The Importance of Vision, Planning, and Stakeholder Involvement in Procurement Change
Business transformation is challenging, so how can indirect procurement professionals introduce changes effectively?
“A 70% failure rate is frequently attributed to organizational-change initiatives,” writes Dr. Mark Hughes of Brighton University in an article for the Journal of Change Management. This figure is cited, for example, by global management consultancy McKinsey, whose experts attribute this failure to employee resistance and lack of management support.
Following an analysis of such claims, however, Dr. Hughes argues that “whilst the existence of a popular narrative of 70% organizational-change failure is acknowledged, there is no valid and reliable empirical evidence to support such a narrative.”
Dr. David Wilkinson, an expert in ambiguity and emotional resilience, came to a similar conclusion. Dr. Wilkinson told The Oxford Review that the true failure rate is closer to 6% – albeit with the caveat that around half of all projects were rated only “somewhat successful.”
How to manage change, and manage it successfully, is a crucial question for those working in Maintenance, Repair and Operations (MRO). As the findings of a survey conducted by RS and the Chartered Institute of Procurement and Supply (CIPS) demonstrate, after operations, procurement is the most important department for managing change within organizations.
71% in advanced professional roles agreed they have a good or significant opportunity to drive change
The survey, which forms the basis of the 2022 Indirect Procurement Report, also reveals that indirect procurement professionals feel they have an opportunity within their existing role to drive organizational change – although this figure varies according to seniority. While 71% in advanced professional roles agreed they have a good or significant opportunity to drive change, 53% in tactical roles claimed their influence on change was limited.
Here we explore how you can best ensure transformation and change succeed, whatever your role.
Defining Clear Vision and Goals
The starting point for successful change? Have a clear vision of the goal, says Debbie Bowring, President of RS Integrated Supply. “You need to understand where you want to go and clearly articulate that across the organization,” she says.
“Emphasize the overall objective so everyone understands what the goal is and what their role is in attaining that goal.”
Andrew Perry, Senior Vice President, Operations, RS Integrated Supply
Andrew Perry, Senior VP, Operations for RS Integrated Supply, agrees. “The goals of any project, but particularly a transformative one, must be clearly communicated at the very start,” he said. “Emphasize the overall objective so everyone understands what the goal is and what their role is in attaining that goal.”
“At the same time,” he continued, “it is our responsibility as managers to ensure we clearly answer the question “what does it mean to me,” for all of those affected by the change.”
Management must be on board as well. “Collaboration at all levels of the organization is critical to project success, particularly management support,” says Perry.
“Ultimately, those actually working the process and using the systems should have a say on whether a tool works or not.”
Costi Campi, Senior VP, Global Procurement, RS Integrated Supply
Costi Campi, Senior Vice President, Global Procurement, RS Integrated Supply, strongly recommends giving those responsible for using any new processes or systems the opportunity to share their input. “Ultimately, those actually working the process and using the systems should have a say on whether a tool works or not,” she said. “They are the ones who have to deal with any consequences if something fails to meet expectations.”
If you’re responsible for leading change, think about the big picture and clearly connect the transformation to your organization’s purpose and strategy. Creating a narrative around the why and how of changes helps to generate a sense of common purpose among disparate groups of stakeholders, too.
“When everyone understands their roles and has input into decisions, it avoids situations where those new processes or systems are not adapted because they lacked support,” Perry added.
Importance of Detailed Planning in Procurement Transformation
Once vision and goals are defined, it’s time for detailed planning.
“A successful change management program in procurement needs a solid plan to get it safely over the finishing line,” says Renata Rybak-Pazdur, who works with businesses around the world as part of her role with transformation management consultancy Capgemini.
This is particularly crucial when changes affect procurement given how procurement has a wide reach across organizations: “These programs implement new ways of working and leverage new technologies and processes to establish more effective operations.”
Engaging and Involving all Stakeholders
Rybak-Pazdur also emphasises the importance of involving all stakeholders at this stage. This is in part about getting buy-in, but it’s about integrating their knowledge and expertise too. Understand how the change looks and feels to stakeholders: “Processes that are poorly designed or don’t meet end-user requirements make adoption difficult,” she says.
Involving the different groups affected by change does, however, bring its own challenges. As one respondent to the RS and CIPS survey observed, “Stakeholders are from different parts of the business, each with a different view – resulting in protracted approval processes.”
Celebrating Successes and Overcoming Resistance
Neuropsychologist Dr. Theo Tsaousides points out that there is a paradox in that people often say change is hard but at the same time, many want to see change happen. The status quo is comfortable, he says, therefore it is vital to keep a focus on why things need to change. As another participant in the RS and CIPS survey reflected, “Sometimes other teams do not think about the bigger picture and the company as a whole. Thinking can be quite myopic, and people like to stick with what they know.”
“Show the value you can add”
Helen Alder, Head of Knowledge & Learning Development, CIPS
Good communication helps keep conflict and confusion to a minimum. Procurement teams need to get better at publicizing their successes to the rest of the business as well. “Market yourself effectively, show the value you can add, and continue to get that buy-in from the rest of the business – because once you do something that’s really good for somebody, you can shout about it,” says Helen Alder, Head of Knowledge & Learning Development at CIPS.
Rybak-Pazdur agrees that showcasing successes, including the benefits of new processes and digital tools, is important. “Change shouldn’t stop at the end of the project – it needs to be continually reinforced by end-user support functions, which should provide the proper training and reinforcement needed to maintain the change while driving process compliance,” she states.
Rybak-Pazdur also has a reassuring reminder to those managing business transformation at any scale. “Above all, change is an evolution not a revolution,” she says. “It takes time, patience, and hard work to build something truly durable you can be proud of in years to come. Something that has a good finish to it and can adapt to whatever environment it finds itself in.”
Change management in indirect procurement is essential for the successful implementation of organizational change. To ensure success, organizations must have a clear understanding of their goals and objectives, develop a comprehensive plan, involve all stakeholders, embrace ambiguity, engage employees, and foster collaboration. By taking these steps, organizations can increase their chances of achieving their desired outcomes.