Rene A. Yates, C.P.M.
Rene A. Yates, C.P.M., Materials Manager, B. A. Ballou & Company Inc., East Providence, RI 02914, (401) 438-7000.
Overview. In both our personal and our professional lives, we are surrounded by change. This change and its increasing rate is perhaps more threatening in our organizational lives. People seek stability and order; change can mean disruption, uncertainty, and the perception of threats of the unknown. Specific functions within a company, organizational "silos" as they are sometimes referred to, are disappearing. The comfort and structure that they have brought to many is continually eroding. To survive in this new environment will require a different perspective, and set of skills to allow us to manage this change and be successful in the learning organization of the future.
The Learning Organization. Technology continues to move at such a rapid pace, that change can barely be identified as an event. Rather, like continuous improvement, it has become a process. Working in this environment requires that we no longer prepare for an event - that new way that things will be done - but rather prepare to live and work in ambiguity. The conditions in which we live are constantly changing, and so must the skills in which we manage ourselves, the teams in which we participate, and the supply chain that is our responsibility to manage. This will require new leadership skills to coach and maximize the value that this process provides to our organizations and their competitiveness.
As we look to the next century, updating skills, for most employees, will be a lifetime endeavor. Those who don't continue to learn and adjust will simply limit their effectiveness in their organizations, and very likely, own careers. Deming once said that learning was not compulsory, but neither was survival. That statement could not be more true today. We so often look outside of ourselves when considering a concept such as continuous improvement, failing to understand that it applies to us as individuals as well as organizations and their key processes. To be successful in this new environment, we must all become students of "Emersonion Thinking" - continually questioning all that we do.
The September 20th edition of the Wall Street Journal stated that knowledge required in the year 2015 is only one percent of what we know today. With information currently doubling at the rate of every five years, the requirement for learning becomes little less than a challenge in and of itself. Consider the fact that a single, weekday edition of The New York Times contains more information than the average person was likely to come across in a lifetime during 17th century England. There has been more information produced in the last 30 years, than the previous 5,000. How to sift through this information, identify those areas of importance to success and improved customer service, and to make decisions that will affect and manage the future will become the new skill set required. The learning organization will be one where a continual upgrade of skills will gradually evolve, not bound by predetermined views of what will or must be, and very likely not even bound by traditional corporate or university walls, but limited only by technology and its ability to bring information to us.
The learning organization might be described as one which identifies employee skills as their most important asset. This will include non traditional skills - not necessarily knowledge itself, but "skills in thinking." What will be important may not necessarily reflect what we know, but rather, our ability to learn. As with any skill, this will involve practice, and as we practice - whatever the course content - we will become increasingly more adept at the process of learning. Common skills required in any organization will include leadership, teamwork, and communication.
Resistance to Change. It is not a surprise to anyone that change is uncomfortable, and although many will not fully admit to it, we all resist change to some degree. Besides a possible loss of status, uncertainty, distrust, and comfort, change, in effect, causes work. We must all reevaluate our beliefs, and look at things from a new perspective. This requires additional effort and time, and it will always be easier to do things the "old way." Often, however, we fail to realize that customers change just as we have as individuals. Looking at trends over the last decade, we can readily see that customers, as a whole, are better educated, less gullible, more impatient and demanding, and expect both quality of product and service. In fact, the former is now really expected, and what determines our choice is really based upon the quality of the service that accompanies the product chosen. The same holds true for our organizations and the customers that they serve. Customers, just like each of us as individuals are more demanding and will seek the best value available.
How do we, as managers, deal with change and encourage others to embrace it? The process begins by accepting the fears that accompany the change process, and understand that for the most part, people will resist change that they PERCEIVE will affect them negatively, and welcome change that they believe will affect them in a positive manner. We might think of individuals performing the role of thermostats. Those devices seek to maintain a stable temperature, and do so by monitoring slight changes to the environment. At the disposal of a thermostat, however, is a responsive process supported by equipment designed to provide a quick response to the "needs" of the thermostat - which is to maintain a stable environment. Human thermostats, however, introduce another variable not found in the mechanical thermostat: attitudes. Those perceptions actually distort reality, and for the individual, become the reality. Just as parents know that a fourteen year old must not drive a sports car, the reality for the child might be the view that parents are over-controlling and just "don't understand." The reality is, of course, that the decision is actually in the best interest of the child, even though it may not be obvious to them at that point in time.
