiatives, recommendations that eliminate rework, simplify processes, and better deploy resources are well positioned to be approved because they reflect outcomes valued by the dominant culture.

Work within preferred outcome time frames
Marketing and Supply Chain orient differently to outcome time frames. Supply Chain projects have a greater focus on annual results, even if the project runs longer than a year. In contrast, many Marketing projects focus on the long-term outcomes over interim targets.

The difference in timeline orientation is most pronounced when interim targets are missed. Supply Chain focuses on closing the immediate gap, whereas Marketing focuses on when the gap is best filled over the duration of the initiative. Working within preferred time frames increases the relevance of your recommendations.

Use existing templates associated with the outcomes
Credibility is enhanced when using frameworks and formats people are accustomed to and comfortable with. Visual alignment can assist comprehension and credibility, and reduce barriers to adoption.

Commercial templates sourced from brand and sales plans or customer and consumer data reports, and Supply chain templates from asset purchase approval and operations planning communicate validity and rigour. Familiarity and acceptability can lead to greater perceived value, acceptance, and support.

Cultures guide the management of change initiatives. For some, it is the company’s culture and for others it the leading function's. Identifying the dominant culture is an important step to influencing change.

Different functions, like Commercial and Supply Chain, have different cultures with different areas of focus. Aligning with them increases the influence you have on change by evoking familiarity, increasing credibility, and lowering resistance.

Connecting with the outcomes valued by the dominant culture is a powerful way to increase your influence and contribution to managing change. A good first question to ask is, “What does this project seek to achieve?”

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