Details, Details

Dealing with the devil during organizational change

Supply chain and operations management professionals are painfully aware that, for successful organizational change, the devil is in the implementation details. Joan Magretta of the Harvard Business School recently wrote, “Strategy is about making choices that lead to sustainably superior performance,” adding that fit and continuity are key tests of good strategy and that it is possible “to change too much, and in the wrong ways.”

The Strategic Management of Resources module for the APICS Certified in Production and Inventory Management designation summarizes corporate strategy as survival. Radiating from this corporate focus are the steps required to define what survival looks like. These systematic, process-based steps are adopted to be efficient and comprehensive. Done correctly, they all fit together.

Operationally, having good fit means lower costs, better responsiveness, and ultimately greater profitability over the long term. Then comes the persistent challenge of strategic continuity, especially when circumstances change. (Hello, devil!) Yet, doing it correctly—meaning, making coherent strategic choices by considering organizational change tolerance and resistance levels—requires everyone to share a constancy of purpose.

What does constancy of purpose really mean in strategic and operational contexts? For example, if you make a New Year’s resolution to lose weight (strategic goal), it would be meaningless if you don’t also choose to exercise or reduce your food intake. As time progresses, you may choose different diets and various exercise routines (operational decisions). But note that, realistically, losing weight is a lifelong journey (strategic continuity) that requires constancy of purpose (discipline).

There are countless operational examples where processes were developed on the fly. For instance, a special situation arises, and a fix is made that doesn’t take into consideration some existing processes. The resulting workarounds reduce efficiency because they are trying to control two processes instead of one.

Say decision makers at a company, when examining how products moved through the operation, discover 59 different ways production flowed. After streamlining, flow paths are reduced to 10. Consequently, production cycle time is cut from three weeks down to three days, with a resultant reduction in work in process. And productivity increases more than 11 percent in the first three months, with the added benefit of faster customer response time.

However, within 18 months, the plant has almost completely reverted back to its former self. Why? Management never really achieved constancy of purpose because introducing structure and process discipline was never accepted throughout the organization. In retrospect, an assessment of the strategic continuity might have pointed out that the disconnect was the operational steps versus senior management’s expectations, which were to continue old practices but just do them better.

Another example involves a poorly performing foundry with rudimentary flow processes executed by a highly motivated workforce. In this instance, getting constancy of purpose, rather than process flow redefinition, was the initial focus. The end results were better performance improvements that lasted for 10 years. Here, constancy of purpose helped everyone accept the reason why process discipline was necessary. Because financial survival was in question, almost anything would have met the requirements for continuity.

But supply chain and operations management professionals know that it’s never quite this simple to achieve constancy of purpose. So, a final example involves ongoing efforts to blend constancy of purpose and process fit in a formerly family-owned, custom product manufacturing environment. Here, there is a struggle for agreement on the value of disciplined processes in an environment where specialized skill and craftsmanship are highly valued. It is often unclear which needs to come first—disciplined or ad-hoc processes—because employees lack clear understanding of how disciplined processes will affect them, and this can cause the workforce, supervisors, and managers alike to resist these efforts.

Everyone wants the company to be successful. But getting everyone to agree on how to achieve this success (continuity) while maintaining the discipline to achieve the goal (constancy of purpose) is a devil of a challenge.

Does this devil visit your company? What do you think should be done to achieve constancy of purpose? We encourage your feedback.

John P. Collins, CFPIM, CSCP, is president of Sustainable Solutions. He may be contacted at jcollins@ssi-spm.com.

Eric P. Jack, PhD, CFPIM, CSCP, is associate dean at the University of Alabama–Birmingham. He may be contacted at ejack@uab.edu.