Kurt Lewin, a famous social psychologist, once described change as the process of getting from one steady state to another. Today, even that definition needs refinement. With the ever increasing rate of change that is now a part of daily life, the definition becomes simply one of a continuous process. Lewis did warn, however, that change should not be imposed too quickly, since it shatters the stability that individuals seek, and leads to resistance. It should therefore be accepted as dynamic. It is a part of our lives, and we should understand that as fearful as change may appear, and when dealt with on a regular basis, it does happen slowly; in small increments that can continually be absorbed.
Managing Change. Nicholo Machiavelli wrote in "The Prince and Disclosure" that "there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things ... because the inventor has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who MAY do well under the new." Uncertainty is not something humans welcome, and to put Machiaelli's words in a different light, we might view any change, or new product in the perspective of a product life cycle. Just as products go through a growth and maturity stage, so do processes. Think of products such as home computers, VCR's, and compact disks. Typically, any new product is treated with skepticism and distrust. As the product matures, it becomes a fad - the "in" thing to have. Finally it evolves into the commonplace - total acceptance and incorporation into daily lives. Also consider services such as CNN. Here was an understanding of the importance customers placed on a service - not the celebrity who delivered the service. They concentrated on delivering news in a quality manner, and less so on the popularity of the anchor person. The initial resistance was significant, but as focus remained concentrated on customer needs, new rules for competing in news broadcasting were created. Now, CNN is quoted regularly, and people are proud to be associated with them.
In order to manage change, it is important to move toward leadership. Leaders create vision. People must understand that not remaining in the past is to their advantage. Stories abound of closed business and lost jobs due to insistence on holding on to the past and its successes. In his book, "The Road Ahead", Microsoft's Bill Gates states that success is a lousy teacher, that it seduces smart people into thinking that they can't lose. He also sees it as an unreliable guide to the future, for what seems to be the perfect business plan or technology today, may soon be as out of date as an eight-track player, vinyl record album, a vacuum tube television, or a mainframe computer. Once people are aware of the vision - what the future will require for success, change will be welcomed rather than feared. The role of a leader is to communicate that vision and its importance to an organization, its customers, its suppliers, and its employees. Finally, since one of the largest concerns of change is fear of the unknown, communication must be clear and complete. Part of that process is involvement. That includes discussing honestly what changes are anticipated, the reasons for them, and their implications. Concerns and fears should be addressed, and those affected should be involved in creating solutions. Finally, individuals should have a role in implementing the changes. Involvement is a powerful motivator. It makes individuals aware that their thoughts and ideas are valued, allows for more depth and comprehension of the issue at hand, and breeds commitment to the resultant solutions and their implementation.
Stop The Insanity! Insanity in the business world has often been referred to as doing the same things over and over again, and expecting different results. Although a statement few would disagree with, there remains example after example showing that this simple statement is not understood. From IBM's insistence on what was best for their customer, compared with Turner Broadcasting's success against CBS and NBC by doing things differently shows the importance of not relying on the past. Not to fall prey to this trap, Bill Gates has stated that one of Microsoft's major goals is to continually reinvent themselves - to make sure that they are the ones replacing their products instead of someone else. This is easier said that done, and time and time again, industry leaders have relied too heavily on past successes. The Cabbage Patch Doll craze was a good example of this. Coleco had introduced dolls that had a unique name and personality, and were faced with orders that took months to satisfy. They did the same the next year, but were faced with a drastic reduction in demand. Mattel's Barbie doll, a popular staple for years, attempted to be sensitive to changing times by offering dolls from beauty queens to astronauts, yet slipped when they tried to introduce the doll in Japan. That customer base initially did not find the doll pretty, and did not like them! As difficult as it may seem at the time, breaks from the past do not necessarily signal the end of success. When Thomas Edison was sixty-seven years old his lab burned down. He told his son, that there was something nice about a fire - it destroyed past mistakes! Two weeks later, the phonograph was invented.
