Game on: Rethinking change management for the digital era

In today’s fast-paced and unpredictable supply chain environment, supply chain leaders face greater challenges than ever. Supply chains are undergoing a digital transformation, yet they must continue to operate during these changes. Customers and regulators have higher demands, seeking greater visibility into how a supply chain operates, including environmental and labor practices. Customers are increasingly demanding full transparency and visibility as part of their brand loyalty and satisfaction.

Supply chain resiliency. Multi-cultural and multi-generational project teams. Project teams that include your employees and those of your suppliers.

Supply chain leaders need to create high-performing and horizontally integrated teams to succeed in today’s environment. Multi-player video games show us a path to the future of change management, providing lessons for navigating the digital era.

Why companies need to change how they change

Internal and external forces make change management more challenging and critical for companies.

Internal forces.

• Companies are implementing new technologies and new data sources as they race to become more data driven.
• The pandemic accelerated the shift toward hybrid workplaces, with virtual project teams becoming more common.
• Cross-generational dynamics are at play, with a new generation entering the workforce and, in many industries, young leaders managing older subject matter experts.
• At leading companies, supply chain functions are flipping from back-office roles to customer-facing ones, necessitating new internal collaborations.

External forces.

• Geo-political situations are driving de-globalization and protectionism
• Concerns about climate change and environment, social and governance (ESG) are prompting the need for new external collaborations.
• Companies are creating “Constellations of Value,” involving selected networks of suppliers, manufacturers, logistic companies, and service providers chosen to improve visibility, resiliency and security while meeting the demands of customers.
• Supply chain leaders must involve all stakeholders in the value chain to the benefit of both the business and customers.

Together, these internal and external factors demand effective change management. Unfortunately, most change initiatives fail, with widely cited statistics indicating a failure rate of 70% or higher.

Why multi-player video games

Two and one-half years ago, the Digital Supply Chain Institute (DSCI) embarked on reimaging change management for the digital era, drawing inspiration from world-class teams playing online video games. The collaborative dynamics and rapid problem-solving to achieve a well-defined goal were eye-opening, sparking the question: Could video games offer more than just entertainment, unlocking new paradigms in change management, particularly with the influx of individuals into the workforce who grew up with video games and smartphones?

Multi-player video games share many common realities with the digital transformation of supply chains, requiring adaptability, continual learning, and rapid identification and utilization of collective strengths. Success in both realms hinges on clear goals, adaptability, collaboration, and effective communication.

The four lessons

High-performing video game teams share four essential elements that are applicable to creating high-performing project teams in the digital era that span different ages, cultures, and geographies.

1. Rapid communication: Just as gamers must communicate quickly and accurately, businesses require timely and relevant exchanges. Effective communication in the workplace transcends the speed of response; it’s about completeness and relevance. An incomplete answer to an urgent query can impede progress as much as a delayed one. Team members need to be aligned about using the right communication channel for each type of communication.
2. Trust building: Rapid trust building within the team is critical. Each member must assess their own strengths and weaknesses honestly. In video games, the team needs to quickly determine who is the best builder, navigator, or shooter. Trust in the team members, much like in gaming, is also bolstered by the immediacy and reliability of communication. Trust leads to the team merging their skills to overcome challenges.
3. Trusting and filtering data: In gaming, players swiftly filter mounds of data to make informed decisions by knowing what data to look at in each situation. Similarly, in business, employees are inundated with data and the ability to filter data is critical for effective decision-making. This requires an innate trust in the accuracy of the data.

Related Podcast

 

Talking Supply Chain: Fortnite’s Keys to Change Management

Change management is one of the most difficult things for companies to execute. Plenty of good ideas and technology deployments have failed simply because management has been unable to implement strategies to take advantage of opportunities. Another factor is the changing dynamics of the workforce. With more younger people moving into key roles, the ability to connect with these workers is a critical factor in successful change management. Craig Moss, executive vice president of Ethisphere and director of the Digital Supply Chain Institute (DSCI), joins the Talking Supply Chain podcast to discuss the role the video game Fortnite is playing in change management strategies. 

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4. Dynamic leadership: Dynamic leadership emerges when the first three lessons are applied, rejecting rigid hierarchies in favor of situational leadership, where the best person for a task leads the team in that moment. This fluid leadership structure allows the team to choose the best path to the goal given the situation.

A supply chain case study

The four lessons can be applied to a common supply chain challenge, such as reducing the lead-time from forecast to customer delivery from 135 days to 100 days. There are several steps in the process that involve different internal functions and multiple external companies. Here’s a situation that is all too common.

Step 1, forecast and planning: Original forecast data from marketing was late in arriving and incomplete. The forecast was increased after material and production orders were issued.

Step 2, material suppliers: Due to poor forecasting the material lead time was 25 days versus the plan of 10 days.

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Step 3, factory production: Production schedule was impacted by material delays and capacity limitations. Pressure was put on the factory to work overtime to reduce overall lead time, but the factory could not meet the desired ship dates even with the overtime. The factory was also cited for excessive overtime by a labor auditor. Due to the materials delays and capacity issue the lead time was 45 days instead of the plan of 30 days.

Step 4, transit: Delay in production required re-booking shipments which led to delays at port of exit and port of entry. Late arrival in U.S. led to further delays in rail transit.

Step 5, distribution center: Attempt to compensate for previous delays required overtime leading to higher costs. Even with overtime lead time was 15 days instead of 5.

Step 6, shipment to customers: Customers received orders in 135 days, not the promised 100 days.

To solve this common supply chain problem, the four lessons can be applied to create a high-performing team. Senior leadership needs to create one cross-functional and horizontally integrated team with internal and external players and give them a clear goal and shared incentives. Rapid communication between all parties aligns the team around the goal and establishes visibility into each player’s role. Trust is built between the players as they communicate and become one team, rather than individuals blaming their problems on the other participants in the cycle from forecasting to delivery. Visibility into the data at each stage allows each player to anticipate possible delays earlier and adjust. With a clear goal, the team can focus on the critical data and trust its accuracy. Finally, dynamic leadership is a natural result as each team member leads in their area of expertise.

Digital transformation requires organizational and operational changes. Supply chain leaders must prepare for a future that is even more digital. Multi-player video games provide valuable insights and lessons for creating high performing teams to navigate this future.

About the authors:

Marko Kovacevic is managing director of the Digital Supply Chain Institute (DSCI). Craig Moss is director of data and change management at DSCI.

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