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Commentary: Leading supply chain change by "logrolling"
Author's note: This is the third in a four-part series of online 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. The second, "Putting vision and emotion into supply chain leadership" talked about the four main types of persuasion: vision, emotion, logic, and details.
Your new job: Go make change happen.
Hiring managers have big plans for you, their newly hired supply chain master's or MBA graduate from a top university. They are paying you a lot of money, and you report directly to a senior manager or vice president. Whether it's a large multinational or a small firm with just 200 people, your new boss expects great things from you. And there are problems to be solved. Things aren't right. Engineering, sales, and manufacturing are all behaving in ways that hurt the supply chain and degrade the end-to-end performance of the company. Even within your own function, supply chain groups in remote regions have thrown out the best practice playbook and are "winging it." But now you are here to save the day. Your boss tells you to, "Go out there and make positive changes right now. Go!" For example:
- Go visit sales and get them to smooth out the crush of orders at the end of the month.
- Go visit all the small, country-level distribution centers (DCs) in Europe and get them to consolidate into a single efficient pan-European operation.
- Go visit research and development (R&D) and convince them to restrict their use of unique, customized parts and materials in new product designs.
- Go visit the Asia Pacific Regional headquarters and get them to start up a sales and operations planning (S&OP) process.
You just started work last week. At this point you have no staff, no budget, no authority, and you don't know any of these people that you are supposed to go "straighten out." You can imagine how much these "target" groups want to have a new youngster show up from headquarters to tell them what to do. So, what are you going to do?
The setting: on-site to make a change
You're now on the ground at the target group; this might be the Asia Pacific headquarters, or a DC in Europe, or across the street in the sales department. It is a very large organization. Every function, product, and country manager is being measured on its own performance, and they all want to improve something. Senior managers are being pulled and pushed in many directions by different change initiatives. Most change leaders have become "one issue evangelists," standing on a soapbox and preaching their benefits to all who will listen. Win the hearts and minds! Convince the unwashed masses! You've heard the cries for Lean; total quality management; Six Sigma; just-in-time; single minute exchange of dies; collaborative planning, forecasting, and replenishment; perfect order; supply chain operations reference model (SCOR); and so forth.
What are you going to do? Find your own soapbox? Unless you are very skilled, becoming a loud advocate for one issue may get you labeled as a "one issue person," which may compromise your leadership opportunities in the future.
Let's look more closely at one situation, say, the Asia Pacific Regional headquarters (APRH). Your boss back at worldwide headquarters wants you to get APRH to institute an S&OP process. An S&OP process needs many functions to really buy into it. You avoid the soapbox approach and quietly start trying to figure out the lay of the land. What's going on here? You meet privately with the head of each major function to understand their perspective on things. Here is what you find: Several competing change programs are being espoused, and the company does not have the bandwidth to do all of them at once. Each functional leader has their own take on this:
Supply chain: The AP regional director of supply chain is in favor of starting an S&OP process but does not know how to make it happen. He has been pestered daily by one set of colleagues who wants to buy new enterprise resource planning (ERP) software and another group that wants to change the bonus system to tie to overall company performance. But he is not very interested in those issues, only starting up S&OP.
Finance: The AP chief financial officer does not have much interest in the S&OP process. She does not think it will affect her process. But she very much wants to buy new ERP software. She also thinks that changing the bonus system to tie to company financials is a bad idea (because it will mean more work for her staff).
Manufacturing: The AP director of manufacturing thinks an S&OP process will force his people to build against a changing forecast and hurt his ability to maximize machine utilization. He has heard all the arguments for new ERP software but does not care one way or the other. He thinks the new bonus system will finally reward the hard-working people in the plants, instead of having the sales team get undue credit.
Sales: The AP regional head of sales does not care either way about the S&OP process. She sees both advantages and disadvantages. She thinks a new ERP system will just mean much more paperwork to be filled out by the sales associates. And she likes the bonus system (that favors the salesforce) just the way it is currently. She does not want to see it changed.
Marketing: The AP vice president of marketing does not really know what an S&OP process is except that it will consume bandwidth that is better used on implementing new ERP software. The new software has product lifetime simulation capabilities that he really likes. And he also wants the bonus system changed to reward sales less and marketing more.
