Trust the supply chain system?

Why do implementations of advanced supply chain solutions fail so often? Not long ago, I had an insightful conversation with the Chief Supply Chain Officer (CSCO) of a major FMCG company. They had recently struggled with a failed implementation of one of the leading advanced planning systems. As the CSCO told the story, it became clear that the root cause wasn’t the system itself but rather the company’s lack of readiness to embrace the change wholeheartedly.

A few days later, I stumbled upon a thought-provoking video by author Simon Sinek, where he shared the U.S. Navy SEALs’ perspective on trust versus performance. Sinek presented a four-quadrant model with trust on the x-axis and performance on the y-axis. He explained that for the SEALs, trust represents the “soft skills” or the performance off the battlefield, while performance signifies the “technical skills” or the performance on the battlefield. According to the SEALs, no one wants a low-trust, low-performance individual on their team. Conversely, a high-trust, high-performance teammate is the ideal. Interestingly, they prefer a moderate performer with high trust over a high performer with low trust, whom they consider a “toxic” team member or leader.

Sinek’s message resonated deeply with me, and I couldn’t help but draw parallels to the world of supply chain system implementations. In our pursuit of operational excellence, we often fixate on performance metrics – system speeds, optimization algorithms, functional completeness, and technological compatibility. However, we frequently overlook the equally crucial aspect of trust.

Success in supply chain transformations depends not only on the system’s technical capabilities but also on the organization’s readiness to embrace change. Do employees understand the rationale behind the new system? Do they feel confident in using it? Have they received adequate training? Do they trust the system’s recommendations and outputs? Have we addressed the necessary process changes and organizational implications?

The importance of trust in driving successful transformations is underscored by insights from many research studies. One study shows that a staggering 70% of transformation projects fail, often due to insufficient stakeholder buy-in and lack of alignment with business priorities. Further research emphasizes that effective transformations demand cross-functional coordination and a holistic approach, seamlessly integrating business and IT benefits. Additionally, findings highlight that comprehensive change management and collaboration across all key stakeholders are critical success factors. These insights reinforce the notion that achieving a 100% perfect system is less vital than fostering trust and readiness within the organization.

All too often, organizations chase this elusive “100% perfect system”, throwing immense resources at achieving that final 20-30% of functional perfection. Instead, they could better invest that effort, time, and money into fostering trust within the organization – ensuring comprehensive change management, effective communication, and ongoing skill development.

Trust is the lubricant that facilitates seamless collaboration, effective decision-making, and successful adoption of new systems and processes. Without trust, even the most advanced and feature-rich supply chain solution may fail to deliver its promised value. In the context of supply chain system implementations, this means acknowledging and celebrating teams that not only deliver exceptional technical results but also foster an environment of trust, collaboration, and shared understanding. Performance is crucial, but trust is the unsung hero that ensures lasting success.

Sikko Zoer, Co-founder Supply Chain Companions