Have You Defined Your Agile Supply Chain Culture?

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We hear an increasing number of companies wanting to develop an “agile culture”. But as we talk with those leaders, they find it difficult to illustrate exactly what an agile culture means to them.  Do they want to move faster? Do they want to take more risks? Do they want to give more decision making to employees and teams? Do they want to adopt Agile IT principles, using scrums and sprints to develop minimum viable supply chain products? This uncertainty makes the journey to an agile culture nearly impossible.  Employees hear the rhetoric, but the destination is foggy, and the journey is fraught with risk. How do you want me to work differently, to make decisions differently, or to collaborate differently? What will happen to me when I make an “agile decision” and it does not go well? “(COVID) forces us to step back and ask ourselves, how is it in moments of crisis we are able to get so much done so fast? How do we continue that pace in a more normal environment?” - Bob Swan, CEO, Intel To be sure the COVID-19 pandemic has heightened the industries focus on agility. While there is opportunity in crisis, we must be purposeful in learning how certain models of decision making have helped companies survive (and thrive). In a survey done before the pandemic, we found the top Supply Chain agility characteristics to be focused on responsiveness, adaptability, and coordination (see figure 1). Company stories of agility during the pandemic confirm this. The disruption required companies to go beyond traditional models of organizing to action, using focused, dedicated teams to move quickly to respond to ever-evolving conditions. The challenge is that under normal conditions many companies do not operate in alignment with these characteristics. In a study on organization culture prior to the pandemic, we found that 75% of executive respondents (director and above) believed that decisions were made quickly by those closest to the issues. Only 36% of individual contributors (your average employee) felt the same way. We found that executives were 9% more likely to view their companies as change agile and were more than twice as likely to be involved in coordinating solutions across functions or business units as individual contributors. The way in which many companies operate is not responsive, adaptable, nor is it coordinated. So how do we define an agile culture in a world that is increasingly requiring companies to respond to myriad challenges and disruptions? How do we define agile, and how do we move culture? The answer is to focus on decision-making. Company culture can best be seen through, and influenced by, the way in which we make decisions. Want to be a culture focused on customer experience?  Then ensure that decision teams, decision models, and decision priorities focus on the customer experience at the point of the decision. Companies looking for an agile culture should diagnose the responsiveness, adaptability, or coordination of their decision processes. They should consider how long it takes executives, teams, or individuals to process information, to problem solve, to make decisions, and mobilize people to action (see figure 2). One of the hallmarks of successful companies during the pandemic is their ability to move past “bureaucratic” decision processes, engaging small teams to make quick decisions with imperfect information. While there is risk of failure, the risk of doing nothing is greater, and so the organization drives an entirely different model of decision making. It is this new model of decision making that serves as the foundation for an agile culture. When you or your team are engaging in a decision, ask yourself the following questions: Who is involved in the decision? A small, empowered team or a broad community? How do we use data? Do we use the best data we have available, or do we look for “perfect” data? How do we make the final decision? Do we vote or try to reach consensus? What is important to us as we make the final decision? Cost?  Risk?  The Customer? Can we take risks? Do we know the impact of failure and are executives OK with that? What do we escalate? Do we force the team to make decisions, or do we escalate everything and slow down the process? How do we learn? Do we use failure to iterate and get better, or do we sweep it under the rug? The journey to an agile culture is a long one and can best be started by making clear what “agile” means to the supply chain. By using decision making as an artifact of culture, you can concretely define for employees what agility really looks like. You can define how they should process information differently, how they should make decisions differently, and how they should mobilize people to action around those decisions. The journey to an agile culture is less foggy and less risky when they have a roadmap outlining what those agile behaviors look like. Ken Chadwick VP Analyst Gartner Supply Chain Ken.Cha[email protected]

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