Dr Ian George on Procurement Transformation – Causing Change

(We’re delighted to feature the final post in the series on Procurement Transformation from Dr Ian George. Ian is a senior partner and practising consultant at Agile Partners, has an engineering background, and has worked in procurement for the past 20 years. His doctorate looked in detail at procurement transformation programmes).

Engineers like to work out what needs to be changed from a current to a future state and therefore it’s all about things. Psychologists like to study the effects of change on people and therefore it’s all about the people. Finance just want to know how much it is all going to cost. Despite change being one of the most written about subjects in business literature (along with leadership) it is probably still one of the least understood from an implementation perspective and therefore still highly variable in terms of the outcomes achieved.

Change is not the same as improvement. Solving one problem by creating others is not a business strategy, it is a silo mentality that ultimately leads to the ruin of many, often once great, organisations. If change is needed then the first step is to define the purpose of the change in operational terms that reflect the needs of a stakeholder or other customer. This covers both “what” is going to be done, and equally important for those not privy to the strategy formulation process, “why” it needs to be done. If people know why something needs to happen, even if they don’t like it, they are more likely to grudgingly accept its need. Leaders tend to see this domain as their own, but are often poor at personally cascading the messages down through the organisation through a process of dialogue.

But what to change? Well rehearsed processes are extremely important drivers for implementing and sustaining change. If people know and can apply these change processes then the fact that the solutions are not fully formed (and they rarely are) becomes part of the challenge to be met through their application.

Managers are often tasked with physically taking the organisation through the change process and therefore need to learn these approaches as a personal skill set. Lean and Six Sigma are classic examples of how it can be done well and badly. Improvement cannot be whittled down into a set of tools to be mechanically (and mindlessly) employed. Good change leaders take time to develop and can show a lot of scars from previous mistakes they have made. There is no shortcut through an MBA programme or four week Six Sigma Black Belt course.

Performance links closely to processes, requiring careful thought if the law of unforeseen consequences is to be avoided. To paraphrase Eli Goldratt “If you measure me in an illogical way, don’t be surprised at my behaviour.” In a changing environment measures need to cover inputs, activities, outputs and progress. We need to know how we are doing now and be able to predict how performance is going to change over time. This means using performance measures in an appropriate way. If they are used primarily to reward or punish then people will cheat and the data will be distorted. If they are used to inform and support better decision making then people will engage with them more willingly and accept both the good and the bad news.

At the centre of any change programme are people (rather than the organisation). This is where most initiatives fail. Not because the people are failures, but because they are not supported and managed effectively through the transition. Many arguments promote people as the sole focus of change. This is not the case, there are many factors and they need to be considered in a balanced way if appropriate decisions are to be made and rapid progress made.

Ultimately it is the responsibility of the leadership team to change the organisation. People that work inside it have little opportunity for self-determination and therefore shouldn’t be held inappropriately accountable for bad performance. Despite this, they often are.

 

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