A procurement expert’s guide to effective change management

The term that dominates the business lexicon today is transformation: digital transformation; process transformation; etc. Transformation means that change is inevitable. and in today’s ever-evolving business environment, change is occurring at a faster rate than ever. If a company wants to improve and grow, then change must occur.

But not everyone in your organization feels the same about change. Whether your people do or do not adapt to change easily, there’s always the question that must be answered in order to oversee successful change management – Why?

For people that welcome change, the “why” is “Why aren’t we doing things differently and more effectively.”

Those that are resistant to change usually think the status quo is working and ask, “Why do we have to change?”

Change management is one of the hardest issues to tackle and it’s easy to see why that is the case. The thought that the very essence of their job is changing or that entirely new systems are being put in place can be overwhelming for those in your workforce. That’s why it’s essential to answer the “why?” in ways that are understandable, not just to the leadership but to the people that will be most directly affected.

Change management challenges by the numbers

In a recent  webinar with Art of Procurement, attendees were asked what they considered to be procurement’s greatest change management challenges. Their responses were:

31% passive aggressive resistance

28% lack of executive support

23 % not actively managing the change that needs to happen

17% not communicating the “why”

Even though “why” is at the bottom of this list, in reality all of the items above need an explanation as to “Why is there a lack of executive support?” and “Why is the change that needs to happen not being actively managed?” The main challenge of passive aggressive resistance is likely just a reaction to the other three challenges…and the hardest to affect. So how do you mitigate that resistance?

Steps to successful change management

The major mistake that companies make when it comes to implementing change is to start the process without a well thought out change management plan in place. That needs to be accompanied by an explanation as to why the change needs to happen and how that change will benefit not just the company overall but also everyone who will be impacted.

When creating the plan, it’s essential to understand the implications of the change so that they can be communicated to all involved. The plan needs to be detailed, outlining the steps that need to be taken, a timeline, and the resources required.

There are three major steps to follow to make change management successful:

Get the change team together

Change management will only be successful when everyone impacted buys into the process and understands the “why.” Each member (or group) has a unique role to play. Everyone needs to be seen as a change management agent.

1. Get executive buy-in and sponsorship – Sponsorship by the executive suite is essential. Without it, even the best change management plan is bound to fail. But executives, like everyone else impacted, can be resistant to change. And their “Why?” is bound to be different than those down the chain of command, looking at how the change impacts every function in the company, not just Procurement. This buy-in involves more than just sending out an email to the company and delegating any further actions to others. It means being accessible to change managers each step along the way; being willing to make the necessary decisions; and being willing to participate in the change process. When it comes to major changes in Procurement, an executive committee can be even more effective, where those across the C-suite can hash out tough decisions together and create some level of cohesiveness.
2. Involve middle management – This group can be the make or break for change, since middle management is the group closest to the frontline employees whose jobs will be most impacted. One way to ensure change goes smoothly is to get middle managers involved early in the process, even before the plan has been finalized. Don’t just tell them what’s going to happen. Get their feedback; run ideas by them; make them feel how important they are. Build trust with this level and that will redound to the rest of the employees.
3. Develop a team of change champions – Change champions exist at every level of the company and are often the people that other people listen to. Major transformations have multiple layers so champions should be recruited at the layers that are appropriate based on the information you can share. These people can be part of your UAT testing, for example. If you get them engaged, they’ll bring the rest of the workers along with them.

Make the message clear

It’s impossible to make the message clear until you define the vision. Let people know why the change is necessary. Articulate not just the reasons behind the change, but also what benefits will be realized once the change is implemented.

1. Engage early – The earlier you make people part of the process, the earlier you can mitigate resistance to the changes necessary. Engage your change champion and middle management teams, get them excited about the change, and explain how they’re going to benefit from it. These are your main communicators so their excitement can transfer to others.
2. Be honest about the coming changes – People need to know the truth. If you attempt to downplay the amount of work needed or how their job will be impacted, you will not only lose trust; you’ll build even greater resistance. Be as forthcoming as you can be upfront, guiding employees through a strategy on the “what-ifs” that could happen.
3. Show empathy – People are often resistant to change because they are scared of what the future holds for their career. Make it clear that you understand their fears and the issues they have with the change. Then reiterate why the change is necessary and how it will help the company.
4. Connect the dots – Usually a number of functions are involved in any major transformation so it’s important to make clear to everyone involved why there are changes going on in each department and how they will impact the overall result.
5. Make bite-size changes – Change has to be seen as achievable to get cooperation and buy-in. So instead of focusing on the end result, break the change into smaller pieces. Set up milestones along the way with reasonable timeframes. Then make sure to acknowledge those individuals or teams as they complete each step.

Keep the change going

Failure to implement change is often due to the attitude that once the initiative is complete, the job of change management is over. Success has to be measured over time. Too often, reluctant or frustrated workers can go back to their old habits, defeating the very purpose of the initiative.

Measuring change management success is a delicate balance between utilization and adoption, between qualitative and quantitative results, between hard numbers and emotional reactions. For instance, you can measure the improvement in the number of invoices processed, but are the stakeholders happy with the new process? If they’re dissatisfied, the change will not stick. But there are steps you can take

1. Establish metrics and controls – Measure quantitative improvement by tying KPIs to increased productivity, number of transactions, turnaround time, etc.
2. Use focus groups and surveys – Give users the opportunity to discuss how they like the new system or process and have fully adopted it. Do they feel as though they are getting the value out of the change that they were promised?
3. Identify the resisters – One dissatisfied user can negatively influence others, so once that employee is identified, have a frank and open discussion making it clear that refusal to adhere to the change or attempting to circumvent it is unacceptable. Try to convince them that the change will help them as well as others.
4. Make continuous improvements – If you see consistent feedback that points to holes that need to be buttoned up or areas that need improvement, be ready to come in with different tactics to get people back on board.

Conclusion

Change management is one of the hardest issues to tackle. It’s really about the spirit of the change versus what you’re trying to get out of it. How you manage the change will ultimately determine whether you are going to be successful or not. Get ahead of any concerns leaders, change champions, and the workforce at large may have. Continue to stress how this change will help them do their jobs more efficiently, make them more productive, and help the organization grow.