“RISK” is your four-letter word to create opportunities and competitive edge. Developing an adaptive cultural approach for your transition journey will pay dividends for you and your stock-holders.
In the first article we focused on establishing a foundation on how to introduce the concept of “RISK” into your company. We also developed strategies for deploying SCRM with your organization by tapping into the “heart-of-your-company”. Adoption of new concept (e.g., SCRM) to become part of the “heart-of-your-company” is one of the most difficult change transitions that a company will encounter. Without a strong noticeable need for the program like “Safety”, the program will become lost with your many initiatives.
Change is often the most overlooked first step in executing a new program. GE developed Crotonville’s famous leadership and change management practices in 1990’s well before launching major improvement initiatives such as Lean and Six Sigma. We tried to make change last until we were hungry for data-based structured problem-solving approaches. We learned how to collaborate and lead before expecting change to happen “just because it made sense”.
“I used to believe that culture was ‘soft’ and had little bearing on our bottom line. What I believe today is that our culture has everything to do with our bottom-line, now and into the future.” ~ Vern Dosch, Author of Wired Differently with Wally Goulet and Tracy Finneman
If you believe that there is a need to proactively manage risk and make risk an asset that transcribes into a competitive edge, following a structured Organizational Change Management (Figure 1) program will greatly increase the likelihood for success to gain the adoption for your tailored SCRM program.
When addressing the first three steps of the SCRM adoption roadmap: 1) Appetite; 2) Culture; 3) SC Vulnerabilities, we may encounter pushback from colleagues and stakeholders. To address this pushback, proactively incorporating OCM methods and tools will increase the likelihood for SRCM adoption. Proactively managing roadblocks before implementing the SCRM roadmap ( Identify, Assess, Mitigate, Manage) will ensure that organizational alignment institutes your SCRM strategy.
Understanding that every organization has different dynamics and constraints, OCM methods can be tailored to your organization’s business strategy. To enable the acceptance of the SCRM deliverables [ 1) Risk Dialect; 2) Risk Appetite; 3) Risk Assessment; 4) Value-at-Risk ], there are also another set of enabling OCM tools to support OCM execution.
The most common OCM tools provided in Figure 2: Create Organizational Alignment support your organization in the development of a single voice for your tailored SCRM program. Note: There are many additional CM tools than what is provided in Figure 2. Effectively managing this process should be performed by a certified Change Manager. If further interpersonal roadblocks are discovered, Prosci’s ADKAR provides excellent tools to support the Change Manager the support your stakeholders.
Aligning the OCM methods and tools to the SCRM deliverables (Figure 3) will ensure that SCRM implementation is sustainable.
“Leadership is not domination, but the art of persuading people to work toward a common goal.” Daniel Golemon, Author of Emotional Intelligence
In summary, the following steps will support your team to navigate the onboarding of the Supply Chain Risk Management journey:
1) Establish a RISK DIALECT that enables for meaningful discussion to create your VISION/MISSION and ELEVATOR SPEECH on WHERE your SCRM Program is going.
2) Utilize the feedback from your RISK APPETITE workout session to provide the messaging and information required to develop your PROGRAM CHARTER. This feedback will ensure that team will align on WHAT your scope and goals for your SCRM program.
3) Confirm that your STAKEHOLDERs are ALIGNED so that the RISK ASSESSMENT evaluation performed assesses all possible cultural perspectives and ensures that your SCRM program meets deliverables expectations.
4) Create END-TO-END SC PROCESS MAPS to visualize the scope and utilize this platform to start identifying SC VULNERABILITIES. With today’s technology, there are ways to accelerate this insight by modeling your processes utilizing your electronically captured transactional ERP data (e.g., RAAD™). RAAD360™ supports risk assessment, mitigation and what-if analysis on the supply chain data pulled directly from your ERP systems. Data enriched end-to-end SC process mapping will accelerate your visibility to assess and address quantifiable VALUE-AT-RISK SC risks.
5) Transform SYSTEM CONSTRAINTS to identify SC VULNERABILITIES that limit your capabilities from performing at an increased performance level. SYSTEM CONSTRAINTS aligns your end-to-end SC PROCESSES and SYSTEMS.
6) Enable Organization. Suppliers and Customers performance comparisons utilizing FORCE FIELD ANALYSIS so that identified positive capabilities are reinforced and your limitations can be reduced or eliminated. Note: this is very aligned to orchestrating planning across your SC (Planning: Demand, Operational, Tactical, Strategic, Network, Product Lifecycle, etc.). You are only as strong as your weakest link.
7) Collaboratively utilize the THREATS & OPPORTUNITIES MATRIX to frame the need for change as more than simply a short-term threat. Discoveries for framing requires both the identification of threats and opportunities over both the short and long-term. The threat and Opportunities Matrix provide visibility and gains the attention and alignment of key stakeholders. These prioritized threats and opportunities are then translated into VALUE-AT-RISKs that will be PROACTIVELY managed through the use of SCRM methods and tools.
It is in the last four tools (SC MAPPING, SYSTEM CONSTRAINTS, FORCE FIELD, THREATS & OPPORTUNITIES) that the team will start assimilating Step 4 (Figure 4) within the SCRM Transformation journey; melding the SCRM language into your internal company’s language aligned to SCRM’s four pillars (SUPPLY, PROCESS, DEMAND, ENVIRONMENT). Newly aligned language will be the first clear sign that your stakeholders have taken SCRM to the HEART of the company. This SCRM adoption will become to define your transformed culture.
“Every company develops a unique culture and set of management practices that is the result of its unique business conditions, culture, and history. If management systems are imported, there is always the risk of misfit.“ ~ Jack Welch, Author of Jack Welch and the General Electric Management System, Prepared by Robert M. Grant.
Proactive assimilation following proven transformation methods and tools will enable you to ”import” SC Risk Management so that “risk of misfit” is systematically addressed.
In our next BLOG we will discuss continuing the Supply Chain Risk Management transformation journey moving from adoption to sustainability. Please provide your feedback on your thoughts on embarking and sustaining your SCRM adoption journey.
The SCRM Consortium deployment approach is a five-stage roadmap to develop SCRM capability (Education, Awareness, Assessment, Mitigation and Management). While, the first stages are academic, the transition to practical stages is purposeful. Transitioning from academic to practical, SCRM concepts move from general vocabulary, assessment, case studies to alignment (mitigation and management) within “day-to-day” business decision-making and cadence.