Humans in the Chain: Part III – why top executives must lead IBP from the front
This is the final post in a three-part series for eye for transport on why overlooking the humans in the supply chain causes various initiatives to fail. This post will focus on the vital role the CEO and other top executives play in achieving supply...
One of the enduring conversations in our industry is about the importance of getting CEOs to sponsor and support supply chain initiatives. I recently had an interesting meeting with three top executives of a manufacturer in mainland Europe that got me thinking more deeply about this.
The company invited us in to discuss its planned integrated business process (IBP) project to compare our approach to that of one of our competitors. Rather than mirror our competitors approach of prescribing a strictly defined process, we took our preferred tack and focused on the ‘humans in the chain’.
I started our presentation by inviting each executive to write down a short sentence, but using their weaker hands. They duly complied and afterwards I asked them how they felt during this exercise. The responses included “incompetent”, “frustrated” and “uncomfortable”. I pointed out that they felt like this when all I did was to ask them to make a very small change. Then I asked the executives to imagine how all their employees would feel having to implement the significant changes that they were planning to introduce. I pointed out that if they did not acknowledge and address these concerns and feelings from the outset, their supply chain people would likely fall short of their aspirations. This little exercise made a significant impact on them.
In the discussion that followed, the CEO insisted that he fully supported the IBP project. I replied that although that was an excellent start, it was not enough. He was taken aback somewhat so I went on to explain that the number one reason we’ve seen IBP projects fail is lack of genuine commitment from top management. Supporting a team is not the same as active commitment and sponsorship, which involves leading from the front and accepting some accountability.
As an example of how this might look in practice, we recommended that the CEO deliver a series of short, sharp and interactive presentations to regularly communicate the new IBP process to different teams. In every case where we have seen this kind of leadership and communication applied, IBP and other supply chain change programmes have been successful.
What really surprised the CEO, though, was when I told him that in order to show true commitment and achieve sustainable outcomes, he must listen to his demand planners present to him. Effective communication flows both ways, which is why we educate and coach demand planners so that they have the skills and confidence to present to top executives using compelling, board-level arguments. I covered this topic more extensively in this blog post for EFT last November.
If any of this resonates, I would be very eager to hear about your experiences introducing IBP and other supply chain changes in your companies.