Change Management: A Core Component of Category Management

Driving change is one of the foundations of category management. For the implementation to be successful, we need to understand and make provision for how people react to, and deal with, change.

To do that, let’s turn to the work of Elisabeth Kübler-Ross, a Swiss-born psychologist who graduated from the University of Zurich Medical School in 1957. In 1969 she published her research and identified the five stages of grief:

These stages can apply to any loss or threat of loss, even in business. Within organizations, change can represent potential or actual loss, ranging from the loss of a seat by the window right up to an actual job loss. Even if the loss is not yet realized and is only a threat, a degree of grieving can be expected.

Kübler-Ross’ five stages of grief are, therefore, entirely appropriate in helping us to understand the human side of change within organizations. The stages reflect swings in individual’s wellbeing and, in the case of an organization, its motivation. The change cycle shown in the graph below is adapted from Kübler-Ross’s work to give an interpretation more suited to organizational change.

Here, the stages have been adapted as follows:

1. Immobilization

The event that changes everything, this is the shock we receive or the news that we are facing a loss. It might be an announcement that the company is to be restructured leaving people facing redundancy, or perhaps, an area of the business is going to be outsourced or relocated to another site.

2. Denial

A natural human defence mechanism, this is a conscious or unconscious refusal to accept the facts or the reality of a situation. Designed to protect us from the shock of a traumatic event, denial can last minutes, hours or even days.

3. Anger

After denial, feelings of frustration turn into anger which can be directed at many different things, from the cause of the immobilizing event to yourself to colleagues. It may even be manifested by out-of-character emotional outbursts.

4. Bargaining

When the reality of the change hits, people will try to exert any power they might have to secure a more favourable outcome. This might be requests such as, ‘If I go along with the move to the new office, can I sit by a window?’ or, ‘If you need to make redundancies, can I get a good package to go?’ Bargaining rarely provides a sustainable solution, and it gives way to a growing feeling that the change is inevitable.

5. Depression

In an organizational context, this stage is often referred to as a dress rehearsal for what comes next. It is natural for there to be a confusing mix of emotions including sadness, regret, fear and uncertainty. Depression is a sort of acceptance of the change but with an emotional attachment.

6. Experimentation

This additional stage is when individuals tend to experiment with ways to come to terms with the change. An example might be, ‘If I have to move to work in another part of the building and lose my seat by the window, at least I’ll be nearer to the canteen’. Experimentation is the beginning of acceptance.

7. Acceptance

Here, the individual has finally accepted the change and has managed to achieve a degree of objectivity without emotional attachment to the new position.

8. Completion

When people reach this state, they will be talking of the ‘new place’ being much better than the ‘old place’ and they will be stronger and more motivated as a result of the pain and experience of going through the change.

Knowing what people are going through when they are involved in organizational change helps us to make robust provision for change management. Spotting which stage people are on the curve is usually obvious; providing the right response takes rather more thought.

With any organizational change, there will be pain, even in the most resilient of organizations where change is the norm. However good change management is in practice, it is also about a series of proactive measures aimed at smoothing out and accelerating the change as well as the duration. Good change management is about preventing the pain as much as possible, which in turn will enable wider change and organizational objectives to be achieved faster and with less resistance.

There are four crucial elements that need to be in place to support the management of change. These are:

Strong executive support

Executive support and backing must be an integral part of all change communications and this should be secured from peers and colleagues across the wider organization, no matter the level. This is where the sponsor’s role comes into its own, and the sponsor needs to either provide this support directly or secure it from peers.

Involvement and participation

With good communication and stakeholder engagement, it is possible to involve a representative cross-section of the organisation while making others feel involved or at least consulted.

Providing the necessary resources

Implementation without resource is difficult and sets the change project up to fail. During the planning process, the category team needs to identify the resources required and use the sponsor to help secure them. It’s not simply a case of adding to peoples’ workloads but instead, freeing them of other commitments so that they can provide the necessary implementation support.

Creating a felt need

If there is a felt need, people are more likely to buy into the change than resist it which is why it’s important that those affected are helped to see the vision and understand the rationale. There is no single event or activity that will achieve this. Instead, it’s the combination of all the project activities, communication messages and stakeholder engagement which should have the ongoing aim of creating a felt need for the change.

In summary, to enjoy successful category management within an organization, we have to attend to change management and have an approach to recognize that implementing new sourcing strategies will require people to change. This can trigger the same emotions and feelings of loss, just as we do when we deal with grief.

We can, however, move past this with the right senior support and adequate resources, by involving those who will be affected and working to create a ‘felt need’ for change.

This article is adapted from Category Management in Purchasing (9780749482619) by Jonathan O'Brien © 2018 and reproduced by permission of Kogan Page Ltd.