Take charge of change!
Logistics professionals who want to survive--and thrive--in today's fast-moving business environment must manage change rather than be victimized by it.
By Toby B. Gooley -- Logistics Management, 8/1/1999
Logistics managers are no strangers to change. Not only do they grapple with it within the logistics arena, but they also must contend with the sweeping, technology-based changes that are affecting all industries today. "The very nature of business has changed dramatically in just the last three years or so," says Dr. Saul Pilnick, president of change-management consultants Human Systems Inc. of Boca Raton, Fla. "In today's business world, you constantly have to reinvent yourself to stay ahead of your competitors."Those general business developments brought radical changes indeed for logistics managers. For example, logistics professionals have had to develop and implement new distribution strategies and technologies. They've led the move toward global sourcing and distribution, logistics outsourcing, and supply chain management. And their jobs have changed, requiring them to have more analytical, computer, and financial-management skills.
Change, then, is part and parcel of today's logistics environment. But those who passively accept change instead of managing it often become its victim, losing control and influence over their environment or even losing their jobs, say the experts. Instead, they advise, logistics managers should become "change leaders" who motivate their organizations to seize the opportunities for improvements that change offers.
The Need to Lead
Companies today must become what Pilnick calls "adaptive organizations" that can respond to marketplace demands quickly. To do that, every segment of the corporation must be flexible and able to respond to market pressures. That demand may be greatest on logistics, since it is the foundation on which manufacturing, distribution, sales, and customer service all rest. Companies therefore depend on logistics--and on logistics managers--to facilitate strategic change.
On a more personal level, it's important to embrace change not only as a sign of one's commitment to continuous improvement, but also as a matter of survival in today's fast-moving business environment. "Change has to become your friend, rather than your enemy," says Pilnick. It's no longer enough simply to tolerate or accept change, he advises. Rather, logistics managers must be comfortable with and even stimulate change if they want to remain relevant and enjoy personal growth today.
Although that theory is easy to understand, in practice it's very difficult for many logistics managers. Some people thrive on change, enjoying the challenge of developing and implementing new ways of doing business. For others, though, change is scary, says Joseph A. Martha, vice president and leader of Mercer Management Consulting's supply chain strategy practice in Cleveland. "Resisting change is human nature," he says. "When you've been doing something a certain way for so long, to change it is threatening."
Often, it's up to the logistics manager to overcome such resistance. As more companies have outsourced their logistics activities, for example, logistics managers have been asked to manage the change from internal to external resources. It's a responsibility that requires great sensitivity and diplomacy because outsourcing often leads to job losses. As hard as that may be, it's imperative that logistics managers take control of the situation because the outside provider is unlikely to do so, Martha suggests. "I don't see a lot of thought being put into change management by the third parties," he observes. "They are more focused on operational than on organizational issues."
What Makes a Good Change Leader?
Will a good logistics manager automatically be a capable change leader? Not necessarily, says Martha. "Managing change requires you to change the way you manage," he believes. If logistics managers are to be successful change leaders, Pilnick adds, they must stop thinking of themselves as being only in the logistics business. "They have to believe that they are also in the change business."
Although everyone has his or her own individual management style, there are several things every logistics manager can do to be a successful change leader:
Understand the psychology of change. Know why people resist change and anticipate the resulting negative behaviors that can sabotage implementation. "We long for predictability and the comfort of the familiar," Pilnick explains. "Even when change seems so wonderful that from a logical point of view everyone should love it, it won't work if it's done in a way that breaks down employees' comfort zones."
Corporate culture plays a tremendous role in promoting or retarding change. "A company is an institution that is no different from a village or a community," explains Pilnick. "It has values and daily behavioral habits, it has a division of responsibilities, and it has people in leadership positions." Like a village, moreover, companies have unique cultures that invisibly guide people's behaviors and expectations. They also give rise to informal, "underground" management systems. "Today's manager has to have good street sense as well as a knowledge of the company's formal organization," Pilnick suggests. "The formal organization is the tip of the iceberg. The 'subterranean' system is where politics is played out, and you have to manage that part of the business, too."
Prove beyond doubt that change is needed. Any plan to change the way people carry out their responsibilities will need full cooperation and support from every employee. To gain that support, managers must convince co-workers that change is needed and that the consequences of not changing are dire. "If you just issue a mandate but don't establish the proof that change is needed," says Martha, "it just creates anxieties in people."
Philadelphia-based chemical manufacturer Rohm & Haas found that out several years ago when it implemented a uniform logistics-information system worldwide. The need to create a common global system was clear to top management, which wholeheartedly supported the project, says Robert P. Petrich, corporate director of logistics and transportation. "What we didn't do so well was to get a good alignment across the entire organization around that decision," he says. As a result, some managers felt they did not have enough say in the matter, and their response was to implement the system with minimal effort and minimal disruption to their existing work methods. "We are still today having to go back and fix some of the problems that resulted from that 'just get it done' kind of attitude," Petrich says.
Communicate, communicate, communicate! Communicating the goals, progress, and impact of planned changes to every employee is absolutely critical, advises Martha. One way to do that is to get employees involved early in the decision-making and keep them in the communications loop throughout the life of the project. "You should include people at the lowest possible level that's appropriate in the dialogue," Pilnick suggests. Martha tells of an apparel manufacturer that did just that. When executives wanted to implement a new customer-service strategy, the company president explained the program to all employees--including those who had no direct contact with customers, such as cutters and stitchers at a factory in Central America. Significantly, he made his presentation there in Spanish, signaling the seriousness of his commitment to involve them in the new program. Now, Martha reports, every employee understands the impact his or her job performance has on customer satisfaction.
