Tag Archives: People

Everything is a Change Management Problem

ChangeManagement

Back to Marketing Class

In a recent marketing class, we discussed a case of a startup company segmenting its customers. The startup had two primary customer types that were beginning to require different solutions. The company had to decide which segment to focus on and which one to let go.

Running through the numbers, we came to a clear conclusion that customer segment A would be more profitable with the largest growth potential. The class wrapped up, and we all felt good about successfully using our marketing tools. Marketing lesson accomplished.

After class, I asked the teacher what actually happened to the company. She replied that even though segment A was more profitable, the company went after segment B. The founders and investors all felt better about Segment B, so they decided to take the riskier option and drop A.

I joked to the professor, “Oh, so it really wasn’t a marketing case – it was an organizational behavior and change management case.”

With a smile, she quickly responded, “Every case is a change management case.”

Everything is a Change Management Problem

My teacher’s response has stuck with me. On one hand, it seems so obvious and something I already knew. On the other, it seems like a deep insight – words a wise, gray-haired sage would whisper from the shadows. Everything we try to do within our own team, across the company, or personally depends on changing current behavior. The hardest goals of all require us to change ourselves so that we can then change others.

Change Management in Supply Chain

When skilled change management leaders enter supply chain and operations, companies tend to do quite well. Toyota, for example, rose to prominence through its culture of embracing constant change toward improvement. The Toyota Production System (TPS) is a systematic way to enact change on a recurring basis. Just as McDonald’s realized in the 1950s that their main product is a franchises rather than food, Toyota realized its product isn’t just cars but an improvement system.

As I’ve tried to make changes, I’ve looked to Toyota as an example. The temptation I’ve faced is to take Toyota’s tools and copy their processes completely. When changes weren’t implemented as quickly as I’d like (or not at all), I would get frustrated and wonder if Toyota’s tools really held the answer.

Eventually, I realized they don’t.

Toyota’s problem-solving tools work at Toyota because of its culture of embracing changes TPS suggests. Those tools are great if you’re in that type of environment, but most companies’ cultures are very different.

In fact, the actual tools, numbers, or improvements often become much less important than how you manage the proposed change.

The best ideas, implemented poorly, will always lose to decent ideas implemented well.

How to Change

So how do you effectively lead change? The right answer varies by situation and personal style. Here’s five suggestions to help you find what works for you.

(1) Remember the Primary Issue is Always Managing Change

No matter what type of problem you think you’re trying to solve, there is always a bigger question of “what will I do to get to enact this idea.” Figuring out the right segment to target is one thing, convincing the company that it’s the right thing to do is the real issue.

(2) Spend a Ton of Time Getting Buy-in

I’m an ‘act now, fix it later’ kind of guy. I’m constantly running experiments to improve processes. When I see an improvement, I jump on it and move forward. Why waste time with a less-efficient process? This is often a common mentality within groups of operationally minded people. It’s a skill that helps reduce costs and improve efficiency. But this can also be a weakness when working with others.

Change management often requires a much different approach. People take a lot of time to prepare of major changes. Communicating all the knowledge you’ve gained to the rest of your organization on why the change needs to happen is very challenging. Resistors, supporters, and bystanders emerge, and it takes a lot of work to convince others to change their behavior.

A common thread throughout change management literature is the time it takes to get buy-in. Getting buy-in from your own team of five may take a five-minute conversation, but an organization of just fifty people can take five months of meetings. Bigger companies can take five years. Investing in buy-in upfront can be a frustratingly slow change of pace, but it’s the best way to enact significant changes in larger organizations.

(3) Give Others Credit

If you really care about the change, don’t care about who gets credit. Make others look good, especially superiors, and you have a better chance of your mission moving forward. Even if you’re name is never mentioned, most people will recognize your role if you repeatedly bring others success.

(4) Show Leadership by Following

My favorite TED talk is only three minutes long, and it’s called How to Start a Movement. It shows how a lone dancer at a concert creates a movement to get everyone at the concert dancing. With that dancing movement happening in the background, Derek Sivers explains the characteristics the video exemplifies of how to make change happen.