Success comes from embracing change in all that this concept means. Primarily, it means focusing on the future, and understanding that the future is not a simple extrapolation of the past. There is no way to manage change, control the future, or benefit from it, if we cannot imagine it. This comes from becoming increasingly aware of the changes happening around us and their implications. Doing something different. Making decisions today that will impact tomorrow. As was said in Alice and Wonderland, "it's a poor sort of memory that works only backwards."
Another skill to be honed for success in ambiguity will be an increasing tolerance for making mistakes. This requires the confidence to try new things, and to view failures as opportunities for learning, rather than a source of embarrassment. A child learning to walk fails an average of 700 times; Edison failed by ten times that amount before inventing the light bulb. In each case, determination and acceptance of failure helps reshape the next attempt until success is finally achieved.
Determination in and of itself, however, does not guarantee success. Perhaps the most well known example of the concepts discussed thus far, might be the Warner Bros. cartoon series "The Roadrunner." Time and time again, episode through episode, the determination of the coyote is to catch his adversary is unwavering. However, in each attempt - and resultant failure, he refuses to see past his compulsion, and what has caused the lack of success. In so doing, he tries the same principles over and over again, with "new improved" equipment and technology, only to find the same sad results. There are a number of common themes in the cartoon series which are enlightening. First, the coyote's failures are always of his own doing, sometimes the result of his insistence on single sourcing, namely Acme Products. When he fails, he redoubles his efforts, but never changes his focus. He gets ready, fires, and then aims! In most cases, gravity, and inertia are his worst enemies, and "established rules" cause him the most grief.
In his article published in the May, 1995 issue of Management Review, professor Oren Harari draws some interesting relationships between these two cartoon adversaries and how they apply to organizational leadership. First, he points to the characteristic of being experimental versus being procedural. That we should not be bound by established procedures and the "way things are." We must be flexible and willing to go around obstacles that may be in our path. We must realize that sometimes obstacles are only perceptions, and if we persist we may very well be able to pass right through them. We must create an environment around us that encourages failures and "intelligent" mistakes, and understand that from this will come improvements that occur in leaps rather than steps. We will then see response and flexibility that occur with blinding speed.
The next characteristic exhibited by the series is the need to work smarter, not harder. The roadrunner's goals are achieved by thinking and planning ahead, to achieve the goal with as little effort - and pain(!) as possible. Working harder and harder doing the same thing over and over again, leads to frustration, not results. The coyote is not stupid. He has competencies and skills which are used in sometimes very cunning ways. But he uses his analytical and intellectual skills in a very narrow and limited manner. He continually plans for the outcome he feels is inevitable, and fails to see other options. The concepts of "what if" and "variance analysis" are not in his vocabulary. The spirit of the roadrunner is what lies ahead; the coyote meticulously plans based upon what has happened in the past. He is obsessed with beating the competition, while failing to understand that those who make the first moves not only become the leaders, but perhaps more importantly, define the game and its rules. Whether in the purchasing profession or in any area of an organization, while competitors need to be observed and respected, the real challenge is to define change and create ambiguity for those who follow; customer focused change that we have understood, controlled, and established as the new benchmark.
Implications For Purchasing. The November, 1995 CAPS report entitled "Purchasing and Supply Management: Future Directions and Trends by Drs. Carter and Narasimhan show that the future of purchasing will evolve into a more strategic environment, and will increasingly come under the influence of the learning organization. As functional silos become increasingly obsolete, classical functions such as marketing, manufacturing, engineering, purchasing, finance, and personnel will become less important in defining work. Flattening of purchasing and supply management organizations will continue, due to the increased use of horizontal teams. As organizations continue the need to control costs, the strategic role of the purchasing and supply management function will grow in importance. Emphasis will shift from pure purchasing expectations to a fragmentation of functional expertise, that is to say, a broader distribution across procurement teams. In this same fashion, fragmentation will occur in other disciplines as well, requiring a broader range of skills from purchasing personnel. Skills for the next decade will become non-traditional: computer literacy, project management, global sourcing, cost management, information technology, and problem solving. They represent a much broader view of an enterprise, and yet are indicative of where purchasing and supply management's future rests. This will be evidenced by a new evaluation system for the purchasing function, where emphasis will no longer be on price and supply continuity, but rather on value. Purchasing and supply management will evolve beyond contributing to profit, and be challenged with creating and maximizing value. Our future challenge will be to develop and deliver products and services that are of defined benefit to end customers - identifiable, cost justified elements that satisfy a need. The challenge will be to identify and deliver those values with the speed of a roadrunner.
