How Change Management Can Change Procurement For the Better

Many of us tend to dismiss the “soft” elements of procurement including change management initiatives. But as we’ve explored so far in this interview series with Paladin Associates’ Barb Ardell (also see Part 1, Part 2 and Part 3), procurement change management done right can have a huge impact. But how do you build the case for it? Today, we share some of the statistics that Barb provides in helping build the case for it.

Spend Matters: What does the industry say about the importance of influence skills and change management – and why change management matters in the first place?

Barb Ardell: You asked for it. And you’ll get it! Here are some quotes/statistics supporting the need for improvement:

  • 98% of CFOs view change management to be a critical skill for procurement. Yet 60% of CFOs expressed dissatisfaction with procurement’s change management capability, according to a Proxima Group & Nelson Hall 2012 study.
  • About “68% of respondents still describe their internal influence as ‘mixed,’ suggesting they are yet to create sufficient demand for their services or are focusing on the wrong agenda,” a Deloitte 2014 study stated.
  • 6 behavioral competencies, one of which is Influencer, set strategic procurement staff apart – Conference Executive Board
  • The University of Tennessee’s 2012 white paper entitled “Skills and Competencies That Supply Chain Professionals Will Need,” reports that 1 of the 5 critical skills is Inspiring and Influential Leadership.

SM: What is the cost of failure if we aren’t good at change management?

BA: An informal poll of the Influencing Change breakout session (about 75 people) at ISM 2014 conference found that individuals estimate less than a 50% probability of success in conquering their biggest change challenge. Costs of failure include:

  • Vanishing ROI
  • Lost opportunity cost
  • Damaged reputation
  • Deteriorating morale
  • Organization cynicism

Arthur D. Little reports that 85% of corporate change efforts fails. And VitalSmarts’ (developers of Influencer) research shows that fewer than 1 in 8 organization change efforts produces anything other than organization cynicism.

As we conclude our interview with Barb, we’ll share a number of quotations about successful programs from companies that have gone through the process.

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