Planning for change
It’s been a particularly hectic time running up to the holiday period, and this will be my last blog until somewhere around January 8th. We all want to be busy, so I’m not complaining, but we also want to make sure that our efforts are productive – that we’re not being busy fools. That neatly connects to a couple things that have occupied a lot of my time recently, and I am sure will reflect the demands on the time of many people in the industry next year and beyond.
The first has been finalising the research and preparing the materials for a webinar we had yesterday for our Research Programme members on managing complex change, such as we face in restructuring dealer networks, modifying franchise systems or introducing agency. The second combines all three of these into one, where ICDP has been engaged by Stellantis UK to act as the honest broker between the manufacturer and dealers in replanning how the business will introduce their New Retailer Model (NRM), and replanning some of the elements within that. This is not breaching any confidentiality – Maria Grazia Davino, the recently appointed Managing Director of Stellantis UK has been talking to the press about it.
Without claiming any credit for her open admission of some of the problems that the business needs to address, and the impossibility of proceeding with the original NRM plan, it neatly brings me back to some of the points we made in the change management research. The area is surprisingly poorly covered by good quality investigation and analysis. There are many references to ‘70% failure rates’, but rarely any definition of what ‘failure’ means in that context, and no justification for the 70% figure other than statements like ‘widely accepted’. The reality is that most change programmes in the distribution sector do deliver at least some of the originally planned benefits, but rarely 100%, and often take longer and cost more than was originally budgeted. Along the way, there are casualties who might be forgotten in the long run because they are staff who left the employment of manufacturers and dealers, and dealers who were terminated, possibly leaving the industry, possibly starting afresh with another brand. If we are going to embark on widespread change to a distribution model that has been around for a century, we should be aiming to do better.
In this blog, I’m going to pick on three areas from the research where we felt there needs to be much more focus. The first – as demonstrated by Maria Grazia – is a recognition of the readiness of the organization to change, meaning the manufacturer and their dealer network. You would not (I hope) drop a 500 horsepower engine into a car that has tyres worn down to the carcass, but as one of my motorsport friends once reminded me, the only thing that connects all the smart stuff you’ve engineered and your ace driver to the road is the tyres. If they’re no good, you have no traction, no ability to accelerate, no ability to change direction, no ability to slow down. Instead, you will come off at the first bend. If the extended organisation does not have the capacity to change, then there is no point in kicking off something new until you have established a stable platform. Assessment of change readiness and preparation for change is as important as process and IT design and development.
The second key point is about inclusivity – getting people on board, and keeping them there for as long as it takes to get the change embedded as the new way of doing business. You will not achieve this by having the change ‘done to you’ by a team of external consultants, however bright and well-qualified they may be. They will never know the business as well as the people in your own organisations, and they will not have to live with the consequences of the design decisions they make. You therefore need to find a way to get the best and brightest people in your organisation released from their day jobs so that they can make the time available to think about the shape of the new world. That brings us back to the point about having a stable platform as they cannot be fire-fighting to keep today’s business going or coaching a replacement to do that, at the same time as they should be focused on how the business should be moving forward. Related to that, addressing the concerns of individuals is not something that you should just defer, or hope to steamroller into submission later in the process. There are always some who will never change, under any circumstances, and at some point you will need to part company, but others should be brought in early, and made part of the solution. If a recognised sceptic becomes convinced, that will influence ten or twenty others to follow.
The final point for today is about leadership. A change that is fundamental to the future of the business deserves the time of the CEO and the other top managers, and they need to ‘walk the talk’ from the beginning. They cannot delegate to middle management or external consulting teams and just check in once a quarter. Staff throughout the change team and the broader organisation will recognise that what they are doing is important if it is attracting the time of the CEO, and if they can see that the CEO is behaving in a way that reflects the desired direction of travel.
We have referred recently to the need to come up with Agency v2.0 as none of the implementations to date have been without fault, and some have been so difficult that without change they are unsustainable. Regardless of whether you are involved in agency or even in new car sales in general, the industry faces unprecedented challenges, and step one of the change process is to check those tyres and make sure that you have the ability across the extended enterprise to get traction and start to steer the new course.
With that, I wish you all the best for the holiday season, and look forward to catching up in 2024!