How does one become ready for this shift? Certainly not by becoming a coyote and doing more of the same, with the same skill sets as in the past. We must embrace change and use what it offers to maximize OUR value, becoming more strategic in nature will provide a broader base from which to provide that value. The learning organization will provide the forum for broader training and non-traditional education which will include distance learning. Performance enhancement systems should provide us with motivation - and none of these elements must be perceived as a threat, since they will provide significant opportunity to thrive in a world of ambiguity.
The opportunities, for those who embrace them, are three. First, is the chance to take on the role of a coach, by leading cross functional teams; educating advising, and developing them. Second, is the opportunity to embrace the "3R's" - reorganization, restructuring, and reengineering. As intimidating as these terms have become, they will not go away until change stops, which is highly unlikely. Because of the resultant structural flattening, organizations will need highly skilled, broad based managers, and since purchasing and supply management's value n will only grow in the next century, procurement personnel with those skills will be a valuable commodity. Finally, and ironically, the term "practitioner" will become more significant. Although broader skills will be required, managers will be going back to work. There will be a shift from the traditional, hierarchical structure of personal development to breadth in learning and more importantly, capability. The closest model for understanding this concept is that of a physician, or an attorney. During their careers, their growth and respect does not come from managing a health care facility, or becoming a managing partner in a law firm. Rather, prominence comes from innovating and performing medical procedures; from creating precedents in law and winning trial cases. The same will be true in organizations. Those who succeed will be the innovators, the performers who create value and achieve results. As coaches of procurement teams, we will be asked to develop "professional units" that have the skills, abilities, and education to achieve world class results.
Become A Crab! Change, and the ambiguity that it brings, will become increasingly commonplace for all of us as the next century begins. It can be viewed in its traditional sense as a threat; one that brings uncertainty, trepidation, and something to be avoided. Ambiguity can also be viewed a friend - an opportunity for growth. That growth can extend well beyond traditional purchasing and supply management roles, increasing our importance to an organization, and therefore providing security rather than consternation. Either road can be taken, and the choice is there for each of us to make.
If the choice is to join the Roadrunner, we may also consider taking to the sea and considering the development of crustaceans. Their name is derived from the crust like shell that surrounds their body. This exoskeleton is impregnated with calcium carbonate and turns into a tough, hard outer shell. This shell is shed at intervals, making continued growth of the animal possible. The shell splits along its back, and a crab works its way out, and grows considerably before the next shell hardens. Failing to shed this shell would not only inhibit the animal's growth, but probably cause death.
Our challenge is to break out of our shells and welcome new stages of growth. To continually question what we do by stepping outside of our perceptions, leaving the security of what we have done so well, and viewing things as they might be. We must know who our customers are, what WILL change in their needs, and be there for them, as solid in service as a crustacean's shell. We must not be afraid to leave the comfort of tradition, because it may restrict our potential, or even be fatal to our careers or organizations. The future and its ever increasing rate of change will belong to those with flexibility and response, and not confined by the past. Oddly enough, the secret to living in this ambiguity may be to become a crab!
R E F E R E N C E S
Harari, Oren, and Chip R. Bell. "Is Wyle E. Coyote In Your Office?" Management Review, May 1995, 57-61.
Labovitz, George H., Ph.D., Quality Management Skills, Organizational Dynamics, Inc., Burlington, Ma, 1994.
Pedigo, Susan. "Blasting Away The Old Rules Of Business and Work." Wyatt Communicator. Fall, 1994, 9-13.