Author's note: This is the second in our four-part online series of articles on teaching leadership to supply chain managers. The series was introduced by the article Four keys for unlocking leadership potential," which appeared in the Q2 2018 issue of CSCMP's Supply Chain Quarterly. The first article in the series, "Teaching leadership: How to reach non-supply chain audiences" investigated how to use the "human element" in presentations and articles.
Most of today's graduates in supply chain management have a strong quantitative analysis background, and this trend is only accelerating as technologies such as artificial intelligence and machine learning reshape supply chains. In most supply chain management undergraduate and graduate programs, we teach our students to make their business cases using math, science, logic, and sophisticated models backed up with facts and details. These are the guts of every capstone project and thesis defense in our field.
But how successful is this method for driving changes at a large corporation? Not very. For one thing, large corporations are made up of all kinds of people, not just engineers and scientists. Think about all those colleagues who majored in art history, foreign languages, political science, and philosophy. What motivates them? In fact, many organizations—especially companies who sell fashion or trendy items to consumers—are led by artistic or marketing "geniuses." These creative geniuses, as well as most "regular people," are not quantitatively trained and are typically not swayed much by logic and details.
So, what does persuade most people to concur with an argument? In many cases, it is emotion and vision. Recent events in the United States have clearly demonstrated that people will overlook the lack of any facts or logic if presented with a stirring speech filled with vision and emotion.
What is VELD?
What this tells us is that there is more than one way to persuade people. Aristotle figured this out over 2,000 year ago when he wrote about the three modes of persuasion: logos (logic), ethos (trust), and pathos (emotion).
At the Massachusetts Institute of Technology (MIT) Supply Chain Management Program, we have borrowed from Aristotle and built upon his concepts to invent the "VELD" model, which stands for vision, emotion, logic, and details. Let us explain each of these methods of persuasion in turn:
Vision: The vision method involves persuading people to change by using statements that paint a picture of a compelling future state, including broad changes and paradigm shifts. These statements often focus on the big picture, global issues, and future possibilities (with no details). They can arouse energy and zeal for pursuing the mission.
Emotion: The emotion method involves using statements that provoke a feeling that can generate a desire to change. There is both a "good side" and a "bad side" to this method, and both sides are very powerful. With the good side, we use statements that invoke feelings such as loyalty, fairness, righteousness, values, principles, empathy, and tolerance. Such statements will often include phrases such as "...it's the right thing to do," "they deserve," and "we owe them." For the bad side, we use statements that invoke feelings such as greed, jealousy, arrogance, ego, entitlement, and intolerance. Phrases will often include "we deserve," "they owe us," and "we first." (In our program, we obviously only teach the good side of the emotion method.)
Logic: This form of persuasion uses statements that appeal to logic, use cause-and-effect reasoning, and present good reasons to make changes. These statements usually focus on problem at hand and get right to the point.
Details: Here, we use statements that present information in a step-by-step, sequential manner. Some people will not take the first step until they see exactly how all future steps will be made.
At MIT, we are teaching our master's students to use VELD to be much more effective in rallying co-workers to their cause.
VELD in practice
To see how all four approaches (V, E, L, and D) can be used to promote the same outcome, let's consider one hypothetical scenario:
"Five years ago, your new employer merged with another large distributor of construction materials. Each company had eight to ten major warehouses across North America. Now, despite the merger, each warehouse still has its own logistics manager who arranges their own transportation including contracts, routing guides, and favorite carriers. The companywide result is 350 motor carriers costing US$800 million annually. As the new "whiz-kid" at headquarters you are told to go visit all these logistics managers and get them to establish centralized procurement of transportation."
Desired Solution: Persuade the logistics managers to establish centralized procurement of transportation. Appeal to all of them.
Here are examples of VELD statements that could be used to persuade the logistics managers to go along:
Vision: "We cannot excel with many little people making many little decisions. But if we all move forward together, seeing the whole picture, we can find global opportunities for both cost savings and service excellence."
Note how the statement describes a compelling future state and paradigm shift of all the logistics managers working together to make transportation decisions.
Emotion: "This is not about dropping your loyal suppliers. It's about rewarding the best of them with an even bigger share of the company's global business."
Note how the statement leverages the loyalty the logistics managers feel toward their favorite transportation suppliers and even describes how they can be rewarded for their fine work.
Logic: "If we centralize our purchasing power, then we can reduce our carrier base by 50 percent and save US$100 million at the same time."
