This blog post should put you on the right track with your change management efforts. It is an exciting topic and has many researchers develop methodologies around it. Some of the more popular are:
- Bullock and Batten, The planned change approach
- Kotter, Eight Steps model
- Senge, Systemic Model
- Lewin, Three-step model
I will breakdown how using Kotter’s eight-step model will improve your overall adoption. The Eight Steps model was introduced in his book “Leading Change: Why Transformation Efforts Fail” in 1995. I am happy to hear your feedback on other methodologies in the comments.
Kotter developed his model based on the experience he got as a consultant working with over 100 organizations. As a result, he developed his eight-step model that focuses on organizations, and people don’t change if they do not feel the need to do so. He also emphasizes the need to communicate the vision and the reasons for the change from the organizations’ highest levels.
Kotter’s eight-step model (attach pic)
Every project including the SAP Business Network deployment will need to look at the Supplier Enablement workstream. Supplier Enablement addresses internal and external stakeholders hence the need for more a subjective approach. In this blog post, I focused on the subject of Supplier Enablement, but you can apply these principles to any kind of situation. Kotter’s model provides a step-by-step process, which is easy to follow and also easy to replicate.
Supplier Enablement projects or workstreams require buyers and suppliers to use new ways to collaborate in most cases, which is a significant change in minimal time. The first reaction to change is resistance to change. John P. Kotter (1995) describes Change Management as:
“The most general lessons to be learned from the more successful cases are that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result.”
The project’s budget and timeline bind a project manager, hence the temptations to skip change management phases are big. According to Kotter, the below steps are crucial for the success of a change management campaign. I will try to draw parallels with a supplier enablement project.
Step 1: Establishing a Sense of Urgency
At this stage, the project team needs to identify why the current situation needs to change to the future’s desired status. Overcoming resistance is easiest by moving subjects form their comfort zone to move by themselves when they realize that the current state is not a sustainable, long-lasting one.
Implementing this on a supplier enablement workstream, I suggest keeping in mind both the external environment (the supplier) and the internal environment (employees of the customer). The sense of urgency will be the critical element of your communication package – and should address the question “Why?” and “What is in it for me?”
Look at the threats and the opportunities of your organization by running a SWOT analysis. Use the outcomes as part of your urgency talk track. At this step, you’d need to look at why your organization went ahead with the implementation of the business network.
- Was it to lower the processing cost of invoices?
- Or improve collaboration with the suppliers?
- Would your AP department benefit from a lower number of invoice exceptions?
- Would your suppliers benefit from increased transparency into the invoice lifecycle?
- What happens if we don’t improve these points?
These are just a few examples of where you can begin shaping your messaging.
Step 2: Form a powerful guiding coalition
The project team is responsible for leading the change with shared commitment and enough power to overcome resistance to change. In a change management project, the proper project governance setup must offer a supporting coalition throughout the organization. Support from senior leadership is required to give the initiative sufficient weight.
Your project should have a sponsor, someone from the senior executive level responsible for your initiative’s overall success. It would help if you also formed a team represented by all the stakeholders in your organization that need to contribute to the win.
You need to set clear goals for the assembled team. This will foster an environment of trust and create commitment.
Your coalition needs to
- Share the commitment and acknowledge the need to change
- Have shared sense of the mission, purpose, goals and objectives it’s trying to achieve
- Clearly understand the idea about the roles and responsibilities of each other as well as the performance measures
- Acknowledge the risks and challenges associated with the change initiative and the success factors
- Have transparent processes for measuring success, decision-making, tracking issues, and resolving conflicts
- Have clear communications channels
Below you can see a sample team setup.
Sample Guiding Coalition setup
Step 3: Create a Vision
The project team needs to formulate the project goals into a vision that is addressable to all stakeholders (internal and external) and ensure that the sense of urgency is understood and supported by all affected parties.
To set a clear and appealing vision:
- Align it with the goals of the project and the change initiative
- Ensure it’s easy to communicate and easy to understand
- Provide proof – data to make your case
- Ensure that it is simple enough to be explained in five minutes or less
Here you continue building the case for your change efforts. Looking at the reasons why you went ahead with this project and took the next step to define your goals, i.e.
- have 80% of invoice volume flow through the business network by dd/mm/yyyy, or
- have your top 20 % of suppliers transact with your company through the business network by dd/mm/yyyy.
Step 4: Communicating the Vision
The guiding coalition needs to use all available communication channels to spread its vision and externally to the suppliers. Preferred method of communication internally is top-down. All internal stakeholders need to communicate the same message to ensure that a sense of urgency is created. Only after the initiative has been introduced to internal stakeholders, it can be shared externally (to the suppliers).
Your goal is to capture your internal stakeholders’ hearts and minds – they need to understand that your initiative will improve all involved parties’ processes.
A best practice is to involve the people affected by the change. You can do this by often communicating through various channels and trough, including them in the decision making. A good way is to do it when you are choosing the name of the project. Let the employees recommend project names, and then vote on the best ones.
Step 5: Empower others to act on the vision
At this stage, you will see that resistance to change is very real. Remove obstacles to modify, change systems or structures that seriously undermine the vision, and encourage risk-taking and non-traditional ideas, activities, and actions.
You will need to have open communication channels to capture all the concerns and remove them effectively.
It’s recommended to continuously monitor what works and what doesn’t and identify friction early on. Use gamification to achieve your short-term goals, let the teams compete with each other and celebrate their achievements.
Example: Empower behaviours like No Purchase Order, No Invoice, or mandate the transactions over the SAP Business Network. Go paperless – not 100%, but with 20% of your high-volume suppliers.
These are just suggestions on how to move the needle on your project. You will have to choose the best combination depending on your customer’s nature and the relationships with their trading partners.
Step 6: Plan for and create short-term wins.
By segmenting the end goal into a few short-term milestones, the project team motivates all stakeholders to keep the momentum of change.
Here you can decide what your short-term wins are. You can start at simple milestones as project kickoff and the project name, segmenting your project in sprints, celebrating every successful sprint, or even just operational tasks within the workstreams, i.e. Trading partners contact details validation. Some other suggestions are also, for example, a set of suppliers ready to transact with you on the SAP business network, i.e. ten suppliers milestone? % of invoices moved from paper/email to SAP Business Network? Is it an achieved productivity goal, i.e. reduction of invoice processing costs, or reduction in exemptions?
This part links directly to your project’s vision – stay consistent and shape the short-term wins to support your early project direction and business case.
Step 7: Consolidate improvements and produce still more change.
Use increased credibility to change systems, structures, and policies that don’t fit the vision, hire, promote, and develop employees who can implement the idea, and finally reinvigorate the process with new projects, themes, and change agents.
Communicate often on project progress and achievements.
Step 8: Institutionalize new approaches.
For your internal stakeholders and your suppliers, the only way to do commerce through the cloud-based relationships over the business network is at the final stage. The earlier set vision for the future becomes a standardized part of the company’s culture.
A best practice example is that when your contract renewals are coming up to include the transaction over the business network in the terms. When you do RFx events, have the transaction over the business network as criteria.
Make sure to continually communicate the benefits of the change implemented – for the customer and the suppliers.
Let me know if you have already tried something like this on your projects!
For more info on SAP Digital Supplier Network, visit the SAP Digital Supplier Network Community page.