76% of logistics transformations fail to meet targets

As many as 76% of logistics transformations fail to achieve set goals because they do not meet critical budget, timeline or key performance indicator (KPI) metrics. This is according to new research from analyst firm Gartner. However, responding effectively to team resistance and incorporating feedback increase the chances of a successful transformation by 62%.

‘Leaders often respond to resistance by boosting urgency and adopting a directive leadership style. This is not only ineffective, but actually counterproductive,’ says Snigdha Dewal, Senior Principal Researcher at Gartner. ‘Instead, leaders should involve their teams from the start, embrace resistance, and view it as a resource, not a problem. They would also do well to respond to feedback to adjust transformation plans and the way they are implemented. Harvesting the collective wisdom of their teams can lead to dramatically improved chances of success,’ Dewal said.

A total of 306 logistics professionals from organizations with annual business turnover of $500 million or more participated in the survey. The results revealed that more than 80% of respondents had attempted four transformations in less than five years, an average of almost one per year. It became clear that internal resistance to change played a bigger role in hindering the success of transformation initiatives than external pressure.

Leveraging collective wisdom of teams

The survey further found that 81% of logistics leaders believe transformation is critical but only 20% use resistance as a means of harnessing their teams’ collective wisdom to improve transformation outcomes. Taking this less common approach improved the chances of transformation success by 62%.

The dominant urgency approach, characterized by directive leadership, limited stakeholder engagement, and a ‘get with the programme’ mentality, led to a 47% drop in the odds of transformation success. Gartner calculated the odds of successful transformation based on a regression analysis of organizations’ actions and messaging during their logistics transformation to their teams. It also considered the subsequent impact on success rates.

Resistance as a source of valuable insights

‘Resistance can be productive or unproductive, but leaders must stop seeing resistance as a barrier and instead learn how to use it as a source of valuable insights,’ says Dewal. ‘This approach improves project management results, boosts staff morale, and can also help discover new competitive advantages.’

In this form of leadership approach, Gartner says it is important for leaders to know the objectives and be open to change based on what they learn during the process. They should also involve the unruliest team members in the process to gain a better understanding of any obstacles along the way. In addition, leaders do well to recognize that transformations come with setbacks and therefore focus on only a few, mission-critical aspects.