It’s a fantastic video – take three minutes watch it here: TED Talk – Derek Sivers, How to Start a Movement

My favorite insight from the video is, “The first follower turns a lone nut into a leader.” There’s lots of people trying to enact changes. By becoming their first follower, you can make those changes happen. You can pick which “lone nut” to follow and pick which change succeeds.

(5) Read Switch

Finally, read my favorite business book:

Switch: How to Change Things When Change Is Hard

This book is simply fantastic in every way. It’s entertaining, easy to read, and the advice applies to changes of all types. Whether you want to change your personal diet, change how we address world hunger, or change your company’s procurement policies, Switch has real-life advice you can use right after you read each chapter. I can’t recommend this book enough.

If you’ve already read Switch, Decisive is an excellent follow-up about how to make better decisions.

 

As you tackle your problems this week, choosing between A and B, remember that the biggest issue is how you manage that change.

How Yelling at Your Employees Brings Better Results

How Yelling at Your Employees Brings Better ResultsLet’s pretend you manage Chuck. He’s a fairly good employee most of the time, but occasionally, he really messes up. Whenever this happens, you bring him into your office and yell at him for a bit. Chuck’s next assignment is much better. You’ve done your job as his manager. It’s not fun to yell at people, but someone has to do it.

Or do they?

Yes, it’s true – when Chuck does an unusually bad job, and you yell at him, his performance will almost always improve. What’s equally true, however, is that Chuck’s improvement has very little to do with your shouting. Instead, it has everything to do with random variation and statistics.

Being in supply chain and operations, I have a healthy respect for statistics. Much of the Toyota Production Systems (TPS), lean, Six Sigma, and quality improvement tools are a direct result of applying statistics and the scientific method to production. However, what I haven’t thought of much before is how those same principles of random variation apply to office coworkers just as much as to assembly lines.

What started me thinking about this was a great book I just finished called The Drunkard’s Walk: How Randomness Rules Our Lives by Leonard Mlodinow. In it, he tells the story of Daniel Kahneman, who won the Nobel Prize for Economics in 2002. Mlodinow writes:

In the mid-1960s, Kahneman, then a junior psychology professor at Hebrew University, agreed to perform a rather unexciting chore: lecturing a group of Israeli air force flight instructors on the conventional wisdom of behavior modification and its application to the psychology of flight training. Kahneman drove home the point that rewarding positive behavior works but punishing mistakes does not. One of his students interrupted, voicing an opinion that would lead Kahneman to an epiphany and guide his research for decades.

“I’ve often praised people warmly for beautifully executed maneuvers, and the next time they always do worse,” the flight instructor said. “And I’ve screamed at people for badly executed maneuvers, and by and large the next time they improve. Don’t tell me that reward works and punishment doesn’t work. My experience contradicts it.”

What Kahneman realized, however, is that while the yelling preceded improvement, it did not cause the improvement.

The pilots in training were all slowly improving, but you wouldn’t be able to see that improvement from one maneuver to the next. Instead, their performance was a random variation around an average skill level that was rising over months. When one maneuver was unusually bad, it was just random variation. The same held true for the exceptionally good performances – random variation around the true average skill of the training pilots.

The name of this statistical principle is regressions toward the mean. Whenever an observed results is far from the average, the next result will likely be much closer toward the average. Observations tend to gather around the average in a bell shaped curve.

This principle is widely used in production quality. We calculate upper and lower control limits on a process and expect random variation to occur. It’s only after several repeated outlying events that we intervene and investigate. If processes are within their limits, we just leave them alone. Even if several measurements are below average, we have faith that the next measurements will be higher.

Process Control Chart

Realizing that this principle holds true with humans as well is powerful. All of us will have random good and bad performances simply as a result of random variation. The majority of our performance will regress toward our true average skill level without any outside influence.

So next time Chuck has an outlying bad performance, you could yell at him, and he’ll do better the next time.

You could also watch online cat videos together – the improvement will still occur.

Why not save your lungs some stress?

