How to Drive Effective Change Management
Tarik Fathallah, an Organization Effectiveness Manager of Global Supply Chain at Esteée Lauder companies, shares why, in order to move companies, you must first move people.
Adopt a People-First Approach
According to Tarik Fathallah, an Organization Effectiveness Manager of Global Supply Chain at Esteé Lauder companies, the most important aspect of change management is people. In his words, "you have to move people to move companies." It is essential to articulate a clear vision that not only lays out the facts but also the aspirations and values of the organization. The call to action must be strong enough to inspire people to take the first step forward and move towards a future that is aligned with their values and ambitions.
"The only conclusion left is to design a people-centric approach if you want your transformation to succeed."
Tarik Fathallah -
Organization Effectiveness Manager of Global
Supply Chain at Esteé Lauder Companies
However, moving people is not sufficient. Keeping them engaged and committed is equally important. Leaders must be able to articulate a clear and compelling vision, bring it to life, and sustain it over time. Fathallah suggests that leaders should design a people-centric approach to ensure that the processes and technologies that are implemented are used and leveraged in the service of the overall transformation mission and goals.
"Transformation is essentially undertaken because either a team, a business unit, or an organization wants to reach a future state. So there is a destination to each store. The main three pillars that you always hear that OME change practitioners are trained on is whenever undertaking a transformation, you have three things to really take into account: people, process, and technology."
With many transformation projects in the pipeline, it is crucial to prioritize the right project to ensure success. Fathallah suggests that leaders keep the following things in mind when selecting the right project to prioritize:
Ensure alignment with the business priorities
When prioritizing transformations, it is essential to look at where the organization is coming from, where it is now, and where it wants to go. Leaders must identify the business priorities that need to be doubled down on.
Manage the transformation pipeline proactively
Leaders must take a landscape view and evaluate the impact of each transformation, both individually and as a whole. They must take a look at the talent skill set, resources, systems, and processes that need to be transformed.
Be prepared to make tough decisions and trade-offs
Leaders must also be willing to make tough decisions and trade-offs to support the vision and bring it to life.
"You can't have it all. You can't take a kid to a candy store and be like: ‘okay, fill in the bag.’ It just doesn't work. So you have to have some tough conversations. You need to have enterprise-wide visibility. Go back to [the basics]: what are the priorities of the organization, what's worth moving forward with, what's worth amplifying, and what's worth cutting?"
Control for Complexity
As organizations grow and innovate, they introduce new complexities into their ecosystem. Complexity is everywhere, and it can never be diminished to zero. Therefore, it is crucial to control for complexity by eliminating or cycling out non-value generating agents before introducing new ones. This requires a cradle-to-grave analysis of the transformation landscape. Leaders must identify tools, processes, governance structures, and entities that must go or get cycled out before introducing new ones.
"Continuous growth requires a level of continued complexity increase. So as you continue to grow and innovate, there is a level of complexity that's just going to be there. It is an evolutionary byproduct of the process. But I think there is a way to cycle it out. And this is what I meant by controlling for complexity."
1.Change management is a crucial part of any supply chain transformation.
2.A people-first approach is necessary to articulate a clear vision that not only lays out the facts but also the aspirations and values of the organization.
3.Prioritizing the right project is crucial to ensure success. Leaders must ensure alignment with business priorities, manage the transformation pipeline proactively, and be willing to make tough decisions and trade-offs.
4.Controlling for complexity requires a cradle-to-grave analysis of the transformation landscape. Leaders must identify tools, processes, governance structures, and entities that must go or get cycled out before introducing new ones.
So. Hey, Tarik, thank you so much for taking part in this Aim10x knowledge interview. I'd like to start by asking you to introduce yourself and what you do. Sure.
Absolutely. You know, first of all, thanks for having me here. Very happy to be speaking with you and looking forward to our chat. So a little bit about me.
Well, I am an Organizational Effectiveness (O.E.) Manager at Estee Lauder Companies where most of my work is focused on global supply chain transformation. I help enable this work by working cross-functionally with internal as well as external partners and by really looking through the lenses of go to market. How we are structured as an organization.
How we are developing and leveraging our capabilities. And I would say an important part also is how we are setting our people for peak performance learning, but also growth, right? Before joining ELC, what you probably know is a large and global organization with footprint I think around 150 countries and territories or so. My past work experience was historically oriented towards working with smaller teams, and startups on agility, product development, innovation and customer discovery.
Really all with the goal of helping them transition from the bootstrap or proof of concept state to more of a value generating and market acceptance state. Now I can double click on this because I know it's somewhat of an interesting topic and we could come back to it later in the conversation if we have time. But a zoomed out overview of what that really means is a lot of the work that I did with these teams was to help them focus on hacking the value of their product and their services before investing time and money and energy and hacking growth. Now, this might sound a little bit counterintuitive to some people, but it's the best way to really isolate the value proposition signal from the noise.
