Do You Know the Difference Between Strategic Sourcing and Category Management? Top 5 Minimum Requirements

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While I won’t share my top 5 today, I will share one of them that MUST be in everyone’s top 5 to move to Category Management or they may not know what they speak of and that is a High Performance Leadership Team (HPLT). The Leadership Team (LT) of the function must be operating at a peak level as a team for the organization to have any (chance of attaining the goals of Category Management (CM). As a reminder, here is the model for CM that we use:

While you may or may not agree with all of this model, I’m sure you agree with the gist of it. For any organization to make this type of fundamental shift to CM, our experience and other independent research has shown that without a High Performance Leadership Team, there really is no way to make that shift or Transformation happen.

In addition to demonstrating the right behaviors as a team – both to their employees and their stakeholders – the level of ownership and accountability that HPLTs have as a team for the entire Transformation is the key ingredient for success. The focus on Context (e.g. Environment, shift to Collaboration, shift to Value) and not just the Content (e.g. processes) can only be achieved with a HPLT. With a HPLT, the leader’s job is to stay out of their way, give them whatever support they need and focus on managing boundaries and Executive Sponsors – which is what the organizational leader’s job should be in the first place. Obviously, the leader’s first job is to “create” a HPLT and that’s easier said than done. While every Transformation we have been involved in, the client is always looking for a Business Case, a Transformation Roadmap and a plan (and we provide all that is needed from those),we also ensure that the client understands that without a HPLT, they are adding significant time, effort, challenges and risk.
Let me share portions of a recent customized HPLT diagnostic from a Transformation to further illustrate my point. For sake of brevity (and to save some of our IP 😊), I have removed some of the details but left enough to explain:

o             LEADERSHIP

  • ·      
  • ·
  • Establishes clear roles and responsibilities
  • Consistently models the behaviors they seek in other – sticks to them even under fire
  • Drives focus around strategic priorities and works with others meet goals
  • ·      

o             PLANNING

  • Creates objectives with clear intended consequences driven by Stakeholder Value Drivers
  • Develops forward-looking, global view of opportunities & challenges
  • Sets goals that are aligned with strategy and are aggressive but attainable
  • Follows a consistent planning methodology

o             LEARNING

  • Views failures as learning experiences
  • Accepts coaching from inside and outside the team
  • ·      
  • Evaluates its performance as a team
  • Uses inputs from Stakeholders to help identify areas for team improvement      

 

o             TEAM EFFECTIVENESS

  • Addresses conflicts as growth opportunities
  • Trains as a group to improve team processes
  • Develops a sense of mutual trust and shared responsibility
  • ·      

o             Communicates and interacts with company as ONE VOICE

  • ·      
  • ·

o             DECISION MAKING

  • · Addresses Decision Making as major challenge       
  • ·      
  • ·      

o             Balances inputs, analysis, and discussion while remaining efficient

  • ·      
  • Establishes clear decision processes / governance structures
  • Delegates authority to the appropriate level in the organization                

o             INFRASTRUCTURE

  • Ensures alignment of the processes, tools, technology, etc. with the requirements of the Transformation
  • Align existing organizational structure against the Transformation
  • Created a business plan to support the required infrastructure and get support from Executive

o             CHANGE READINESS 

  • Created a compelling, global business case to support Transformation
  •              
  • Identified a powerful, committed global sponsor for Transformation
  • Established realistic expectations for the time and effort required to implement Transformation
  • Accounted for existing culture, strength of mgt, and time/effort required to implement Transformation
  • Assessed nature of past change failures and accounted for this in working toward Transformation

o             MEASUREMENT

  • Aligned individual personnel performance measures with the requirements of Transformation
  • Developed dashboards to report on the progress toward Transformation
  • Established interim performance goals to measure progress toward Transformation

These are the domains that we determined were critical for this client’s ($70bn – F65) Transformation and below them are some (can’t put everything out in public 😊) of the specific dimensions that we used. We then led the team through a series of workshops to help them develop a plan to get better at each of those dimensions AND concurrently established the entire Leadership team’s accountability for the entire Transformation. Within the team they established individual accountabilities for individual pieces of the Transformation.
Would you consider your function’s Leadership Team to be a HPLT? What do they need to be to accomplish their goals? Do they know what they have to do to become a HPLT?

 

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Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
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