Sustainability & Strategy Manager Alan Hayes considers how the role of leadership is changing in the food and grocery industry, and how we can use leadership within supply chain to increase agility.
I was reminded recently by a colleague that change is difficult in the beginning, messy in the middle, and glorious in the end. This echoes the message that “even successful change efforts are messy and full of surprises” (Kotter, 1995).
Every day we hear about the relentless pace of change – from our leaders, commentators, media and academia. Frequently, we also hear that the scale of change is unprecedented. The assertion that both pace and scale of change are also increasing is inescapable, especially in the competitive and fast paced food and grocery industry.
The 21st century is already posing major challenges to the ability of leadership teams to handle the relentless stream of emerging crises around the world, whether they are viewed as sources of challenge or opportunity or both. Events around the world have accentuated the change and uncertainty that many feel. “The developing impact of Brexit in the UK and Europe, the elections of new global leaders around the world, and ongoing conflicts in the Middle East and Northeast Asia” (EY, 2018, pp 2) are a few examples of rapid change and increased uncertainty in 2018.
Changing policies and attitudes in many countries add a further dynamic, resulting in a level of uncertainty for business that slows decision making. Going further, IGD’s recent Vulnerabilities in Global Supply Chains: Geopolitics report states that “a rapidly evolving, more interconnected world has opened up a world of opportunity, but it has also added complexity to businesses and their supply chains” .
Leadership challenges in food and grocery
These crises emerge rapidly, from political or economic or societal shifts, and are often unanticipated by organisations and their leadership teams. They indicate a world of unprecedented change and complexity, driven by digital technology, globalisation and demographic shifts.
The forces driving these crises are also reshaping the food and grocery industry, and the challenges for leadership teams are similar to those in every other major industry. Technology and social media companies have become the new gateway to consumers, and suppliers across the entire supply chain need to change dramatically to stay relevant to consumers through the rapidly changing retail landscape. Additionally, the continued increase of environmental risks and degradation of the global environment is straining agricultural and food production systems, as highlighted in IGD’s Vulnerabilities in Global Supply Chains: Environment and Resources report.
Change management remains difficult
Organisations will have to become more comfortable with operating in such an ever-changing environment. Management training focuses on the need to manage change, as advocated by leading thinkers such as John Kotter through “Eight Steps for Transformational Change” and leading academics such as Julia Balogun through the “Change Kaleidoscope”. Significant budgets and capital are invested in change programmes, change management expertise, developing change agents.
Yet, change remains difficult, and this is driven by two considerations in particular for food and grocery:
- Much of the change taking place in the food and grocery industry is in fact significant disruption of established business models, and
- Much of the managed change which organisations do take on is reactive, where their hand is forced by a variety of external issues (e.g. macroeconomic impacts, shopper trends or environmental considerations).
Disruption includes such trends as the rise of discount retailing, the growth of omnichannel shopping, increases in shopping frequency and changes in consumer preferences. Many of these are truly disruptive, rather than evolutionary change. Artificial intelligence and physical automation are providing the opportunities for food and grocery supply chains to cope with this disruption.
The role of leadership
One perspective on the impact of the increasing pace and scale of change focuses on how leaders can and should respond to the uncertainty which all of this brings. Coping with change is becoming a core skill set for leaders, managers and their teams.
Given this backdrop, it is reasonable to consider the role of leaders and of leadership itself. Leaders are the individuals who hold positions at the top of organisations, functions, teams. Leadership is a process, one which involves influencing others and facilitating both individual and collective efforts towards a shared objective.
Recent leadership research is signalling the end of the “heroic CEO” (Wageman et al,2008) at the top of organisations, and the emerging opportunity for teams to fulfil much of the leadership roles within organisations. More organisations are turning to team-based leadership approaches in both profit and non-profit arenas, shifting away from reliance on the sole hierarchical leader for leadership, and indicating the limitation of a leader-centred approach to business. Many organisations operate through cross-functional and business unit teams, rather than conventional hierarchical structures with a single leader. As organisational structures become flatter, and the pace of decision making increases, the ability for leadership to be shared beyond a single individual is becoming vital.
If you need to be convinced of this, just look at the success of entrepreneurial businesses before they take on the structures of established corporates. Next, look at the impact which the failed approach by 3G Capital had on Unilever, as the latter decentralised and delayered to be more responsive and nimble, as well as more profitable through doing so.
Leadership, rather than leaders, is therefore seen as the key to addressing the challenge of leading organisations through the pace and scale of change which surround them in their markets and environments.
Sharing leadership to increase agility
This is particularly relevant for supply chain leadership and the function itself, as supply chains are possibly the most disrupted and interrupted part of any food and grocery organisation. If our organisations and their supply chains need leadership to be fit for the world of the 21st century, then the way we think about leadership needs to change radically. This imperative is reinforced by Bersin (2018), stating that organisations need to “be digital” through rethinking leadership and management models. He has found that “70% of surveyed business leaders believe that they do not have the right leadership to adapt” (Bersin, 2017, pp4) in response to digital forces of change.
How does leadership work in your organisation, and more importantly, in your supply chain functions? Does it flow vertically, down the organisational hierarchy and through functional heads? Is there evidence of a sharing of leadership amongst teams, real and virtual, and their members where official as well as unofficial leaders emerge to take on the responsibility and reward of leadership?
Organisations need both vertical and shared leadership. The former provides stability and control, and the latter can provide greater agility to anticipate change and respond more promptly.
Hierarchies and vertical leadership are not enough. Leadership must be shared for success in the food and grocery industry, now and forever.