Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
December 13, 2018

The Link Between Supply Chain and Organizational Culture

By Gianluca Bianchi, Pietro Mazzocchi

Historically, supply chain has been synonymous with getting from point A to point B and creating efficiencies. Today, digital disruption, changing consumer behavior and increased competition are inspiring major change within the function, and the adoption of technologies such as blockchain and predictive analytics are only part of the equation.

At our recent roundtable hosted with Supply Chain 50 and Burberry, we talked with Roberto Canevari, the retailer’s chief supply chain officer, and some of Europe’s top supply chain leaders about a critical component to this evolution that may seem a bit unexpected: organizational culture. Canevari outlined his views on the fundamental need for leaders in supply chain to be highly collaborative and operate with a growth and learning mindset, attributes that should translate to the function’s culture.

Studies have shown that a strong culture drives organizational outcomes when aligned with strategy and leadership. To respond to a rapidly changing world, our data is showing us and we are seeing many organizations shift toward cultures that emphasize learning, growth, collaboration and innovation — the very dimensions that have become key for supply chain success.

Burberry's Regent Store served as the setting for our discussion on the evolution of supply chain.

The change in customers' attitudes and preferences, the rise of new business models and development of new technologies are three main factors impacting supply chains. These factors have always been present, but the pace of change in all three is unprecedented. The changing distribution methods are forcing supply chains to evolve — and fast.

Supply chains shouldn’t be managed as “chains” anymore. Instead, supply chains should be treated like ecosystems where actions can run in parallel to each other. The benefit of working in this way is that organizations can try different solutions before they scale the ideas that are successful. This gives the supply chain team a chance to test solutions, without risk to the business, and increases employee and process development. 

To keep up with the changing environment, organizations must not just evolve internally, but collaborate with external stakeholders too, as working with supply chain partners and customers benefits everyone.

Supply chain leaders play a key role in driving the culture shift

Leadership and organizational culture are inextricably linked. The evolution of the supply chain function in these last years, driven by changes in technology, the rise of omnichannel, shifting consumer habits and emerging big data capabilities has led to a different style of leadership. As the function has become more strategic, leaders have had to master the end-to-end supply chain, act as champions of collaboration, and attract and retain people who align with the organization’s culture.

To respond to forces like disruptive technologies, organizations may need to shift toward more flexible, agile and innovative cultures. As the target culture takes shape, supply chain leaders and other senior executives will need to look at employees’ styles and behaviors, as well as their own. People follow what leaders do, not necessarily what they say. In this context, supply chain leaders need to understand how their actions influence their employees’ actions. For example, a supply chain leader with a command-and-control style may be inadvertently encouraging others in the function to adopt that approach, and as a result, undermining efforts to improve collaboration.

The rise of the learning culture

Distribution in the retail industry may look very different just a few years from now and a culture that fosters learning will be better positioned to adapt to that new environment. Learning is also instrumental in driving efficiencies in supply chain, especially in a world where leaders do not have the full control of the supply chain anymore and one, two or even the whole of the supply chain stages delegated to suppliers. Supply chain leaders should also look outside their function to areas such as sales, finance and IT to gain more insights on customer demands, the risk of strategic investments, and technology developments like artificial intelligence, robotics and “dark factories,” 3D printing and blockchain.

In this context, a learning orientation can help create improvements for increasingly complex supply chain organizations. In a secure, open environment, teams are encouraged to explore and pilot new ideas. Not only will the teams manage the day-to-day operations more effectively, but they will have the freedom to innovate new, better ways of operating.

Gianluca Bianchi leads Spencer Stuart’s Supply Chain Practice in Europe, the Middle East and Africa, and is a member of the Consumer and Technology, Communications & Media practices. He is also a member of the global Marketing Officer Practice and leads its efforts in the Italian market. Reach him via email and follow him on LinkedIn.

Pietro Mazzocchi is a member of Spencer Stuart’s Supply Chain and Transportation & Logistics practices. Reach him via email and follow him on LinkedIn.