- Manufacturers have always been innovators. They know how to perfect their products, optimize supply chains, and grow relationships with customers.
- They’ve developed processes, tools, and strategies over their existence that set them apart from the competition. These strategies have brought them success and made them who they are.
But when it comes to change management, the strategies that made them successful in the offline world do not apply to the new digital era. That’s because innovating a product, optimizing a single process, or seeking out a new relationship is not the same as introducing an entirely new way of doing things.
That’s because change management is more than just changing how things are done. For successful change management, the marriage of people, processes, and technology must also occur.
- Changing people
One of the hardest things to change is people, so identifying different audience segments within your organization is an important first step. Who are the key stakeholders, who are the champions, and who will likely oppose your initiative? Understanding your “people landscape” will help you keep their needs and feelings in mind throughout the change management process.
- Changing processes
To change something that works, you must understand why it works. This way, letting go of the old for something new won’t be as difficult. Leadership on all levels must be at the forefront of changing processes, guiding, educating, and getting teams to maintain course.
- Changing technology
A technology change is stressful for everyone in the organization. Legacy systems intertwined with existing methods and habits keep brands from innovating. New tools introduce new processes requiring transition and retraining, which stresses teams. Getting these three elements in sync is the first step to enacting successful change management strategies. For today’s manufacturers chains, this can include adopting a new way of selling, managing orders, or utilizing an open source B2B eCommerce platform. In this post, we’re going deeper into what change management is, the challenges to look out for, and what steps to follow to manage change effectively.
What is change management?
Change management is a collection of approaches to remain innovative, efficient, and competitive in an increasingly challenging marketplace. It keeps brands resilient and helps them improve their operational efficiency and customer experience.
Real change management inside of an organization has to be aggressive. It starts with communication and getting teams in from the onset. It cannot be made up of just the IT department. It has to include the business. – Justin King
Change management is a long-term process that requires ample preparation before the change, managing the change, reinforcing the change, and solidifying these changes. Thus, it is:
Transformative change is radical in nature and impacts every aspect of the organization. It also involves breaking down constraints that organizations have built over time. For example, old communication methods such as phone and fax present roadblocks in digitizing supply chains. Legacy ERP systems can place constraints on organizations, since they define rigid processes such as establishing what data is accessible to whom.
When the only option is to change and no other alternative exists, organizations large and small will adapt. As COVID-19 demonstrated, companies had to pivot to support remote employees radically. Manufacturers are no exception to evolving market conditions and digital disruption. Rather than reacting to fear and overwhelm, remain proactive and recognize the need to get onboard with the change.
Any large change will spark push-back, and this resistance can come in many forms. Some believe new methods will negatively affect their productivity and earning ability, while others may be unsure about changing long-standing business processes. However, these concerns are not entirely unfounded, so you should understand how to address them.
What are the change management challenges?
There are many risks with asking people to do something different. Even if the change is easy to understand, implement, and carries concrete benefit, it can still lead to negative consequences. Here’s how to address internal resistance, cultural, organizational, and technology issues.
We fear the unknown, lost money, and reputational damage. Teams fear changes to the routine, especially if it threatens their role in the company. For example, sales teams are protective of their accounts, prices, and associated trade secrets. Furthermore, individual sales reps can harbor competitiveness and hostility towards each other. You can avoid this by making communication a part of your change management plan, from meetings to informal conversations where employees can share their concerns.
Buy-in from leadership
It’s entirely normal for some within the organization to resist change. Leaders may not want to spend money, managers fear wasted efforts and resent extra work, and whole departments may not think the benefits are worth the effort of change. Thus, chart out your organization’s goals, include key stakeholders in the process early on, and make them part of the solution.
Human resources and culture
Company culture and company politics usually play a significant role in any transformative project. From sales, product, IT, and management, everyone in your organization has different needs, wants, and agendas. Navigating these challenges and addressing everyone’s concerns must be a priority.
Operational and IT readiness
Preparing for change means assessing how your IT teams, processes, and systems will handle new ways of doing things. Whether you need to build new in-house teams, hire outside help, or implement new infrastructure or technologies, go over your needs before starting your project.
Technology stack and integrations
Businesses utilize multiple technologies and back office systems to manage operations. Examine how they work together and set aside time to address implementation and deployment issues as they arise—plan on implementing new technology with phased roll-outs.
Supply chain and channel conflicts
Manufacturers and supply chains depend on many sales and distributor relationships maintained over different channels. Documenting objections to proposed changes from your supply chain, sourcing, vendor, and procurement partners will get them onboard faster.
How do you approach change management?
Managing digital change is a big and complicated process for manufacturers. Here are 10 steps to help them keep sight of their goals and successfully guide the adoption of new technology.
- Identify your ideal evangelist. An evangelist sets the political and cultural tone of the company that everyone in the organization can rally behind. Since people follow the leaders in an organization, leaders must lead by example and set the right behaviors at the top. Start with identifying the right characteristics of your change agent that everyone in your organization can rally behind.
- Find the right person to lead the project. Individuals leading change must understand your organization, the strategy it needs and have sufficient authority to deliver results. A mix of personality, the ability to get people together and garner support, and project management knowledge will trump technical skills.
- Obtain buy-in from the top. A lack of executive support is one of the main hurdles to digital transformation efforts. After you’ve identified your ringleaders, it is time to propagate the message throughout the management. To effectively drive change and maintain its momentum, management must learn to lead by example.
- Organize a change team. Under the auspices of the leaders in your organization, build a cross-functional team of people likely to promote change. These could include regular employees. For example, you may find that certain sales, product, or marketing employees may have just as many ideas to bring to the table and help promote these in their departments.
- Showcase the benefits: Getting people to understand the benefits of change that takes effort and causes disruption is not easy. Identify ways of broadcasting and reinforcing benefits to all areas of your business repeatedly and over the long term.
- Set expectations: At the start of the project, support and morale are usually high. But over time, expectations diverge, leading to misunderstanding and conflict. Set milestones and discuss your progress to keep participants aligned with objectives.
- Communicate the impact of change. Everyone knows communication is essential, but brands often struggle with it. Manage clear and consistent communication across all channels and create new ones if needed. Determine who is responsible for what type of information, maintaining its accuracy, as well as where it gets delivered.
- Make it part of DNA. Your digital strategy must be part of your organization. Avoid treating change as an add-on, or a side project discussed alongside the existing business. Make it part of the company’s agenda, the topic of meetings and conversation, whether formal or informal.
- Set incentives. Regardless of the business you’re in, money is a major motivator. The right compensation structure will align compensation with your sales strategy and enable the desired behavior. Whatever type and quantity of incentives you choose, they must continuously reflect your goals and be modified as required.
- Don’t forget your customers. After you get your internal adoption, get your biggest customer behind the change. Talk with your most important customers about their concerns and give them the flexibility to offer feedback – this will help you focus on their needs. Once you get them onboard it will be much easier to sell it to other, smaller clients.
Be ready for change
Change is part of business, and your ability to manage change will define your success. Manufacturers can’t afford to fall behind due to the rapid pace of technological progress and changing customer expectations. They must take every opportunity to cut unnecessary costs, grow existing relationships, and expand to new selling avenues. They must also realize that change will come whether they like it or not and adopt radical and sometimes even unpopular decisions for long-term success.