As we look forward, it is helpful to also look back and gain perspective. Today’s supply chain is even more global than two years ago… It is more aligned and proactive than it was five years ago. We are making progress, but there are still critical challenges to address. It is still not working well… experience tells me we can do better.
Typically, even though organizations may be consolidating for cost management and scalability purposes, the walls of the individual functions, channels and regions have become even thicker. As a direct result, it is harder for you, as a leader, to build end-to-end supply chain functionality in an ever-changing global marketplace. It has become increasingly difficult for you to gain agreement on specific, customer focused initiatives or broader organizational change.
This is not a technology, process or policy problem – it is a people problem:
People make purchasing decisions…
People change processes…
People establish policies…
People make system decisions…
People decide to build and maintain organizational walls
Although we tend to observe and react to events (or the fires they cause), it is critically important to really look at and assess the root cause of your problems. Go ahead, rip that band-aid off and look at what is really causing the infection –
Your “Core System” Is Flawed
Recently I was speaking with a client in the SCM space. He was trying to understand why he could not consistently get the global business results he was looking for and how he could change the organization to drive consistent results. What did we find?
The Organization Was Not Designed For Effective Interaction And Optimization – The “System” Was Broken.
The bottom line – his organization was not designed to function as a unit… a single system. His division was not performing at optimal levels because of suboptimal organizational design. Instead of deploying processes, policies and technologies to leverage various forms of optimization across the spectrum, his organization consistently tried to implement old practices with new tools and technologies – without the support of the people and other organizations that were affected.
They didn’t take the time and make the effort to understand why the old practices were failing in the first place – making the poor assumption that a new process or technology would fix the problem instead of understanding that no policy, process or technology change can be successful without recognizing the people component… and the system as a whole. As a result, my client was not realizing the potential value of the organizational change.
We were able to work together to create a plan around “systems thinking” that incorporated not just his division, but the organization as a whole. He was able to leverage his new knowledge of “the system” to work across functions, channels and regions to get the very best from the system as a whole. As a result, he is now seeing strong, consistent results on a global basis and the business is growing quarter on quarter.
Interacting With The System As A Whole Provides A Distinct Advantage.
My client is not unique in his challenge – the lack of a systems approach is pervasive in most organizations – just as sub-optimal business results are. Many leaders implement policies, procedures or technologies without ever looking at them in terms of the effects on the “system” and its people… and then wonder why they have not gotten the results they anticipated. Millions of dollars are wasted each year on failed projects for this very reason.
The reality is that today the average company has variant policies, procedures and technologies across the different functions and channels that preclude them from realizing exceptional results. Leaders typically focus only on their area of responsibility. Critically important, to be sure. However, the challenge in this methodology is that your organization may have channels or functions that operate well in and of themselves, but they don’t integrate well together. Consequently, the organization suffers as a whole.
Progressive Leaders Are Recognizing How Important Aligning The Various Parts Of The Organization, And The Interrelations Of Those Parts, Is To Their Success.
As one of those leaders, you need to ensure your focus is on matters of ongoing organization and feedback. You need to diagnose problems, not by examining just your pieces of the organization, but by recognizing the larger patterns of interactions between the parts of the integrated whole:
- Focus on the outcomes you want from the organization in terms of the customer and your overall business results
- Work backwards from your ultimate goal to determine what you need from the system to succeed
- Understand that you are not an island and in order to be successful, you need to consider and integrate all the moving parts
While most of us like to consider our business as unique and different, the reality is that the more congruency you can build into your organizational systems, the more you increase efficiency, visibility, innovation and knowledge management – the more potential you have to maximize your business results.
While there may be functional or cultural differences across the spectrum, the more you can partner to translate and align, the more likely you are to succeed on a grand scale. Work hard to understand your counterparts and build consistent policies, procedures and technologies together. Each and every disparate instance adds to the challenge of building effective supply chain solutions that support holistic planning and deployment.
What do you have to gain in addition to the obvious? How about:
- An Innovation Incubator
- Connectivity That Breeds Efficiency
- Cross-functional/Vertical Leverage
- Improved Business Results Across The Board
- Competitive Advantage Fueled By Solving Customer Issues Efficiently & Effectively
How Can You Contribute To Creating An Effective “System”?
Please engage the discussion and let us know how systems thinking can help you to exceed your potential. Need A Trusted Advisor to help you become the very best leader you can be while maximizing your organizational results? Contact me at Sheri.Mackey@LuminosityGlobal.com.