 

[Image Source]

‘The Johnny Tightlips’ and Two Other Popular Approaches to Supplier Relations

“Before you send that email, there are a few lines I want to take out. We don’t want to share that information with that supplier.”

“Really? But this supplier has done so much for us – shouldn’t they know what’s going on?”

“Not yet. Maybe later – but we don’t want to put any tension on our relationship right now.”

Three Approaches to Supplier Relations

Most companies have a list of key suppliers that you just couldn’t live without. Your dependence on them reminds you of the support you get from best friends, siblings, or even your spouse. But sharing personal information with family and close friends is often easier than sharing business information with your suppliers. What if they take advantage of you? What if they share that information with your competitors? What if they become your competitor?

Navigating your supplier relationships depends a great deal on your business model and the character of the suppliers you work with. Perhaps you could benefit from increased information sharing. Or – perhaps you should hold back a bit more. Here are three approaches to supplier relationships to consider.

The Johnny Tightlips

Johnny Tightlips

Johnny Tightlips is one of my favorite characters from the Simpsons. His catchphrase, “I ain’t sayin’ nothin’,” characterizes the attitude that a surprisingly large number of businesses take. While this arms-length relationship seems cold, it also has served many companies quite well.

The stories of suppliers moving upstream and becoming a direct competitor with their customers are numerous and instructive. For example, Asus was Dell’s supplier when they announced their own brand of personal computers that would compete directly with Dell.

If you’re a fan of poker-like negotiations, then keeping your cards close is highly advisable. Millions of dollars have been won by letting the other party speak while you sit quietly and listen. In fact, using a “pained pause” may be a great tactic to try next time you’re in negotiations. This tactic is described as, “When your negotiating partner makes a too-low offer, sigh, look him or her in the eye and say nothing.” Your silence puts pressure on them to do better, negotiate with themselves, and make a better offer without a word from you. For more on the Pained Pause, check out this Lifehacker Article.

However, relationships with Johnny Tightlips suppliers are only good as good as the benefits they bring. Unless you have most of the power in a supply chain, it’s unlikely that your suppliers will sacrifice much for you. When hard times come, they’ll more likely to switch to your competitors since there’s no loyalty or relationship in place.

Here’s a couple of my favorite Johnny Tightlips appearances:

The Open Book

The Open BookOn the opposite end of the spectrum is the open book approach. Your suppliers provide valuable services to your company – much like your employees. Treating them the same as employees, especially in regard to information, makes a lot of sense.

Being open has a myriad of benefits. Suppliers are able to collaborate with you on new ideas. Because they’re higher up the chain, they bring valuable insights about what efforts they’ve seen previously work or not. They also may have innovative ideas that they’re more likely to share with you because of your relationship with them.

An open policy also can be lifesaving when the road gets bumpy. Suppliers are much more patient when they know what is going on – why payment is delayed or orders are down. Though the rough spots are often the most difficult times for honest communication, that’s when it’s most impactful. A detailed email explaining the situation openly can open the door for more lenient payment terms and with the relationship intact.

Before your open your books completely, here are some important questions to ask:

  • Has your supplier proved their trustworthiness yet?
  • Is there any specific information that poses an unusually high risk if shared?
  • Have sufficient contracts been signed to prevent unauthorized sharing outside the business?
  • If you are a public company, are SEC guidelines – especially insider trading rules – being followed?
  • Have we sufficiently explained the policy to those who interact with our supplier?
  • Are your instincts prompting you to hold something back? Why?

Despite the risks, opening up communication often yields impactful results.

The Game of Kingdoms

The Game of KingdomsA middle ground is a philosophy I call the game of kingdoms approach. Imagine your company as a kingdom – complete with a castle and city walls. Your suppliers and customers are also kingdoms. Some are bigger than you, and some smaller. Just as a king engages with other kingdoms, you work with other companies.

The much larger kingdoms – the ones you’d like to have on your side if a war starts – merit investment in open communication. You want to build those ties in diplomatic ways by sending emissaries and fortifying trade routes. The smaller kingdoms may require less work. Taking a diplomatic game approach and envisioning various castles often helps me make better decisions on supplier relations.