Anyway. So like I said, we could come back to this later if we have time. And I'm happy to drill down on it a little bit more. But to finish the original question around the bio, I am a certified Scrum Master and a certified Scrum product owner.
And so you automatically see that I'm not really what you would call a traditional organizational effectiveness practitioner but I actually see this unorthodox background as a benefit. We will definitely touch upon some of those things, I think, in the upcoming questions. But thank you for for bringing that up. I'm very intrigued to hear about your background and how that's also feeding into the work that now you're doing as an organizational effectiveness manager.
And so what's come up
in some of your work that I've read about and I've heard is this idea of the human centric approach to digital transformation. It seems as if that's kind of the red thread through a lot of the work that you've done. So I'm curious, could you elaborate on the role that this plays for projects to succeed? That's a very insightful question.
I do talk about it a lot. It is true. But, you know, let me put it this way. Transformations essentially are undertaken because either a team or business unit or an organization wants to reach a future state.
So there is a destination to reach of sort. Okay. Now, the main three pillars that you always hear that O.E and Change practitioners are trained on is whenever undertaking a transformation you have 3 things to really take into account: People, Process and Technology.
So I'll start with the Process and Technology and I'll go back to the People afterwards. And I'm going to try to speak in generality here. Just kind of setting the scope of the conversation. The Process and Technologies obviously you have to be robust, have to be effective, have to be sustainable.
And there is a lot of different methods to guardrail on how to ensure that. But here's where I make the turn. You can create, iterate and implement processes and technology without much need for workforce engagement or motivation, buy-in, education or training. And I say this because these things are to a large degree, systems, routines, mechanisms or procedures, if you will.
They're not entrenched in human psychology. They're agnostic to desires, fear, ambitions and aspirations. The quality of the input dictates the output. I'm oversimplifying.
But the part that is super sensitive to human psychology is the first pillar I talked about, which is the People. And without addressing and managing that, regardless of the efficacy or the elegance of a process or a platform, I can assure you the transformation is doomed from the start. And I'm not trying to sound like I'm an alarmist, but this is not, something that the jury is still out on. In fact, the data is very conclusive.
It's pretty clear that most transformation failures are traced back to the People aspect and how that part of the work is either mismanaged or under supported. And so when you start with that premise, the only conclusion left is to design a people centric approach, if you want your transformation to succeed. So to go back to the original point, you asked about, what is the role that an O.E person or a change management person actually plays in digital transformation?
I would say it's maybe 60 to 70% of the work really is centered around the People pillar and all of the elements that I mentioned before, right? And so you do that to ensure that the processes and the technology that are implemented are actually used and leveraged and deployed in the way that they were intended to, in the service of the overall transformation mission and goals. Otherwise, it's a great platform, but hey, it's not being used or it's being used the wrong way. So that's why I always try to put people first and center the transformation design around that.
If we miss the mark on that, we also miss the mark on the transformation goal. Okay, Thank you. And in one of
your Aim10x roundtables, you talked about the need for prioritization because companies could have many, many transformation projects in the pipeline. And so I was wondering, what are the top three things a leader should keep in mind when they are trying to pick the right project to prioritize?
Yeah, that's a question I get asked a lot. But it's funny you say what is the top three? I usually walk into a room and be like like, here's the top ten things that you have to do, but I know we don't have that much time, so I'll pick the three that come to mind. And I would say, the first one I always start with is ensure alignment with the business priorities.
So when you are prioritizing transformations you want to look at, okay, here's where we're coming from, here's where we are, here's where we want to go, and as an organization, what are the business priorities that we need to double down on? And so there are a lot of different ways that you can do that. But one of the approaches that's, practiced is focusing on expand, extend or defend. And, if I may tack something else to that, I would also say that once you have classified your transformations across those categories, you want to make sure that you're focusing on the must haves versus the nice to haves.
So let me elaborate a little bit on the categories. So you have to expand, right? So when you are looking at a transformation, the question you ask is, is this transformation going to enable you to create new business value, either by adding new products or services? Or is it going to help you expand your market share and deliver value to your customers, stakeholders and shareholders?
The next one is extend or defend, right? I always to mix them up. Extend, which is, is this transformation going to be building on top of what you already have? To either augment existing capabilities or products or to extend the value generating activities through upgrade and optimization?
And this is really where a lot of the digital transformations actually fall. And then the last one is defend. Which is, is this transformation going to help me protect my core business, market positioning and really get me to compete with my competitors and disruptors? Because if you can't defend against that, somebody is going to be coming and eating your lunch, right?