Note how the statement is very matter of fact and uses the if-then structure to present the case for centralized procurement.
Details: "We can have each site rank their top 10 carriers and then map out their service areas and specialized services. We can then carefully design a request for proposal to solicit bids and create a unified national routing guide."
Note how the statement tries to lay out a list of steps to solve the problem. Detail statements are usually longer and more tactical than any of the other forms of VELD persuasion. Detail-oriented people often will not endorse a change until they can see and agree in advance with all the steps needed to achieve the goal.
Testing the theory
Our VELD theory is that some people are better persuaded by vision statements, others are best persuaded by emotion, others by logic, and still others by details.Â Different groups will have a different VELD profile, but to drive change in a big organization, you have to include all four approaches.
We tested our VELD theory by conducting two surveys to find out if people are very different from each other. The first survey presented seven decision scenarios from real life unrelated to supply chain management, each with four different persuasive statements (VELD) all advocating for the same decision. The scenarios included selecting a caterer, buying software, picking a nursing home, trading a baseball player, selecting a job, moving your office, and buying a new car. In January of 2017, we gave the survey to 63 supply chain masters students from over 20 countries while they were on campus at MIT. The students knew nothing about VELD methodology prior to taking the survey. The students were asked to rate the persuasive effectiveness of each statement on their decision by distributing 100 points across the statements. Given the fact that the survey takers were all supply chain graduate students, we expected the survey results to show that logic was the most effective method of persuasion. When we looked at the average across all the students, logic was seen as the most persuasive method and emotion was the least persuasive. But the distribution was actually more balanced than we expected. (See Figure 1.)
Furthermore, when we looked at specific individuals in the class, we saw dramatic differences. Figure 2 shows the distribution for four specific individuals who took the survey. These individual responses show the extreme case for each kind of argument. These survey results indicate that even among quantitatively trained supply chain masters students, there are some students who are overwhelmingly influenced by vision and emotion.
In January of 2018 we repeated the experiment with 194 supply chain master's students from 51 countries. To determine if business decisions are influenced differently than personal decisions, this time we presented eight supply chain-based decision scenarios including centralized purchasing, sales and operations planning (S&OP), planning software, stock-keeping unit (SKU) proliferation, customized materials, outsourcing, segmentation, and end-of-month demand surge. Again, the class average was fairly balanced; although this time, emotion was found to be significantly less persuasive than the other approaches (see Figure 3). However, once again when we looked at specific individuals in the class, we saw dramatic differences (see Figure 4).
The 2018 survey showed that among these quantitatively trained students, vision, logic, and detail statements were about equally persuasive. However, emotional statements were rarely (only 3 percent of the time) the most persuasive. (See Figure 5.)
The learning from the surveys are:
To help our quantitatively trained students make businesses cases that will appeal to everyone in their organization, we have consolidated what we have learned about the VELD method of communication into a workshop.
The workshop consists of two phases. In the first phase, we explain the VELD concepts to the students and have them practice creating and recognizing each kind of VELD statement. Students first write down VELD statements in response to given decision scenarios. They then read each other's statements and Â try to guess what type of persuasive method is being used. These steps are repeated with different scenarios until the students master the technique of creating and identifying the VELD basis of each statement.
In phase two, the students are divided into teams of four and asked to create a persuasive pitch for two different audiences with very different VELD profiles. In our case, the teams had to advocate for spending more money on the "Big Dig" project to replace Boston's Central Artery, an elevated six-lane highway that ran through downtown Boston, Massachusetts, with an underground expressway that runs through tunnels. One audience was the Massachusetts Department of Transportation (mainly highway engineers) and the other was the Boston City Council (local politicians and social activists). The presumed VELD profile of each group was presented as shown in Figure 6. The idea was for the students to tailor their presentations to the two different audiences. The students were provided with extensive information about the proposed project and given 90 minutes in breakout rooms to create their two five-minute presentations. Upon reassembling, each team made their pitches and were critiqued by their classmates.
Our hope is that this workshop will better prepare our students for the change management efforts that they will be asked to direct when they graduate. To "go make change happen" in a big company you have to persuade all kinds of people to change their behavior. Logic and facts persuade some people—notably engineers and scientists—but it is likely that this group is not even close to a majority. To move nonquantitative people, you need to build vision and emotion into your pitch. As educators and corporate training professionals, we need to teach our future leaders how to add vision and emotion to their repertoire to be more effective change agents. The VELD structure and workshop are useful teaching tools to accomplish this.