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When change backfires

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in Leaders & Managers,Leadership Skills

Two years after Stephen P. Kaufman joined Arrow Electronics in the 1980s, he sought to improve the company’s inventory management system. Outside consultants recommended that he separate marketing personnel from those who purchased inventory.

“It made sense to reorganize,” recalls Kaufman, who eventually became the company’s chairman and chief executive before retiring in 2002. “The marketing people worked well with customers and suppliers, while the people who purchased inventory needed to be more mathematical and analytical.”

But the change provoked widespread discontent as marketers resented losing the chance to buy inventory. They viewed purchasing inventory as a “powerful tool to trade favors with suppliers,” Kaufman says, and they did not want to forgo that power.

Kaufman initially defended his decision. He told the marketers, “You didn’t even like purchasing inventory! And you’re not mathematical and introverted.”

Nevertheless, the marketers sabotaged his attempt to improve the system. Kaufman, who was general manager at the time, relented.

“I was confronted with whether to pull back or fight and fire somebody for not following the rules,” he says. “I caved. I put it back the way it was. It was not a hill worth dying on.”

Looking back, Kaufman admits he focused too much on the technical solution without thinking about implementation. Now a senior lecturer at Harvard Business School, Kaufman advises managers to prepare for reorgs by generating team buy-in.

LESSONS LEARNED

Follow these steps to lay the groundwork for potentially disruptive change:

Form diverse teams. In preparing for the change, Kaufman spent much time with consultants and inventory management experts. But he didn’t include marketing personnel. In retrospect, he says he should have “won over key marketing people to serve as champions who could go back to their department and explain the change favorably.”

Compromise for the greater good. Kaufman says that a 70 percent solution implemented with 100 percent effectiveness beats a 100 percent solution implemented with 70 percent effectiveness. In other words, rally everyone to comply during the follow-through phase. If they’re disgruntled, they might sabotage a technically perfect solution.

 

 

 

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