How Trigger Events Can Get the CEO's Attention
By Brian J. Gibson, Stephen M. Rutner, and Karl B. Manrodt -- Supply Chain Management Review, 11/1/2005
“I don’t know what the hell this ‘logistics’ is that [General of the Army George C.] Marshall is always talking about, but I want some of it."
-Admiral E. J. King, Chief of Naval Operations
As Admiral King’s comment to a staff officer in 1942 indicates, the highest levels of the U.S. military have long recognized the importance of logistics and supply chain management (SCM). Before World War II ended, everyone knew what General Marshall was talking about and Admiral King had plenty of logistics capabilities in the Navy.1 These leaders and their successors recognized that logistics and supply chain capabilities often define an organization’s operational limits. They understood, too, that supply chain considerations must be integrated with the strategic planning process.
Fast-forward to 2005. Today, the recognition of logistics and SCM among C-Level (CEO, CFO, and COO) executives in the private sector is nowhere near as strong as it has been among their counterparts in the military. Supply chain managers themselves clearly recognize the potential for their operations to cut costs, improve customer service, and grow revenue. But their senior executives may not have had their Admiral King-like epiphany with regard to this business discipline. Certainly, organizations like Dell, Wal-Mart, Amazon, and other innovators realize that effective SCM enables them to provide higher levels of service at lower costs. However, many C-level executives in other organizations have yet to understand—let alone appreciate—the connection between supply chain competency and corporate performance.
A recent study sponsored the Council of Supply Chain Management Professionals (CSCMP) sought to gauge C-level executive awareness of supply chain management.2 (For more on the study's methodology, see sidebar on page 42.) That study, conducted by the authors of this article, analyzed senior executive perceptions of SCM from several different angles. The study’s overarching goal was to identify what these top executives thought about SCM and, based on that understanding, to articulate how best to communicate its value to them.
Trigger Events Provide Opportunity Throughout the research, the supply chain professionals and C-level executives we interviewed provided a candid assessment of their supply chain management perceptions. In many organizations, executives are blissfully unaware of SCM as long as the supply chain is running smoothly. As one supply chain executive put it, “No one cares about supply chain management until there is a problem.”
While this appears to be a harsh evaluation on the surface, the reality is that most C-level executives have limited time to devote to supply chain matters. Given their broad range of responsibilities, senior management’s involvement with SCM issues tends to be sporadic and situation-specific. For that reason, supply chain professionals must be prepared to grasp those opportunities that arise from executive involvement in SCM. They must be ready to fix tough logistics problems, deliver value though supply chain initiatives, and support corporate strategy through supply chain operations. Such tangible contributions will showcase the impact that SCM can have on the organization and enhance the value perception among the senior executives. The interviews, case studies, and document analysis conducted for this research revealed that certain developments—like an executive’s situation-specific involvement in SCM—often serve as “trigger events” for change. Specifically, these developments provide and precipitate unique opportunities to change the way in which C-level executives view SCM—and in doing so, gain their support of and commitment to the discipline. It is important to note that trigger events will serve as catalysts of change only if supply chain professionals are able to recognize these situations when they arise and respond appropriately with successful solutions. In the words of study participant Joe Desarla, vice president of integrated supply chain at Honeywell Automated and Control Solutions: “You have to use a tipping point as the rallying point to get more people to believe in what the logistics group can do.” Continued...
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