Supply Chains at a Tipping Point

4 MINDSETS for Leading Transformation

Patricia McLagan

Supply chain leaders are at the tipping point of T3[1] transformation for your supply chains, but also for the business as a whole.  What does it take to be a change agent during this shift into the era of Industry 4.0?

The traditional answers are: “develop these skills/competencies,” “change these behaviors and practices,“ “follow this change management project plan.”  In times of T3 transformation these responses do have value, but they are not where the big leverage is.  Rather, your main personal development focus in transformational change must be on MINDSETS.

Mindsets are world views, assumptions and beliefs that underlie attention and intentions. Specific situations and capabilities affect what you do, of course. But, overall, your mindset influences most behavior. Therefore, it’s a high leverage focus for your own development as a transformational change agent.

Mindsets influence two powerful behavior influencers: attention and intention. These, in turn, affect a vast array of behaviors.

Transformational times are transformational because they require changes at the mindset level. Unless mindsets realign with the new realities of Industry 4.0 it will continue to be difficult to co-evolve the human and the technological dimensions of the business. Change failure rates and suboptimized investments will continue,[2] and the move into 4.0 will be painful for everyone involved.

Four Mindset Templates for 4.0 Era Leadership

Industry 4.0 asks everyone to realize that their organizations are not the closed, mechanical systems we thought. They are open, living systems where human and technological forces are combining to survive in a vastly more complex and uncertain environment. This dynamic view of the business requires everybody to make four big mindset shifts related to power, identity, sense-making, and change itself.  As a supply chain leader who wants to operate at the tipping point of this T3 transformation, plan to focus development efforts on these mindset areas – starting with your own.

What’s in YOUR Mind?

The POWER Mindset – Hierarchical or Distributed

Conditions are ripe for distributed power to move to the point of “best informed insight and action.” This means that self-empowerment can become a cultural norm rather than just a slogan. But old power and control mindsets, in spite of all the rhetoric about empowerment, are still often hierarchical and continue to get in the way. As a change agent, plan to signal and lead from a more distributed view of power.

Search inside yourself.  Is your internal image of the enterprise the traditional command and control pyramid? Or is it a value stream where power is distributed and supported by technology as well as your own leadership mindset?[3] Be alert for the mindset that really guides your actions.  Then use that awareness to realign that mental image to support the power transformation that Industry 4.0 requires.

The IDENTITY Mindset – Silos or Holograms.  

People act differently if their primary identity is with their silos and jobs rather than with the overall success of customers and the business. Silos and job descriptions reflect a view of people as puzzle pieces – jobs and specialties — that, added together, create business success. In a more fluid enterprise, however, people identify with both their specialist contributions and the larger business. They work to solve upstream and downstream problems as well as those in their narrower wheelhouse. This view of the business is similar to a hologram where every piece contains information about the whole.  

It’s time to bring horizontal interactions into the day-to-day mainstream. How you support the core value stream[4]  of the business provides clues to what your mindset really is. With this awareness, you can then decide what identity shifts you need to make and help others make.

The SENSE-MAKING Mindset —  Deterministic or Probabilistic  

A rational, scientific, and engineering world view launched and gained steam in the first Industrial Revolution. It assumed that with knowledge, people can solve any problem and control any event. This deterministic thinking still dominates today and continues to be important for technological success. But while rational thinking works in the technological dimension of the business, it is not always effective in the human dimension.

Probabilistic thinking from psychology, sociology, complexity science is what you need to make sense out of some human behavior and emotions.  Probabilistic thinking that accepts and appreciates randomness is also the way to understand and support, creativity, innovation, algorithm detection, collaboration, and  empathic service. Deterministic methods like rewards, punishment, mandates, and indoctrination don’t work to unleash these behaviors. In fact, deterministic methods can alienate.  You need a separate pair of mindset glasses when you deal with the human vs the technical dimension of the business. Get yourself both pairs of glasses and practice wearing them when they apply.

The CHANGE Mindset – Transactional and Transitional to Transformational

Transformational change is emergent change. It evolves in response to problems that can’t be resolved using existing mindsets and that can’t be controlled from top down. In transformational change, parts of the system self-organize. Through trial and error learning, they change and reassemble to better survive in the new conditions. Transformation requires a lot of experimentation, resources, and energy. In transformation, the most productive ideas often emerge from the fringes and are attacked by the status quo. Some ideas fail many times before they go mainstream.

The change leader’s role is to be aware of these dynamics, to protect new ideas and give them space to be tested and grow, to keep the long view, and to know when to step in with resources and directional decisions.  It takes a transformational change mindset to respond this way.

It Takes a Transformational Leader

Of course, these four mindset shifts are not either-or dichotomies.  Institutions require hierarchy– but reimagined. Specific identities and specialties are key to human self-esteem and functional excellence in business, but in what relationship to the bigger picture? Rational, cause effect thinking is essential for order and production, but creativity and evolution rely on the probabilistic living energy in your business. And change in turbulent times can’t be harnessed like a wild horse and bent to fit strategies, you must ride it and together discover where it goes.

Power relationships, identities, sense-making, and the processes of change all have new meanings in this 4th Industrial Era.   You may not have asked for it, but as a supply chain leader you are bringing not only the supply chain, but your entire business into this new era.

Mindset leadership isn’t easy. The mindsets that are driving your intentions, attention and actions may not be what you think they are.  So you must be alert to discrepancies between what you think and what actually guides you.

The place to start is with yourself. Notice what you are doing and thinking. Watch for mindset patterns. Ask yourself: What do my thoughts and actions reveal about my power, identity, sense-making, and change mindsets?  This will then trigger the self-awareness and deep personal change that will define you as the transformational leader for these challenging times.

[1] See Article 3

[2] See statistics in Article 1

[3] Network and ecosystem views of the enterprise also support distributed power.  Others will emerge as closer alignments of organization form and function become possible.

[4] In our change diagnostic surveys, cross-enterprise information flow is always rated near the bottom – suggesting that silo identities prevail.

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