And so you want to make sure that you're always optimizing, upgrading and bringing the best capabilities into place to continue to compete in the market. So that's one. The second one. The second point I usually urge leaders to really think about is, what does your transformation pipeline look like?
So you have to manage it proactively. The way that you do this is you take a landscape view and see how all the transformations that you have on the table are synchronized and you evaluate the impact. And this is an important part, both of the parts that each transformation is having, but also as a whole, which is, the interaction between all of these transformations and the emergence that happens from it. Because you want to see what the whole ecosystem impact is on the organization, especially if you have people being hit by multiple transformations at the same time.
But alongside that landscape assessment, I always say you must also take stock of the talent skill set that you have, the resources that you have, the formal systems and the processes you're trying to transform because some are just harder than others. You might underestimate what it takes, what is the governance structure that you have in place that's going to come into play here? And what is the organization's culture and behaviors that are going to be a prerequisite to the success of this transformation? So you really have to take a look at.
And then the last one, I would say, and this one usually I classify pretty high in the list is, you got to be prepared to make tough decisions and tradeoffs, right? You can't have it all. You can't take a kid to a candy store and be like, okay, fill in the bag. It doesn't work.
And so I say this because this really requires a lot of healthy debate. You need to have some some tough conversations. You need to have an enterprise wide visibility. Go back to the person.
What are the priorities of the organization? What's worth moving forward with, what's worth amplifying and what's worth cutting? And you have to do that in a way that's forward looking. You can't look in the immediacy.
I know sometimes the need is for today, but guess what? We're not just looking to survive today. We're looking to survive today and thrive tomorrow. So you have to have that forward looking planing mindset.
Wow, if that's the first three, then I'm very curious what the next seven are. We'll have to set up another call and interview for those but I think I covered some of them during the roundtable and got a lot of attention because they landed pretty squarely with people. Yeah. So in that roundtable also,
there were two phrases that really caught my eye.
The first was "you have to move people to move companies." And then there was "controlling for complexity." And so I was wondering if you could elaborate on these a little bit and how you kind of incorporate these ideas into your work. I think the "move people to move companies," or organizations is, I truly believe that people are driven by purpose and vision.
So it doesn't matter if you are a climate activist trying to convey the horrible impact of rising oceans and global temperatures. If you are a startup founder trying to give a team of talented engineers, that she can pay yet, to believe in the promise and the potential of her idea, or in our case, the supply chain leader trying to augment her functions, performance and agility by leveraging and adopting an A.I powered system. Which will then enable her company to break into the next stage of growth.
It doesn't really matter. The overarching theme across all of these examples is that it is important that the leaders are able to articulate a clear and compelling vision that lays out not only the facts but also the aspirations of the moment and craft a really strong call to action to inspire people to want to take that first step forward but move, here's the move part, towards a future that not only serves the business and the objectives, the strategic objectives of an organization, but also that are aligned with their values and ambitions. Does that make sense? Yeah, absolutely.
But I have tag this and I've learned the hard way. I have to tag, I think, a caveat to this, which is, this is necessary, but it's not sufficient. Moving people is one thing. Keeping them engaged and committed is another thing.
So it's important to acknowledge that there are a lot of other things that also have to go right to support the vision, bring it to life and sustain it over time. I'll stop here for that one.
First, let me say this about "controlling for complexity," continuous growth requires a level of continued complexity increase. So as you continue to grow and innovate, there is a level of complexity that's just going to be there.
It's inherent. It is an evolutionary byproduct of the process. This is especially the case when growth is fueled by innovation and introducing new products and new services and penetrating new markets. So in other words, through continuous innovation, you are continually introducing new pressures to the ecosystem.
And thus placing performance pressure on its output. Now, complexity is everywhere. It's not just within organizations, it's also externally, so the conditions of the market, the sentiment of the customers, which is changing by the second, or the complexities of the operating model, the rising and falling expectations of clients if you are a B2B or a B2C. So it's really everywhere.
So I say this to say that complexity can never be diminished to zero. That's just the way it is. But I think that there is a way to cycle it out. And this is what I meant by controlling for complexity.
Okay. So let me put it this way and I'm going tp tap back into my previous background, working with product managers and startups. I want to anchor this in a a practical example. And that is, not sure if it's an apt analogy, but just go along with it for a moment and if it doesn't work, push back on it.
Like, hey, you know, I need another one. Let's go. But in product development, there is a concept of 'cradle to grave.' So probably you've heard about it.
Not always the most successful approach, but it does, I think, illustrate the the parallel here. And that is basically, when you manage a product from its inception to its death, speaking figuratively, this approach is usually used for products and portfolio life cycles. And so it basically forces the product manager or portfolio manager to retire or recycle a product at a certain point. Why is this important to you, you might ask?
