Governance and Implementing Transformation – The Importance of Executive Sponsorship

SIG University Certified Supply Management Professional (CSMP) student, Justin Kline, works at Canon. In this blog, he shares his learnings about the pivotal role of executive sponsorship in governance transformation and how his team plans to implement some of the best practices within his job function and organization.

In this program, SIG University students will comprehend the significance of governance, risk and compliance. They’ll understand the various levels of supplier management governance, including corporate, business unit and contract level activities. They are also able to select the appropriate governance program, and key components, for each relationship model. They gain an effective understanding of how to capture and activate innovative ideas through the governance structure, in addition to describing the critical tools to use in implementing a governance program.

At Canon, I am responsible for scoping and delivering outsourced services to our customers. Today, our customers are looking to Canon not only to take over a business process but also to assist or lead the transformation of the process simultaneously. These types of projects require more time, resources and investment by both sides to achieve targeted results. This level of investment and risk makes these projects higher profile.

Since transformative change is disruptive and typically requires a paradigm shift within the organization, it necessitates the right types of governance to manage successfully. One of the critical elements of ensuring a transition plan is effectively met is having the right level of executive sponsorship and involvement.

Any project that requires change will go through The Change Curve. Transformation projects, such as outsourcing a department or functional area, building a shared service center or a new joint venture, has a greater chance of being derailed during the negative swing where shock, anger, fear and other unproductive emotions commonly occur. When project stakeholders are reluctant to change, they can introduce challenges that are not fact-based, create roadblocks or merely try to automate a bad business process. There also could be instances where stakeholders have competing motivations or goals that create conflicts or barriers to success. For example, the procurement team may be concerned with taking the time to complete a thorough analysis while the business unit is interested in speeding things up to get their product to market.

These types of challenges make it critical to have the right level of executive sponsorship involved in these projects. There are three areas that the executive sponsor(s) should play a role as the project goes through the transition plan. From my experience, it is a lack of executive sponsorship that leads to failure in most transformative projects.

Firstly, the executive sponsor has to create an environment that fosters innovation and open-mindedness. The project must have a means for collecting or capturing change to ensure that all good ideas are reviewed and if needed, escalated for supervisory review. Also, it is essential that the sponsor is accessible to the team to provide an outlet for innovation that is prematurely stopped in the screening process due to stakeholder conflict. This suggestion helps ensure that change resistance did not lead to good results when excellent was possible.

Secondly, a good communication plan is as only as good as the executive behind it. It is critical to have essential communications come from the executive sponsor directly to ensure that it gets the attention that it requires. Everyone today is overwhelmed, and it can be difficult for team members to prioritize what should be consumed. By having key or summary communications come directly from the top, it can help ensure that other communications are treated with the same level of importance.

The third and the most crucial area is key stakeholder alignment and management. The executive sponsor needs to weigh and consider all of the stakeholders needs as they relate to the overall goal of the project and direction of the organization. This idea is critical to ensure that the whole transition is successful and not aligned with the needs of a few stakeholders. There are always times in a project where the executive sponsor needs to manage stakeholder’s interests and negotiate a compromise when there are conflicting interests, goals, and requirements. I have seen many instances of false red flags and new demands being introduced by stakeholders to try to steer projects to their comfort zone or to minimize change. The executive sponsor should be where the “buck stops” and all the difficult decisions are made.

In summary, the executive sponsor plays a critical role in creating an innovative environment, establishing effective communication and prioritization as well as managing stakeholders in any transformative project.