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Op-Ed: The Most Important Catalyst For Supply Chain Transformations

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Companies from P&G to Apple have centralized teams intensely focused on supply chain transformation over the past few years—so much so that it is not as much a strategic advantage in and of itself any longer, but a basic necessity to compete in the market today.

What few of these transformation stories talk about, however, is how businesses can differentiate themselves by getting many more employees involved in the change to create sustainable transformation initiatives that continue to pay dividends after the near-term cost savings have been achieved.

Ultimately, engaging staff throughout the organization to drive small and large change initiatives is the ‘secret sauce’ that makes the gains from supply chain transformations stick in the long-run and continue beyond the initial rush. But how can this be achieved?

Reinvigorating Coty’s supply chain

Global beauty company Coty, Inc. is a prime example of the transformational success that can occur when you get the right people together with the right attitude, motivated to work toward a common goal.

Rapidly growing internally and via acquisition, Coty began to see a plateauing pace of change. The company needed to align, integrate and further accelerate improvements in its supply chain to continue to support its growth goals. The process kicked off with asking critical questions like, “How can we go even faster?” “How can we get more people involved?” and “What can we do to inspire innovation at every level of the organization?”

What resulted was a broad, global change program that mobilized leaders at all levels, across all divisions, to generate new revenues, cut costs, increase productivity and enhance quality.

At the root of Coty’s transformation were highly effective “volunteer armies,” comprised of leaders across all levels and functions of the organization, who were passionate about innovating and testing out new ideas to improve supply chain operations. These teams drove forward the organization-wide implementation of changes needed to glean competitive advantage.

Looking beyond the resume

Knowing that highly effective teams are critical to the success of a change initiative is one thing. Having the insight and tools to craft those teams is another.

While traditional methods of forming teams—such as electing a team leader and appointing team members based on skills, experience, function, geography and reputation—often make “logical” sense, we have found better ways to build teams. People who volunteer to help often come from the least expected places.

Bringing together and empowering those individuals who are most passionate about driving value for the organization is the key. These individuals are not only inspired by the opportunity to achieve the company’s vision, but also are willing to put in the time needed to innovate, test out new ideas and accelerate change—even when that time investment falls outside of the typical nine-to-five workday.

Five steps to building effective teams

There are five critical steps to building the type of teams that will make change happen—and stick:

Center the change initiative on a call-to-action. Also known as the ‘Big Opportunity,’ this is a short, compelling and accurate statement that defines, “This is how we can win right now.” Coty’s call-to-action, “Act Today, Shape Tomorrow,” welcomed employees, on a volunteer basis, to make their unique contribution to improving the agility of the supply chain. The volunteer nature was critical, because it shifted the tone of the initiative from “have to” to “want to” and from “top down” to “all in.”

Invite employees to participate. By encouraging employees to join the “volunteer army” responsible for driving the change initiative forward, as opposed to mandating participation, those who raise their hands to participate will be passionate, excited and ready to jump into action—simply because they made the choice to be there. By not requiring participation, the volunteer system filters out employees who may be indifferent toward or perhaps even active detractors to change.

Select team members based on logic and emotion. Attitude and passion toward driving change is just as if not more important in selecting employees to participate on teams as employees’ skills sets and experience. That’s why looking beyond the resume is so critical to identifying those individuals who will be able to mobilize the entire organization around the Big Opportunity.

Let volunteers apply to lead teams. Encourage volunteers to apply for leadership roles on change teams to help further differentiate between those who want to get involved and those who want to lead. Have those who know the applicants best—for Coty, this included site leadership teams from all the plants and offices—read and review the applications to ensure the selected leaders are “doers” who will actually make change happen.

Balance and size the team. When constructing a team, it’s important to make sure there is a balance, or a “diagonal slice” of the entire organization. Each team should contain individuals representing different functions, levels, locations and experiences.

The net result is a team that is chosen not by one team lead’s decision, but by decisions of hundreds and thousands of people.

Putting the teams to work

For Coty, once change teams were put into action, small supply chain innovations cascaded into major transformations. Hundreds of initiatives generated millions of dollars in value via new revenues, cut costs, increased productivity and enhanced quality. It also created a leadership development pipeline as never before.

An even more valuable result of Coty’s change program was a shift in attitude across the organization—one that welcomed ideas from anyone, regardless of rank within the organization. An effective structure was in place that empowered teams with the permission to test out new processes and ways of working with agility and, in turn, transform simple ideas into large-scale wins for the organization.

By shifting the company mentality from leadership by a few to leadership by many, Coty’s response to ideas for supply chain improvements shifted from “only if we have time” to “here and now.”

 

By Kathy Gersch is executive vice president and CMO at Kotter International, the leadership and strategy acceleration firm founded by renowned Harvard Business School professor Dr. John Kotter. She can be reached at kathy@kotterinternational.com.

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