Manufacturers are innovative by nature. They continually develop unique products and offerings to compete in their industry and they see the importance of innovation to set themselves apart from their competition. This innovation requires an environment in which companies embrace change.
While manufacturers are continually innovative on the product side of the business, however, these organizations often find innovation within business processes to be more challenging. Manufacturers have processes that have been in place for many years and are often resistant to changing them. They have been successful at what they have done and do not want to rock the boat. For valid reasons, manufacturers often avoid change within sales processes and changes to the way they interact with their customers. This creates an environment that makes it difficult to plan and execute a new strategy such as ecommerce.
The Need to Manage Change is Inevitable
When a business makes the decision to drive down an ecommerce path, managing the related changes may be the most important responsibility within the project. Resistance to the change that comes from a digital strategy can come in many forms. Some within the organization might be hesitant to make the investment. Others might see a digital strategy as too large of a change to their day-to-day work activities, and many individuals are leery about changing time-tested business processes.
Managing the change and any resistance within an organization is crucial to the success of an ecommerce strategy. Change management will be needed throughout the life of the project, including strategy adoption, implementation, execution and growth.
Best Practices for Managing Change
Below are some key steps in managing change as part of an ecommerce strategy.
Obtain buy-in from the top: Setting the right “tone from the top” is crucial in getting a strategy off the ground. Everyone in the organization needs to see that the strategy is important and fully supported by the leaders of the organization. The “2019 U.S. B2B Ecommerce Market Report” authored by B2BecNews (now known as Digital Commerce 360 | B2B) reported that “lack of support from top executives” is the biggest challenge for manufacturers building their ecommerce business, as cited by nearly 24% of survey respondents. People will follow the direction of the leaders of an organization. Buy-in by the top executives is not limited to the approval of a budget and must include leadership by example, fully supporting the strategy.
Broadcast the benefits: Clearly communicating the benefits of a successful strategy can allow the people within the organization to better understand the purpose and help them justify their efforts and any potential business disruption. Maybe ecommerce will finally allow a business to start capturing increased market share from its primary competitor. Perhaps ecommerce will allow a customer service group to focus on value-added tasks. Whatever the expected benefits will be, these need to be shared and clearly communicated to the organization.
Find the right person to lead the project: An ecommerce strategy needs to be led by someone who believes in the strategy and is enthusiastic about the endeavor, otherwise known as the “champion.” This person needs to be an agent of change and be able to garner the support of everyone involved in the project. A mix of ecommerce experience, technical knowledge and project management experience is ideal.
Embed throughout the organization: A digital strategy needs to become part of the DNA of the company. The ecommerce side of the business cannot be looked at as a side project and needs to be discussed and evaluated with the core business. The strategy needs to be on the agenda of relevant meetings and widely discussed within the organization. The financial results of an ecommerce channel need to be separately evaluated and communicated so everyone understands the impact on the overall business.
Establish incentives to drive behavior: Compensation is the biggest driver of behavior. An ecommerce system will have a direct impact on many employees, none as directly as the sales team. The same 2019 U.S. B2B Ecommerce Market Report mentioned above also found that over 19% of manufacturing organizations report that “Resistance from internal sales department” to be the biggest challenge in building their ecommerce business. Sales personnel will be much less resistance to change if their incentives are aligned with the new strategy. For example, increased incentives could be offered to the sales team to drive transactions through the ecommerce site. The needed incentives may be different for each organization, but this topic must be discussed early in the process and evaluated often.
Set expectations and measure: The ecommerce project needs to have specific expectations relating to progress of implementing and the launch date. Subsequent to the launch of the new ecommerce site, a business needs to monitor and measure expectations of the financial impact. Likely, a company will make assumptions as part of a return-on-investment analysis to initially support the project. The company needs to revisit these ROI assumptions to ensure the project and results are on-track.
Change Creates Opportunity
If successfully managed, an ecommerce strategy can be very impactful to an organization. It can open a new sales channel, gaining new customers as well as create an avenue to sell more to its current customers. Additionally, it can reduce costs by creating an efficient sales process. These benefits will not come without a great deal of hard work involving keeping everyone aligned and supportive of the strategy. Managing change and being proactive in working with the people of the organization is an important aspect of an ecommerce strategy that cannot be overlooked.
Kevin Heisler is the vice president of finance at GenAlpha Technologies, a provider of ecommerce, e-catalog and customer portal solutions for manufacturers. He can be reached at [email protected] or contacted via LinkedIn.