Besides, “inter-kingdom diplomacy” just sounds more fun than “supplier relationship management.”

What’s Your Weapon of Choice?

Which approach do you currently use with your suppliers? How might you benefit from adjusting your communication style?

Share your thoughts in a comment, and be sure to check out our recent podcast where we talk with the former VP of Operations at Skullcandy about vendor relationships and metrics.

[Image Sources: Johnny Tightlips (modified) | Open Book | Castle]

How Skullcandy Rocked S&OP

How Skullcandy Rocked S&OPI’m excited to share with you the first episode of the Supply Chain Cowboy Podcast. I had a great interview with Mark Kosiba, former VP of Operations at Skullcandy. He shared his experience with forecasting, S&OP, and vendor scorecards – all very popular topics on our website right now.

I used to hate forecasting. I thought it took as much skill as tossing a dart at a bunch of post-it notes with numbers on them. But after talking with Mark Kosiba, I can see how a truly collaborative S&OP culture can transform a company. He took Skullcandy from just one spreadsheet to a set of world-class processes that earned Target’s ‘Vendor of the Year’ award. If you want to improve how you forecast, then you’ll definitely want to check out this episode.

You can listen or download the podcast from the link above or check out the full transcript. The podcast will also be available soon on iTunes for subscription.

I’d love your thoughts on what you’d like to hear more of as we record future shows.

Stop Throwing Away What You Learn

Throwing Away What you Learn

My wife and I have a running joke about asking certain types of questions. She will ask me something like “Do you know when Easter is this year?” In an ironic tone, I’ll reply, “if only there was a global electronic network of information that you could access from your phone that would answer that question.” She’ll roll her eyes at me, lightly punch me in the arm, and then pull out her phone and ask Google her question. Wikipedia usually has the answer, and our conversation moves on. Rest assured though that my wife takes great pleasure answering the same way when I ask similar questions that the Internet easily answers.

Even though that question is sarcastic for general questions, it holds real meaning for questions in a small business. “Where do I find the form to request time off?” “Where is our procedure for creating an invoice through EDI?” “What are Walmart’s shipping requirements?” To all these, I reply, “If only there was a company-wide, easily accessible, and searchable resource that would answer that question.” From that idea came our company’s wiki.

Background on Wikis

A wiki is collection of information that can be edited by most or all users of the program. Wikipedia is the best-known example, an encyclopedia that anyone can edit or add information to. Creating a similar, living encyclopedia of information for our business has been incredibly helpful. Being able to add procedures, forms, and other information to a location where any employee can quickly access them allows us to share knowledge and train others better.

A wiki is a powerful tool in sharing knowledge across the company. Rather than needing to explain every procedure, employees trying something new can first search the wiki to see if a documented process can show them what to do. This is especially useful if someone is out of the office for vacation. The wiki empowers others to cover for others whose processes are documented on the wiki – and employees can enjoy their vacation time without phone calls asking for help from work.

How a Wiki can Help Business

The reason a wiki is different from just a bunch of text documents somewhere on a hard drive is accessibility and editability. A wiki indexes information so that you can search and easily find what you need. Finding the “Time Off Request” form is so much easier to find through a search bar than digging through folders in Windows Explorer or asking HR for the form’s location.

Company Wiki Search

Second, a wiki’s true power comes in the ability to edit and update information. When Walmart changes a shipping requirement, I can go to the Walmart page, press the edit button, type the new requirement, and then hit save. The pages are so easy to edit that despite their busy schedules, my team is able to find time to document common procedures. Wikis allow for the ease of sharing information, so that knowledge of processes is not locked away in the minds of individual employees. Without such sharing, we are essentially throwing away all acquired knowledge each time someone is away from the office (temporarily or permanently).

