White Paper

Managing change and preparing the organization for an ERP solution.

Highlights

While most food business leaders understand that implementing new integrated business software is a significant technical challenge, many overlook the less tangible things that can stand in the way of success, like emotional resistance or cultural barriers to change.

This guide covers:


Introduction

Through our years of implementing integrated business software for the food industry, we’ve noticed that many of the pain points management experiences when their organizations outgrow Quickbooks or Freshbooks are nearly universal. See if any of them feel familiar to you:


Those are just a few of the reasons business leaders will seek out new business software. Others include too-frequent transcription errors because of an overreliance on manual data entry, or poor employee morale because their work is too burdensome and tedious.

Integrated business software (often called ERP, for Enterprise Resource Planning) is the most effective way of addressing these pain points, but implementing such a system can be a major pain in itself. As valuable as quality ERP software is, implementing it isn’t easy. Adopting new integrated business software represents a major organizational change, and is therefore fraught with the same potential pitfalls of any major change initiative.

Avoiding those pitfalls takes more than luck; deep familiarity with organizational behavior and a systematic approach to navigating the human element help immeasurably. The seminal work on these topics is Leading Change, written in 1996 by Harvard University professor John Kotter. In the twenty years since, his eight-step process has proven itself effective and reliable at facilitating successful organizational change. Here’s how we apply Kotter’s eight steps to a JustFood implementation.

Step 1: Create a sense of urgency

Kotter emphasizes the importance of widespread “buy-in,” and so do we. To ensure a successful ERP implementation, you have to make sure people are committed to change, and the most effective way of doing this is to help them see that the status quo needs immediate attention. It isn’t enough to get people believing that it’s unsustainable; they have to believe, as Kotter puts it, that they are standing on a burning platform, and that inaction or procrastination aren’t options. Something has to be done now.

Fortunately, this often isn’t hard when a company really does need new business software. Usually, the pain of outdated technology is felt broadly enough that most employees will be eager to support the change. The remainder need to be made aware of the consequences of inaction so that they buy in to the need for immediate (not eventual) change.

To do this, we’re careful not to focus too much on either rank and file employees or on management; both need to be committed. But we do look out for influential individuals who may not be on board. In this case, influential doesn’t necessarily mean senior. For example, a veteran office manager may be relatively low on the org chart, but can have an enormous influence on the outcome of a transformative project like this. Explore reticence where it exists and confront it. One influential detractor can make efficient progress very difficult.

Step 2: Build a guiding coalition

These will be the champions who lead the implementation in your organization and who inspire the rest to embrace the change. Think about who would be your perfect core team. This is not always easy if you have a small staff. In that case think about personal skills in the team and how they will benefit the project and the upcoming changes.

Strong leadership skill on the team is essential, but it isn’t the only thing that’s needed. Strong representatives from the middle and bottom of the org chart are just as important. Try to include ambassadors for the project and the new system from across the organization and allow them to train other employees and be visible as go-to people during and after implementation. Talent and suitability for the role on the guiding team is more important than seniority or authority; you want a representative cross-section of the organization.

Paradoxically, it can help to put one or two of the project’s strongest critics on this team. That way, they take responsibility for making things work in spite of their doubts, and their visibility on the guiding team makes it harder for them to undermine the project, intentionally or unintentionally.

Step 3: Create a vision

A vision is a concise description of the desired end-state. What will things look like after a successful implementation? The answer is your vision. Don’t confuse a vision with a mission statement, values statement or motto — good things to have, but not directly helpful here.

Here are some good examples from past implementation visions:

The vision has to have the buy-in of the whole guiding coalition and executive management. It’s one of the most important steps in a project, analogous to choosing a destination for a long and challenging voyage. While other parts of the process are generally tolerant of mistakes, getting the vision right and winning broad buy-in is an absolute requirement for success, so it’s an area where we offer a lot of facilitation and guidance to our customers.

