Procurement Transformation using Kotter’s 8-Step Change Process

Spend Matters welcomes this guest article by Somdipto Ghosh of Zycus.

In the rapidly evolving modern era, every organization understands that the mantra of long-term success can be summed up in the words “evolve or die.” However, even though every organization wants to innovate, no individual wants to change, at least not unless they are between a rock and a hard place.

Inside every procurement department, this paradox is apparent: While the organization realizes the need to embrace new technologies to transform its practices through automation, the fear of uncertainty and the natural reluctance to change causes transformations to become time-consuming, if not a failure. While there is no secret elixir of success, following Kotter’s 8-step change process will ensure that there is a method to all the madness.

Step 1: Create a Sense of Urgency

It is important to communicate and internalize a positive attitude toward change right at the outset, even before one starts evaluating technology options and communicating future benefits. It means creating a culture of evolution and constantly identifying problem areas in current processes.

Don’t: Wait for a calamity to occur and then walk around the office with a guitar humming “the times they are a-changin’.”

Do: Carefully evaluate current processes, noting data discrepancies, time lapses, missed compliances, etc., and their ultimate impacts.

Step 2: Build a Guiding Coalition

Every change management project needs an energetic group of go-getters to lead and support people through the change process.

Don’t: Take on all responsibilities yourself in order to stay in control and then force the responsibilities upon unsuspecting staff.

Do: Have a mix of top management, young technology enthusiasts, as well as the popular “people’s champ.” While senior managers can make decisions, you will need young go-getters to get them executed and manage conflicts.

Step 3: Form a Strategic Vision and Initiatives

Do not just limit the plan to a comparison of “as-is” and future states, but base your strategic vision on clear numeric benefits that you feel are achievable in a 3-year period.

Don’t: Start a transformation without a clear goal or focus – not only on how to remove past mistakes but also how to consider upcoming challenges.

Do: Build an overall vision with a clear view of how it will affect the upcoming large projects. The key is early engagement.

Step 4: Enlist a Volunteer Army

A large change management program takes months to implement, so you should take into consideration the weariness that will set in after the initial enthusiasm dies down. Hence, you need an army of willing users to test and spread their first-hand experiences and benefits of the change.

Don’t: Push the process to a select group of people without communicating the advantages of being an early adaptor.  

Do: One of the best strategies is to set up an “employee recognition” process for early adopters. Also, while devising such a strategy, try involving their subordinates (maybe through a voting process) as that will promote more volunteers and not alienate the early adopters.   

Step 5: Enable Action by Removing Barriers

Remove obstacles to change; change systems or structures that pose threats to the achievement of the vision.

Don’t: Creep up behind people, while they are testing the new process or technology, with a questionnaire in hand or spread the feeling that “Big Brother is watching you.”Also, do not choose software so difficult to use that it needs additional certifications just to operate.

Do: Set up a dedicated platform for users to post their challenges and allow them to share their good and bad experiences. Have periodic meetings, separately with employees at different levels of hierarchy.

Step 6: Generate Short-Term Wins

Some transformations are aimed to be “Big-Bang” styled, while most companies prefer a phased or even modular approach.

Don’t: Make the mistake of assuming that operational efficiency alone constitutes a win. Real-world managers expect noticeable and measurable ROI.

Do: Make change incremental and not radical in nature. If you follow a phased approach, it becomes easier to accumulate savings from one part of the project to fund the subsequent parts. A good practice is to start with a process that can generate high savings, like strategic sourcing, and then move to the operational parts.

Step 7: Sustain Acceleration

It is easy to start, but difficult to finish. Even after the project is declared a success, there is always much more to be accomplished to make sure weariness does not produce new headaches.

Don’t: Wait for things to go wrong, as is bound to happen at some point or other.

Do: Work closely with the technology provider to keep on encouraging user adoption.

Step 8: Institute Change

Usually organizations only look at fixing their existing problems, and it’s only later that they think of more uses for the solution than was previously envisioned. So it is essential to link new behaviors with organizational success and keep striving for perfection.

Don’t: Be satisfied with conquering known problems, as organizations are known to be forgetful when it comes to rewarding employees and tend to forget past accomplishments.

Do: Appoint a dedicated center of excellence team that can collaborate with different stakeholders and constantly innovate on existing processes and update the teams on new features.

So if you are one of those professionals who aim to conquer humongous challenges “because they are there,” buckle up and remember to use these 8 steps to ease your turbulent journey.

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