Wikis are also great to help accomplish work that is not performed regularly. For example, every six months or so, our ERP system needs to be reinstalled on a certain machine because of a problem on that machine. The first time, it took several days for me to figure out how to do the install because of the machine’s unique setup. After figuring it out, I jotted some quick notes on the procedure and posted them on a wiki page under the IT section. Six months later, after I had long forgotten what I had done to fix the issue, the machine started erroring again – the signal to reinstall. This time, I jumped on the wiki and searched for the document. My notes popped up as the first result and the machine was as good as new 15 minutes later.

Wiki Options for Small Business to Consider

Company intranets and wikis are nothing new– but many businesses have yet to implement one. Fortunately, adding a company wiki is easy and affordable (there are many great, free options). Here are a few options to consider.

Confluence by Atlassian – $10+

Confluence LogoThis is the system my company uses. It’s not free, but for 10 users, it’s only $10. I like it because it’s very easy to use, has extensive documentation and tutorials on how to use it, and you can edit the theme to make it look more attractive. The last point isn’t important to me, but it helped get executive sign off to work on it (looks and appealing design are important at my company).

Confluence

MediaWiki – Free

Media WikiIf you use Wikipedia frequently, then you’ll feel right at home with MediaWiki. MediaWiki is what Wikipedia is based on. It’s free and very popular, which means there’s a strong community and many tutorials to help you easily install and run it.

MediaWiki

MediaWiki Sysadmin Hub (Installation Instructions)

Tiki Wiki – Free

Tiki Wiki LogoIf MediaWiki doesn’t have quite enough features that you’re looking for, then check out Tiki Wiki. For me, I didn’t want to be overwhelmed and miss my goal of company documentation, but you may want to take your wiki to the next level. Tiki Wiki boasts a very long list of features including the following:

  • Themes, newsletters, banners, and blogs
  • Shopping carts, payment, membership, and accounting tools
  • Friends, surveys, polls, chats, and other social networking
  • Issue tracking and other IT Help Desk tools
  • Spreadsheet, slideshow, drawing, and other office applications
  • Quizzes, webinar integration, and other e-learning tools
  • Many other additional features

Tiki Wiki

Tiki Wiki Installation Guide

WikkaWiki – Free

wikka_logoIf you’d rather go the other direction and want something more lightweight and simple, then check out WikkaWiki. It is designed to be much easier and straight-forward.

WikkaWiki

WikkaWiki Installation Guide

Dokuwiki – Free

Doku Wiki LogoFinally, Dokuwiki is a great option for company documentation because that’s what it’s built for. It requires no back-end database and can efficiently fulfill the documentation needs of a small company.

DokuWiki

DokuWiki Installation Guide

If you have an IT person that wants to do in-depth comparisons and look at even more options, then check out WikiMatrix. There, you can compare dozens of Wiki options and find one to fit your expertise and needs.

A Couple Factors to Consider

With all company tools, it’s important to consider the side-effects and consequences of using it. Here are some things you’ll want to consider before rolling the wiki out to the whole company.

Internal or external – do you want your wiki accessible from any internet connection or only while on your company’s local network? If you want it accessible from anywhere, then you’ll need to put some security login procedures in place to keep the world out of your company’s procedures.

Users and permissions – should everyone in the company access everything? If not, then you’ll need to edit user permissions and groups.

Moderation – will anyone be responsible to moderate and monitor the wiki’s usage? If you have a larger organization, then you may need someone to keep everything somewhat neat and organized.

File storage – we often upload Word and Excel documents to our wiki so everyone can access the latest version of a file. However, since our wiki stores the file within its programming, the program can become quite large as many files are added. Will you upload files to your wiki or just add links to the file’s location on your network?

Use more than text – as explained in my article [article about visual explanations], visuals are often much more helpful than just text. Be sure to include screenshots, pictures, or even video tutorials to make your procedures easier to learn.

Although your wiki may be sparse at first, be diligent in your implementation and building a company resource. We installed ours just 18 months ago, and my teammates and I now rely on it multiple times each day. It’s allowed us to do more and maintain corporate learning as some employees have moved on. Best of all, it empowers everyone in the organization to learn and effectively do more each day.

What does your company use to share its knowledge? Could a Wiki help you stop throwing knowledge away?