Step 4: Communicate the vision

With the vision established and the core team on board, the key people know what will happen and why, but other staff might not be aware, and it’s human nature to fear and resist what we don’t understand. That’s why it’s critical at this stage to communicate the vision across the whole organization.

During a JustFood implementation, we set up a couple of processes to make this easier:

Step 5: Empower people to act on the vision by removing obstacles to progress

Once you’ve developed a healthy amount of enthusiasm across the organization for the upcoming changes, it’s important to create opportunities for a broad cross-section of employees to take part. Organizational behavior research tells us that people are much more likely to embrace a change that they had a role in creating, so giving people an opportunity to participate isn’t just democratic; it’s an important component of buy-in and, therefore, success.

Making this happen isn’t so much a matter of adding things, but rather taking away — taking away the physical, organizational and human obstacles to broad participation and feelings of ownership in the process and its outcome. Now that you’ve convinced everyone that their platform is on fire, it won’t do to blame old habits and processes for a lack of forward motion. Give people the leeway they need to solve problems on the fly.

Some examples:

During a JustFood implementation we frequently use process flow diagrams to help us here. They’re a powerful tool help everyone understand how and why things work the way they do, and where there are opportunities to remove obstacles to progress. Our experts will share food industry best practices with you, enabling you to create and optimize your business flows before and during the implementation.

Step 6: Create quick wins

During a lengthy and challenging change initiative, it can be difficult to maintain enthusiasm and momentum, yet doing so is critical. You make that happen by demonstrating quick wins. One key to achieving that is to break the project up into clear phases, celebrating the completion of each phase as a win.

For example, when we implement JustFood we start with the most straightforward business processes and implementation steps first. Revision and implementation of those can be begun and completed relatively quickly. With tangible wins following shortly after implementation begins, enthusiasm for the project snowballs.

This step includes celebrating successes. Make sure people understand what they’ve achieved once they have completed the first project milestones. It motivates them to persevere through the next stages.

Communicating these successes should be both formal and informal. Pats on the back and casual encouragement are useful, but so too are company-wide emails that spell out exactly what was achieved and who deserves credit.

Step 7: Consolidate the wins and build on the gains

A concise description for this step would simply be, “don’t let off the gas.”

It’s easy to lose momentum halfway through a long project. This is where strong leadership comes in. Now that some substantial changes have already been implemented, there should be new opportunities for quick wins that didn’t exist before. Act on them aggressively. Engage the whole organization in determining what those might be; the best ideas often come from the front lines. Identify teacher-leaders who can take on more responsibility and sustain the momentum. Don’t let people slide into complacency or “business as usual” until success is assured.

By this stage, people expect that much will have been achieved. Don’t just meet those expectations; communicate that they’ve been met by sharing compelling evidence of the improvements.

Irrational and political resistance to change never fully dissipates. Even if you’re successful in the early stages of a transformation, you often don’t win over the self-centered manager who is appalled when a reorganization encroaches on his turf, or the narrowly focused engineer who can’t fathom why you want to spend so much time worrying about customers, or the stone-hearted finance executive who thinks empowering employees is ridiculous.

John Kotter

Step 8: Embed the changes in the company culture

People may comply with directives for a short while simply because they’re directives, but in the long run behavior is dictated by the culture — the way things are done around here (in practice, not theory). With that in mind, you have two goals with this step. First, you want to make it easy to do things the new way. Second, you want to make it impossible for people to revert to the old way.

Here are some examples of things we often recommend to our customers to embed the changes in the corporate culture:

In our experience, a recent merger or acquisition is frequently the impetus for seeking new business software. In those situations, the merging of two distinct cultures adds to the potential perils, making this final step all the more important.

Conclusion

Every ERP implementation is a major undertaking. Even when successful, there will be stumbling blocks and casualties along the way. Fortunately, the pitfalls are well understood. By applying a proven, systematic method to mitigating the risks, aided by experts in food industry ERP implementation, you can put the odds decisively in your favor.

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