ADKAR: Procurement Change Management in 5 Letters

Change management is a seemingly “soft” topic that can have a highly adverse impact on hard ROI. If you need a practical framework for change management, I highly recommend ADKAR as a good default approach. In this post, I will evaluate ADKAR in a procurement context and show it can be applied in a few different scenarios.

ADKAR comes from a firm named Prosci that licenses the framework via books, training, toolkits, and even a hosted software diagnostic tool. But, you can just read about it and apply it for free if you like. It stands for:

• Awareness of the need to change
• Desire to participate and support the change
• Knowledge of how to change (and what the change looks like)
• Ability to implement the change on a day-to-day basis
• Reinforcement to keep the change in place

Let’s look at how ADKAR can be applied in a few example procurement scenarios:

Awareness

Consider all the various types of procurement-related projects out there:

• Procurement-driven projects that tie back to procurement-related methodologies such as strategic sourcing. Stakeholders can be as highly distributed as the spend itself and may not be aware of the opportunity that is impacting their budgets and even their day-to-day activities.
• Enterprise-wide system projects such as eProcurement that touch a huge number of stakeholders such as requisitioners. For all the hard work establishing preferred agreements and processes/systems to utilize them, how will you get these capabilities served up to the masses who infrequently have a need for third-party products and services? Their unawareness is generally the largest contributor to maverick spending – not malfeasance.
• Supplier-related initiatives that impact the entire supply base or major segments of it. Do you have a basic supplier communications process that keeps suppliers in the loop regarding your major plans, initiatives, and their impact on those suppliers? Do you have good systems to model the various contacts at your suppliers and communicate effectively and efficiently with them?
• Intra-procurement projects. As much as change can be difficult in terms of influencing suppliers and spend owners / functional partners, the ability to drive change within procurement can also be challenging, especially in a matrixed / “center-led” environment. One classic example is the provisioning of a cloud-based e-sourcing system for buyers to use. The shared system is installed in hopes that it will be used as a shared resource for both individual benefits and collective benefits. However, individual buyers may not realize the downstream (or enterprise-related) impact of the status quo process of using spreadsheets and other local tools to manage their processes. As a result, they may not even be aware of the need to use such a system.

In all these cases, awareness of the need to change is critical, and it must be done with data (spend analyses, diagnostic assessments such as internal/external benchmarking, “voice of the stakeholder” surveys, etc.).

Desire

To quote one of my favorite business books of all time, Jack Stack’s The Great Game of Business, there’s an adage that goes “You gotta wanna.” Or to cite another popular colloquialism and acronym, stakeholders need to see WIIFM (“What’s In It For Me”?).  Some typical WIIFM questions include:

• Why do I have to use this onerous eProcurement system that the procurement department makes me use?
• Why do I have to involve procurement and partake in their grueling “strategic sourcing” process? It seems like overkill, it takes too long, and I’m not sure of its value.
• As a supplier, why does the buying organization not coordinate well amongst its various stakeholders every time there is some type of change to its supplier compliance requirements?
• Why do I, a procurement professional, need to take mandatory training to teach me things I already know when it takes me away from my core objectives of driving cost savings? And why do I need to use our “vanilla” technology tools when my requirements are more complex? I am different and don’t see the relevance of this latest program du jour in my day-to-day life.

You get the picture.  Awareness is great, but without desire, you won’t have a team of Navy SEALS, you’ll have a pack of stubborn mules.

There is a lot to instilling the desire to change, and certainly it does involve both “carrots and sticks” in terms of extrinsic motivators. But there are also a lot of nuances to inspiring the desire within various stakeholders to get them aligned and committed to the proposed change (which does involve some negotiation and true communication – too often change programs don’t acknowledge the valid concerns that affected stakeholders have with regards to the proposed change).

Instilling desire, not just forced compliance, is truly the “moment of truth” when change management is needed most at the detailed level where it matters most, that is, the individual level. There are some more specific methodologies and supporting techniques/tools here that I will not go into now, but will feature in later research.

Knowledge and ability

Knowledge and ability are similar in some respects, but they are also very different when the time comes to actually make the change. Many procurement organizations generally know how to achieve spend visibility, gain higher spend influence, generate value beyond cost savings, etc. But when it comes to having the ability to actually make those changes, the difference between knowledge of best practices and the ability to actually implement them becomes clear.

Ability is about applied knowledge, and it’s not just at a personal level. You can’t simply train up a bunch of individuals on specific practices and techniques when those individuals are working within the context of a dysfunctional management system (e.g., misaligned metrics, processes, cultures). So, this is where nothing succeeds like success. Although project pilots, self-funding, storyboards, and other seemingly incrementalist approaches might seem sub-optimized, they are used so widely because they provide the opportunity to translate knowledge to ability (individually and collectively). This is the classic “train and do” approach. It seems simple, and it is, but it must also be designed thoughtfully.

The most advanced procurement organizations are quite deliberate in defining the various capabilities needed to satisfy short-term performance requirements and build the horsepower for longer-term transformation. This can be related to talent management and defining the prioritized skills that must be developed (e.g., cost management, negotiations, contract law, analytics, supplier collaboration, supply chain, risk management, and change management itself). It can also be related to cross-functional and cross-enterprise capabilities such as dealing with team-based performance measurement, outsourcing, and other areas where abilities much be developed by effective teams – not just high-ability individuals.

Reinforcement

Reinforcement of changes that you’ve implemented is perhaps the most insidious of the change management steps because many business cultures, especially in the West, are much more focused on “effect” than “affect.” In other words, they emphasize short-term programs and projects to create favorable short-term financial effects. In contrast, Eastern business cultures tend to emphasize “affect” (defined generally as a “display of emotion” but relates specifically to the personal and lasting effects of implemented changes). This is where leadership and a more advanced management system come in, for the purpose of tracking ongoing performance and related capabilities for the impacted areas that were changed. Not to bring up another framework, but the “C” (control) in the DMAIC methodology is key to helping automate (if possible) and making the new process/system fail-safe so that performance doesn’t revert to the old way. For example, using automated methods for monitoring maverick spending is a good technology approach to hold the gains on cost savings. DMAIC and ADKAR are closely related, and we encourage you to think about how they relate to each other and to your transformation abilities at your firm.

I’ve only scratched the surface on this topic and will be covering it more down the road. But for now, if you’ve not implemented a good change management methodology at your firm or your clients’ firms, I strongly advocate it. You WILL eventually find yourself using it at a future business meeting and impressing your colleagues and commercial partners.  If you are a provider, a framework such as ADKAR should quite simply be standard fare as part of your implementations.  If practitioners want to see some great examples of ADKAR tools applied practically to e-sourcing, you must check out John Shaw’s presentations and toolkits that are out on the public web (but certainly call John if you want to talk to a deep expert in this area) such as here, here, and here.  We also especially like the toolkit here that shows a role-based matrix that ties stakeholder roles to the outcomes expected at each state of the ADKAR change cycle. Great stuff!

To wrap this up, if the old adage is true that “the only constant is change,” you might as well have a basic framework for managing it, right? In this way, the only other constant will be your ability to implement change effectively – and that’s a good constant for you to have and for others to see in you.