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Change Management Methodology for Omni-Channel Tranformations

Why is change so hard?

I’ve been fortunate in my career to have exposure to a number of transformative IT projects over the last decade for numerous apparel retailers, and I constantly run into this as an issue, regardless of the scope or scale of the project. The answer seems too simple to explain it, but we already know the answer: Change is hard.

To me, it’s not that the change wasn’t wanted. That’s seldom been the case. Rather, I think the change wasn’t planned for appropriately. I can recall a few failed projects, and the reasons vary, but center on a lack of planning and organization:

  • The stakeholder didn’t know the change was imminent
  • They knew of the change but didn’t understand the change
  • Change was understood as to why (the project was being done), but a plan wasn’t in place to transition from old to new
  • A plan was in place, but executed poorly, due to lack of planning

With the exception of a few customers, my experience has been that projects (as of late “Omni-Channel projects”)  seem to success or ‘fail’ because of a lack of planning.

TAKING A FIRST STEP

We’ve all been guilty at one point or another of just ‘winging it’ and hoping the chips fall in the right place. With the scope and scale of many Omni-Channel projects and the need to compete by providing capabilities to fulfill customer’s Orders, this is sometimes the easy way out for retailers both large and small. The standard story goes like this; An executive is sold on a software suite by a technology vendor or a leading analyst firm, and off to the races they go, scheduling milestone dates that are not realistic, with staffing models that are as equally unrealistic. The IT teams and business managers go with the direction of the higher-ups and execute to the best of their ability, alongside their current workload.

With the scope and scale of many Omni-Channel projects and the need to compete by providing capabilities to fulfill customer’s Orders, this is sometimes the path of least resistance for retailers both large and small, or it appears so prior to getting in the weeds of it all.

The standard story goes like this; An executive is sold on a software suite by a technology vendor or a leading analyst firm, and off to the races they go, scheduling milestone dates that are not realistic, with staffing models that are as equally unrealistic. The IT teams and business managers go with the direction of the higher-ups and execute to the best of their ability, alongside their current workload.

One area for improvement is the planning of the project prior to commencing the project, and it starts with understanding four main things called “P3Os”, which is a common model in the industry for effective change management within organizations:

  • PURPOSE
  • OBJECTIVES
  • OUTPUT
  • OUTCOME

For each of the four above, there is an intersection of People, Process and Technology. Follow the below for some examples of effective planning questions.

PURPOSE

Simply put, this is the “why” in the change management equation, and it’s the most important, as the other three “O’s” rely on this as the foundation.

Competition for capabilities offering, such as Buy On-Line, Pickup In-Store seems to be driving the bulk of client-facing projects I’ve seen, followed by other initiatives like “Endless Aisle”, which displays  store inventory to users on websites and mobile devices. Internal initiatives such as ship-from-store projects, which look to fulfill to an end-consumer from a store in closer proximity, are also driving a bulk of short-term Omni-projects where current assets and current resources are utilized.

The “Why” here across these Omni-Channel projects is to:

  • Increase Sales
  • Reduce Transportation Cost (fulfilling closer to consumer)
  • Leverage underutilized inventory that will be marked down / transferred back to the DC if unsold
  • Reduce overall inventory carrying cost, but lowering the amount of network safety stock needed
  • Streamlining processes at the Distribution Center by keeping a single view of inventory across all channels within the same facility

Proper project planning starts at the top of any retailer organization and is followed by the Directors and Managers tasked with implementing the projects. It’s imperative that the consumer drive planning of capabilities the retailer is providing. The sequence of the initiatives is important, and should be based on the profile of the end-consumer.

Under Armour, for example, has more than a dozen stores right now, but is not at the size say Bed Bath & Beyond is, which has over 900 stores in their network. It’s more likely Bed Bath starts with a project to show store inventory online to drive foot-traffic, while Under Armour, which recently acquired MyFitnessPal and MapMyRun, focus their efforts on providing a consistent experience across their apps, website, and stores. Both are doing projects which cross over channels, but they go about it in a different way because their client profiles differ. Sequencing here is the key and the roadmap planning is important, but independent of which capability to offer first, the approach explained below applies.

What I typically do at the onset of the initiatives is to refocus the group on the purpose of the project, by conducting a one to two-hour session brainstorming with the team on the reasons for the project, expected results and potential concern areas, which later becomes the project charter and a risk list. It’s important during this session that the leadership (reword-backing) the project open up with statements to their vision, but that the core team does the majority of the contribution to the discussion, as they are the ones tasked with owning the results day-to-day. Stakeholders from all aspects of the business and IT should be in attendance, but also to make sure that there’s not too many people in the room.

OBJECTIVES

With a clear purpose, the next step in the planning process is to understand what is to be accomplish through the Omni-Channel project. Two critical questions need to be answered in this phase:

  • What has been done so far to provide the capability to the consumer?
  • What needs to change to be able to provide an enhanced experience to the consumer?

The prior question creates the baseline for proceeding and the latter provides a list of actionable task to proceed.

OUTPUT

Next, retailers should focus on the emotional side of the changes within the organization. This step, above all other ones, is where the failure is most likely to occur.

Simply put, without an emotional reason for the change, the team implementing the Omni-Channel project will not feel a connection to the end-result.

When laying out plans for Omni-Channel initiatives, consider how the change will affect your organization and compare that against your culture’s willingness to change.

It’s been my experience that the more mature the organization, the harder it was to change. The suggestion here is to make sure to establish clear expectations with the teams as to deliverables, based on what steps you’ve identified in the objectives step above. Focus on the teams’ journies along the way, and be sure to keep a close eye on the mix of personalities for each block of task / phase of the actual projects.

OUTCOME

Finally, the focus expands past immediate goals, to the broader outcome of the projects. When planning the project, this is the mid and long term goals of the organization. This step adhere’s most to the long term mission-statement of the organization as a whole, independent of the “mini-projects” that make up the broader Omni-Channel tranformation for an organization (See Above: Sequencing capabilities). Enhanced customer experiece, to me, is an outcome more than a OUTPUT, and is enabled through a series of decisions and projects, and not a quick-win result.

TYING IT ALL TOGETHER

With the combination the P + 3 O’s, retailers can begin to map out the series of projects and manage the change factors involved with shifting the organization from silo’d channel-based groups, to a collective unit all working towards a common goal: To align People, Process and technology to benefit the customer by functioning off a single view of both the Customer and the Inventory within the network to provide a seamless experience.

 

The case for a more integrated Omni-channel System Landscape