Well. If you don't recycle, if you don't practice this approach, what you'll have is tremendous focus on product development, product improvement, product introductions, leaving every element of the previous product behind after it has become irrelevant in the market because after it has run its course it becomes obsolete. And so you have a whole lot of non-value generating agents that are just sitting there consuming energy and bandwidth with little to no return for the ROI. So I use this simplified parallel because I think it's a good reference approach in transformation.
And so when you're introducing that transformation, when you're looking at transformation assessment, doing that landscape view, if you use this 'cradle to grave' analysis, identify what tools, what processes, what governance structure, what entities must go or get cycled out before you introduce a new one, it will help eliminate or at least control the complexity. so it's in a sense you're basically using complexity as a constraint that forces you to take some out before you put something in. I hope that made sense. It makes a lot of sense.
It makes a lot of sense. I like that. Using complexity as a constraint. I mean, of course it is.
But if you're actively using it and kind of aware that it's there, then you're able to really plug in and plug out what you need to move towards success. The funny part is that the most frequent pushback that I get from this is that, sure, you can use complexity as a constraint, but you can't use it as a zero sum. Well I never said you could use it as a zero sum because I think, and this is also learned the hard way, I introduced my concept by first claiming that complexity is inherent in growing a system, especially through innovation. It doesn't have to be a zero sum, but a 70/30 would be great.
Like, if you have a bunch of kids that want a bunch of toys, first look around at the toy basket. How many toys do you have? How many of them are you using and which ones are broken that are just taking space? Get rid of that, introduce the new ones and make sure that the new ones actually remain desirable for a while and not you get to play with them for two days and then throw it and then you want another one.
So that's really what I I'm trying to get at with this idea of complexity as a constraint. And so to go to my last question, I want to
talk about the F-word. And that F-word is failure. So in the startup environment, as I'm sure you know, you are allowed to admit when you failed, but this came out of the roundtable that you were part of that in more traditional industries, it's not as accepted.
So given that failure or as you called it, the grave, in transformational projects, how do you in your work train or nurture teams or leaders to navigate the potential risk of failure? Yeah, it's an interesting and important question. But I'll tell you what has changed, not just since the roundtable, but I think I'm forever the rebel. I'll come into the room with just so much enthusiasm and energy around this idea.
But I think that I've learned, or at least got beat down by reality, because when you're operating in a small, and for me it took some time for really to accept the realities that when you're operating within a small team or a startup, you have the privilege to be able to make mistakes that you can recover from and then just pivot. Sorry, go through failures, and then you pivot. When you're in a larger organization, you have to take so much into account because there is so much dependency within the ecosystem that you have to think from an enterprise point of view and not just from an agility of a team of seven or what they call the 'pizza-sized' team.
I think Amazon came up with that concept, that you can't grow your team beyond what you could feed with a single piece or two pizzas. So I think that's the mindset shift for me that happened. But first let me switch the word failure with the word mistake. Can I do that?
Absolutely. Okay. I'll tell you why I think mistake is a better word. For one, it's because of intentionality.
I think there is always an expectation built in, or at least part of the norms that have been evolved over the time in larger organizations that mistakes will happen. But I think also, because the word mistake does not carry the same type of penalizing implication as well as terminal connotation that the word failure has. It's like when you say failure, there is nothing beyond this point. And so it's critical that you preserve that continuity.
And here's why I say that, because if leaders embrace learning from your mistakes and improve by learning, there is only one direction their teams can go and that is forward. I think it's more palatable for leaders, more acceptable to say that, more acceptable given the culture, the organizational cultures of larger organizations to to adopt that. There is a well-respected and shrewd leader inside of our organization that I once heard say something that really stuck with me. They said, we never lose.
We either win or learn. It's like a panacea equation. I'm not sure exactly how they arrived to to that thinking, but it doesn't really need much contest. So if you are a team with your leader in a room and you hear your leaders say this and you see it done in practice, what I think it will do is that it prompts you and your team to want to take more chances, to want to innovate more and be super transparent about what is going well and what is not.
Because guess what? If we fix the problem, we win. If we fall short, we've learned much about how we came to that point and so we can avoid the mistake next time and still have the opportunity to build and iterate on what has been validated and potentially take it the distance the next time. I have a lot more to say, but I think I'll stop here for the sake of time.
So I hope that answered the question, at least in a quasi way. Absolutely. I really like the new take on it. I think it actually helps not just teams, of course, but it's a great way to be thinking as an individual moving through life.
So yeah, I really like that. So thank you Tarik, we will definitely do a follow up on this very topic. I think there's a lot to be discussed, especially within the industry that we're in. But thank you so much for your time.
Your blueprint to Sales and Operations Planning (S&OP) excellence
Transform your supply chain operations and navigate complex challenges with ease. Download the informative E-book.