So, what did you find? Only one key manager (supply chain) favors starting the S&OP process, and two (manufacturing and marketing) are actually against it. Is it time for the soapbox?
Let's make a deal (quietly)
This scenario of multiple decision makers faced with multiple issues is quite common. Every legislature deals with this every day. Legend has it that U.S. Congressman Davy Crockett in 1835 was the first to call the act of trading votes behind the scenes, "logrolling." In this article, we show how a facilitator can skillfully use logrolling to achieve a deal and make change happen. Instead of becoming an evangelist to convince manufacturing and marketing to join the cause of S&OP, let's take a closer look at want we learned from the interviews. The result of the interviews can be shown as a chart.
The basis for logrolling here is to act as the matchmaker. Find decision makers who are neutral on each other's main issue and have them agree to support each other's issue. You are now trying to do this to get issue 1 (S&OP process) adopted. Focus on the people who are neutral on your issue, not on the people who are already against it. In the chart below, person 2 is "neutral" on issue 1 and "for" issue 2. Note that person 1 is the mirror image: "for" issue 1 and "neutral" on issue 2. You have an opportunity to have persons 1 and 2 agree to support each other's issue.
Before we go on, it is important to stress how delicate this negotiation should be. You need to approach both decision makers 1 and 2 with honesty, sincerity, and empathy. You are introducing two partners who must learn to trust each other. Each has to believe in the other person so that the negotiation does not seem flippant or mechanical. Your reputation as an honest broker is very important.
So far you now have two votes "for" S&OP and two votes "against" S&OP. Let's do the same thing again. In the chart shown below, person 4 is "neutral" on issue 1 and "against" issue 3. Note that person 1 is the mirror image: "for" issue 1 and "neutral" on issue 3. You have an opportunity to have persons 1 and 4 agree to support each other's issue.
If you are successful in getting persons 1, 2, and 4 to agree to trade votes, then you will see the result shown below.
You now have three votes in favor of S&OP and only two against. And you did not have to become an evangelist to do it. By the way, your actions helped resolve the other two issues, one adopted and the other rejected. Your job was to start the S&OP process, so you have succeeded. And you preserved your reputation as an honest, even-keeled deal maker. A change agent.
Just a word of caution here. It is possible that another smart person is employed in the company who is working against your issue. Figure 5 shows an example of how the same set of circumstances could have been swung to the opposite outcome for your S&OP issue.
Notice the importance of person number 2. He or she is the swing vote, so it is smart to discover this possibility and secure his or her vote early in the process.
Teaching logrolling is fun for both the students and the teacher. Initially, tell the students nothing about logrolling. Divide the students into groups of about six to eight people. Each student is given a card telling who they are role playing and what their position is on each of about three to four issues. The roles will be positions such as the head of sales, marketing, manufacturing, engineering, purchasing, and finance. For each issue, they will also be provided a sentence explaining why they are for, or against, or neutral on that issue. The roles and positions are crafted such that no issue has a majority of support for or against. The players are told each other's role but not their position on any issue. The group members are then given 15 minutes to decide what to do about these issues: adopt, reject, or reach a stalemate.
During those 15 minutes, you will see almost all students become evangelists for their favorite issue, for or against. Raised voices, impassioned arguments, arms flailing, and wild gesturing are the norm. The groups are then brought back together to report their outcomes and the methods employed. Loud shouting accompanied by little progress are typical. They are now primed to learn about logrolling.
At this time, the teacher shows some examples (as is done above in this article) of how logrolling can be used to quietly gather enough votes to adopt or reject various issues. Now the student groups are told to go back and try again to make progress, but this time students are given a small chart such as those above showing the position of each person on each issue. This time the students focus on forming alliances based on trading votes. Within a few minutes they have reached some decisions about the issues.
This method is particularly effecitve for newly minted master's graduates as they are unlikely to have the leadership resources that they will have later in their career (budget, staff, authority). Yet they are expected to "go make change happen." Logrolling is a valuable technique that they can use on day one. No big speeches, no flamboyance, and no grandstanding are required. Just listening, taking notes, and a bit of matchmaking. The role-playing workshop that begins with a visceral shouting match and ends with a simple, quiet decision-making process drives home the value of logrolling as a leadership technique.
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