By Ignite Excellence

“We plan to continue our strategy of targeted price reduction and improvements to the structure of the business, which are likely to continue putting pressure on margins,” executive-chairman Galen G. Weston told analysts on a conference call. Reported in the Financial Post, July 27, 2007

Where is the supply chain more vital than in perishable-food distribution? Given its market position, the above statement from Galen Weston about the direction of the Loblaw Companies grocery-store chain should resonate with all key stakeholder groups, including investors, suppliers, employees and customers. It would, however, be naïve to think – or even hope – that these groups would form identical impressions upon hearing this statement.

Externally, the impression fleshes out more quickly and clearly: revenue numbers and stock prices are strong indicators of consumer and investment-community sentiment. Internally, the story is different. Understanding and managing the perceptions of internal stakeholders is crucial for operational changes to take root and deliver on the potential to increase competitiveness. Rather than “internal stakeholders,” let’s use the more common “employees, co-workers and bosses” to reference this group, who are the individuals in the middle of the “improvements” to the “structure” of the organization.

What might they say?

• Fictitious Employee #1: “Isn’t it great to work for a company that is responsive to the changing environment? This is why I have loved every minute of my past 25 years at this place; the management here has always been one step ahead of the game. It is never easy, but I am prepared for some short-term pain in order to make the most of the long-term gain.”
• Fictitious Employee #2: “Oh yeah, I have seen these restructurings before. That is actually how I ended up working in this industry. You know, it’s a totally different product, but it really is quite similar to where I came from. If I learned one thing about the restructuring last time: there is some benefit to prolonging the process, if you know what I mean. Fix it too fast, and you find yourself with a pink slip in your hand sooner rather than later. I won’t make that mistake again!”

The above fictitious quotes illustrate how strongly an individual’s past experiences shape perceptions of any situation. Whether they were formed from childhood, previous jobs or experiences outside work, the values that we carry today have been formed by everything that happened to us previously. Do you “eat everything on your plate”? If you do, chances are that was a value in the environment in which you grew up. Even so, you may not have adopted or changed this value based on other experiences. These values are completely individual.

When Ignite Excellence works with clients on effective internal communications, we give people skills and sensitivities to understand different paradigms (e.g., is the glass half empty or half full?), as well as their experience values (e.g., past experiences that shape their views today). A boss, team leader or co-worker will be much better equipped to deal with our two friends above, if he or she has an understanding of where they are coming from and “what makes them tick.”

The orientation of either person could limit the success of improvements. For example, by giving the corporate direction too much benefit of the doubt, employees like Fictitious Employee #1 could hinder the unfiltered feedback that operational-process change requires from those on the floor. On the other hand, the insecurity of someone like Fictitious Employee #2 related to how he or she might benefit or suffer from the change can create a hidden agenda that may never be understood.

There are a number of strong and proven initiatives that can deliver dramatic efficiencies in the supply/value chain of companies and their networks of suppliers and contributors. Understanding a person’s orientation and motivation is necessary to be able to communicate this change clearly and effectively in a manner that they will receive and understand.

Fundamentals in human interaction – up, down and across the organization – can be very effective in fostering the honest communication that is necessary for the right kind of change to take root. Asking the right questions, really listening to people, and managing relationships to deal with conflict and create rapport allow for honest communication. Later in this series, we will cover the various elements that contribute to effective communication of change. Nowhere is this more critical than for those operating in Canada’s supply chain sector.