Making Sustainable Change Happen

Managing a successful business today is more difficult than ever – the uncertainty of the economy and the ever-increasing levels of competition make it so. Subcontracting to areas of the world where labor is cheaper as a primary strategy causes three serious problems:
•    We lose jobs here in North America
•    We teach future competition how to do what we do
•    It’s temporary in that everyone can outsource, making it a non-sustainable competitive advantage.

Sure . . . we in North America have some competitive disadvantages with the rest of the world such as higher wages, tougher government regulations, and the like.  However we also have many clear advantages – specifically the power of human resources working together as a team, to change the way we do things. We have learned that we can't carry on business as usual . . . because this will bring about results as usual.

Understanding and learning how to use the robust tools that have been developed over the last twenty years or so is the solution. Making many of these tools work, however, requires not doing what you do better, but doing things differently to be better. This is particularly true with Executive S&OP.

At a September conference in Boston, Lora Ceceri – an industry researcher – reported that successful users of Executive S&OP found that their success was based upon the following:
•    60% Change Management
•    30% Process Improvement
•    10% Technology
I couldn’t agree more. The question, however, is how do you tackle that 60%, how do you bring about sustainable behavior change?  It’s only through the efforts of a number of people that total potential is reached.  In North America, the land of plenty, we have not always played team ball.  To a great extent, we have been a group of indi­viduals acting like the "lone ranger" and “doing it my way." That needs to change if you want the S&OP process to work.

Making Executive S&OP work requires behavior change at multiple levels in the organization, enabling a common game plan to be developed with one set of numbers on which all involved people focus. In short, it aligns human energy toward common goals.

The compelling question is therefore how to bring about real and sustainable behavioral change in an organization? This doesn’t happen because there’s a need or a strong desire.  Keep in mind: a drowning person does not die for lack of either of these.  
    
In my work, I find that there are four components that bring about the necessary behavior change that underlies successful Executive S&OP. These components are:

1.    A Vision of the Future – This is a credible picture of an improved future, knowing and understanding the difference with current practice, knowing that there is a way of doing things that can be better than the present.  This can't be imposed by some management decree, but must be led by management participation.

2.    Discontent with the Present – A proactive management team raises this discontent through education before the pain of external influence (customers, owners, etc.) insists on it. Someone once said, “the future belongs to the discontented.” I believe this is true, when the discontent is self-imposed. If the people in an organization have a vision of an improved future but are content with the way things are, change will not happen.

3.    A Path of Acceptable Risk – By definition to make change is to take risk.  The challenge is how to provide a "safety net” for the people and the organization. Planning a series of small, low-risk, actions that connect to the vision creates this safety net. When expertise and confidence is gained, these small actions then expand further. An example of this is what we call the 90-Day Pilot approach to Executive S&OP.

4.    Feedback on Progress -- People never outgrow their need for recognition and achievement. Planning in small pieces (90-Day Pilot) gives the ability to make rapid measurable progress  – which creates ‘fuel’ in time, energy, enthusiasm, and money for further expansion.

Each of the four components must have value. If any one of them has zero value, lasting change simply will not happen.  As each of the components take on value, they multiply with one another.  And the higher the value of each component, the faster the rate of change.  

 
CONCLUSION
    
 
In this more highly competitive world, we cannot sit back and become the victim of circumstance – our way of life is at stake.  We must make a decision to improve the future.  Rene Dubos (Pulitzer Prize Winner 1982) in an essay entitled "A Celebration of Life" puts this quite well:  "In human affairs, the logical future, determined by past and present conditions, is less important than the willed future, which is largely brought about by deliberate choices - made by the human free will."  
    
In managing our business, to improve results is simply a choice of human free will.  Lets meet the challenge and change the way in which we do things.  This starts by understanding the components of change - Vision, Discontent, Acceptable Risk, & Feedback on Success.
 
Best wishes,
Bob Stahl