Managers can deliberately initiate organisational change. It can either evolve gradually within the department, be imposed by specific and compelling changes in policy and procedures, or arise from external forces, Ronald Mlalazi (MCIPS), Education Manager at Commerce Edge Academy, tells SmartProcurement.
In his 10th article for SmartProcurement’s World-Class Procurement Practice series, Mlalazi discusses how good change management can add value and improve supply chain performance in organisations, leading to an improved bottom-line and sustainable profitability.
The series is based on Chartered Institute of Purchasing & Supply (CIPS) unit content and on recent research done by Commerce Edge Academy. This month’s article is based on Level 5, Unit 1, and ‘Management in the Purchasing Function’.
For change to happen, somebody has to lead the way and alter the usual way of doing things. In as much as it is inevitable, the successful implementation of change largely depends on the people and their practices, says Mlalazi.
There are four interrelated pressures that can drive change, each bringing about organisational and individual conflicts:
- Outsourcing and the continual redefinition of what constitutes an organisation’s core business.
- The distribution of work across different people, organisations and locations, and the extent to which this makes work fragmented.
- Changing demographics and expectations that create an employee’s, rather than employer’s, market.
- The double-edge sword of technology, which enables people to do more but tempts organisations to do too much.
As a result, managers have come under increasing pressure from the imposition of targets, performance management systems and league tables against a backdrop of global competition, technological change and the drive to maximise shareholder value.
Sources of change can be either internal or external to the organisation. Internal pressures include profitability, re-organisation, change in culture and conflict between organisational components such as departments and people. External forces are market competitiveness, legislation and the environment, e.g. the impact of procurement on corporate social responsibility and green procurement initiatives.
“A good change agent will help people see the need for change and gain their voluntary willingness, teach them the skills to understand change, manage the fear associated with change by providing training programmes and make the learning experience fun,” says Mlalazi.
Managing and implementing change requires more skill than just the ability to plan, organise, direct and control. A purchasing manager needs to be a good leader and cultivate trust and belief and win the admiration of his or her subordinates.
It is important, therefore, that a manager must have a sound understanding of the business and the department and genuinely believe in the need for change. “Why are we changing?” needs to be adequately and confidently answered if maximum cooperation is to be gained at the onset. In many instances people resist change not because they don’t want to change, but because they don’t know why they should change.
Procurement managers can unleash their subordinate’s greatness by following the eight-step approach to successful change management:
- Creating a sense of urgency among the team players.
- Building a winning team, mentality underpinned by change leadership skills.
- Creating a roadmap with a vision that is clear and uplifting.
- Communicating the vision and the strategy in order to induce understanding and cement commitment.
- Empowering action in order to remove all obstacles that can stand in the way of the vision.
- Producing and celebrating short-term wins to keep the momentum and the winning spirit.
- Progressing by consolidating early changes and creating wave-after-wave of change.
- Making change stick through nurturing new culture and developing group norms of behaviour and shared values.
Some of the skills required by a purchasing manager to effectively implement and manage change within the purchasing department are:
- Interpersonal skills – adopting the Japanese style of human management, involvement.
- Persuasive or influencing skills – answering the question, “why are we changing and why now?”
- Delegation skills.
- Coaching and counseling skills.
- Motivating skills, be a leader.
- Negotiation skills.
- Communication skills.
The successful management of change is essential for continued economic performance and competitiveness. The efforts made by management to maintain the balance of the socio-technical system will change peoples’ attitudes and influence the behaviour of individuals and groups, and thereby the level of organisational performance and effectiveness. Tools and techniques that procurement professionals can adopt and customise to their operations include:
- Positioning of the Purchasing department within the organisation.
- Aligning procurement activities with business objectives.
- Understanding the importance of organisational culture.
- Tools for positioning an organisation through decision making.
- Managing team performance.
- Understanding the change management process.