Help others handle change successfully. It's important to provide training that gives employees the skills they will need to carry out their new responsibilities. If employees feel they don't have the ability or knowledge to manage new processes, they are likely to resist those changes. Managers also need to recognize that emotions inevitably run high during periods of change. "People view change management as part and parcel of re-engineering--which for most of us translates to downsizing," observes Martha. Employees therefore often equate change with loss--loss of a job, loss of status, loss of community due to relocation, and so forth. A wise manager will help them cope with those losses, whether real or perceived. (See sidebar titled "Helping Employees Adapt and Thrive in Transitional Times.")
Be a good role model. Pilnick believes it's critical that managers behave in a way that's consistent with their statements. "The manager who doesn't get on the [production] line and engage with that new technology, becoming a shining example and reinforcing the use of the technology, creates problems," he says. Petrich of Rohm & Haas agrees. His company found that having plant managers train equipment operators was an effective way to reinforce the importance of the new information systems to employees at every level, he says.
Don't take on more change than your organization can handle. Some companies try to make technological leaps in order to adopt industry best practices. But too much change too fast can overwhelm employees and leave them feeling incompetent and hopeless, Martha says. He cites the hypothetical example of a company that has no experience with automated production planning and scheduling but nonetheless goes out and buys the most sophisticated software package available. "Even if people go through training, they won't understand how to use the tool and get the full value out of it," he says. A less-than-perfect solution, but one that has a greater chance of success, would be to give employees time to learn the basic concepts behind planning and scheduling as well as acquire the specific skills they would need to use the software. After progressing through these steps at a reasonable pace, he suggests, they would be ready for a smooth software rollout and could then gain the full benefits of more sophisticated technologies.
Focus on people's work processes, not on technical issues. This was one of the most valuable lessons learned during Rohm & Haas's five-year experience with change management, according to Petrich. Early on, it became apparent that the systems-implementation teams were focusing only on technical issues and meeting deadlines, he recalls. Meanwhile, employees found that although the new system improved information gathering, it didn't help them do their own jobs more efficiently. They therefore created "workarounds" that minimized their use of the new system--but which actually increased their daily workload. As a result, the new system was not being fully utilized, and the company was not realizing its potential benefits. Once it recognized that problem, the project-management team shifted its emphasis from computer systems to improving people's work processes, Petrich says. That has paid off handsomely as employees have adopted new procedures that now make sense to them. Productivity has greatly increased, materials flows have become predictable, there are few production surprises or emergencies, and job satisfaction has soared, he says. "That," he says, "is the most gratifying change I see."
Where to Learn More About Change Management
There are many resources devoted to the subject of change management, including several that focus on logistics applications. Here are just a few.
- World Class Logistics: The Challenge of Managing Continuous Change. Written by researchers at Michigan State University and published by the Council of Logistics Management (CLM), this book defines logistics best practices worldwide and discusses how to manage change in the logistics arena. Available from CLM's Publications Department at (630) 575-0985.
- "Supply Chain Innovation in a Global Multi-Business Enterprise." This presentation by Robert P. Petrich of Rohm & Haas and James J. Curry of LogiSys Associates at 1998's Council of Logistics Management Annual Conference highlights the importance of managing both technical and work-process changes in a logistics environment. 1998 Annual Conference Proceedings, available in print or on audiotape from CLM at (630) 575-0985.
- Surviving Reengineering: A Formula for Managing Change. Jo Ellen Gabel, Ph.D. and Saul Pilnick, Ph.D. of Human Systems Inc. offer strategies for supporting and encouraging cultural change within corporations. Available from Human Systems Inc., (561) 994-2002, or under "Publications" at www.humansystems-intl.com.
- "All I Ever Needed to Know About Change Management I Learned at Engineering School." Roger Dickhout of consultants McKinsey & Co. explains in highly readable style the relationship between such principles as the Law of Momentum and change management. The McKinsey Quarterly, 1997 No. 2.
- "Changing the Way We Change." A look at how Sears, Shell, and the U.S. Army made operational improvements by changing employees' attitudes and behavior. Harvard Business Review, Nov.-Dec. 1997 (Vol. 75, No. 6).
- Some Web sites that include advice and information about change management include: Mercer Management Consulting (www.mercermc.com); Transition Management Advisors (www.corpchange.com); Michael A. Knaus & Associates (www.maknaus.com); and Richard M. DiGeorgio & Associates (www.change-management.net).
Helping Employees Adapt and Thrive in Transitional Times
Be fair.
Be visible and available.
Use interactive feedback.
Elicit solutions to problems from employees.
Reinforce the need for change.
Encourage a collaborative attitude.
Admit when you lack information.
Clarify new roles and relationships.
Prepare and support employees.
Be prepared for the grieving process-- it always occurs.
Identify which workers are experiencing losses and know what their specific losses are.
Appreciate the meaning of the loss for the employee.
Recognize that employees resist the unknowns, the losses, the endings, and the inadequacies that always accompany major changes.
Understand that employees personally experience fear and anxiety over increased workloads and higher performance expectations.
Understand that losses may include the severing of relationships with trusted co-workers and the loss of a level of comfort and familiarity.
Help employees examine personal issues: potential geographic transfers or the loss of a home, personal friendship, or status in the community.
Engage in open and empathetic communication during the entire change process.
Listen closely, carefully, and intently to the distress the employee expresses.
Be aware that some employees will suppress their emotions.
Identify and acknowledge employees' feelings and allow them to communicate those feelings.
Compensate employees for their losses--for example, by offering training and education to gain new skills or by offering outplacement services.
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