About Anne Kohler

Anne is the COO and Founding Partner of The Mpower Group. She has been leading consulting and financial management organizations for over 25 years, and has extensive expertise in strategic sourcing, change management and organizational design, supply chain management, ERP, and process reengineering.

And the Decision Goes To . . . .

decisionBlogPreparing a spend analysis, doing supply market research, determining your sourcing strategy, developing / executing  a negotiation strategy, writing a contract, putting a new supplier place – these are the basic steps associated with Strategic Sourcing.  These steps can be found in any standard sourcing process whether it has five, six or nine steps – they are all the same.  Procurement groups that are striving to be more strategic or “transform” from a more tactical organization believe that having that process and discipline in place is the silver bullet to making magic happen – millions upon millions of dollars in savings.  If only it were that simple :-) !

For many years, more than I care to count, we have been talking about the REAL challenges in trying to move from tactical buying to more strategic.  While all the activities I have noted above are important, they are the easy part.  The difficulty comes when we try to coordinate our buying practices (creating leverage) within our own organization and need decisions to get made across the organization (across multiple business units) vs. within a single business unit (which is within the normal course of business).  Another challenge area is getting our internal business partners to relinquish ANY of their decision making power when it comes to buying “what” they want and from “who”.   A big concern is having Procurement making those buying decisions for them.

I sat through a client stakeholder meeting this morning where the Procurement organization was presenting their business case for “studying” professional services spend to their business units.  It is a large spend area that is bought independently within each business unit today and may represent a huge opportunity for synergies (cost being just one element).  This was the first time the three business units came together to even talk about this spend area and I was obvious that organizational lines were drawn.  The sourcing team presented the objective of the “study” along with a RACI chart that laid out all the key decision that would need to be made throughout the study and defined the decision makers – giving the most important decisions to the stakeholder team (senior reps from all the business units.  As an observer, it was interesting to watch the dynamics in the room.  As soon as it was spelled out that Procurement was NOT the decision maker (just the facilitator of the process – no small task :-) ) and that all the Business units would participate and have a voice in the “important” decisions, everyone relaxed. If you are not familiar with a RACI chart, it is a simple, very powerful tool for decision making – laying out key decisions and assigning decision making roles to either individuals or groups (e.g. a steering committee). The roles are as follows:





Here is an example of a simple RACI chart:  






What you will notice is that this tool is VERY simple, easy to complete but delivers a very powerful message.  If I am part of the Cross Business Line Steering Committee and see that I have the “A” on the two most important decisions in the process, then I can relax.  Setting up the Cross Business Line Steering Committee is a great way to cajole disparate Business Units into working together to get decisions made for the overall organization.  By the way, there may be committees like that already in place within your organization that you can tap into – it makes life a whole lot easier. Remember that the greatest challenges in most Sourcing organizations are internal . . And the decision  goes to . . . . .

Let us know what you think and join in the conversation.  

Did you like this? Share it:

Why Adoption Fails….

A piece of a puzzle

It is hard, it can be painful and most companies give up too soon.    I have a challenge for any organization that has brought consultants in over the last ten years?  Or five years?  Are you still using (or did you ever use) the solutions they provided to you?  Did you ensure that the recommendations that you paid millions of dollars for were not only implemented but ADOPTED?  I suspect it would make you sick to discover how much Value walked out the door with the consultants simply because there was no process or DISCIPLINE in place to ensure the VALUE was captured and sustained.

We tell clients everyday NOT to bother building new processes or tools or providing training unless you have a strategy in place, up front, to ensure Adoption.  Now, you may ask, how do you do this?  How do you ensure that adoption takes place:

  • Leadership commitment
  • Selling the Value
  • Time
  • Effort
  • Investment
  • Staying the Course

Leadership commitment means up and down the ranks and at the highest levels of the organization.  Everyone needs to be aligned, which is no small task.   Even where you think there may be alignment – test it!  Words are easy, actions are not.  Sometimes leaders want to help but they don’t know what you need them to do – tell them!

Selling the Value to everyone that is impacted – without this you will not achieve adoption.  I know for me personally if I do not see the benefit, I will not adopt something new – it simply is not worth my time or attention.  Selling needs to be part of adoption plan and must be tailored at an individual level to ensure that you are hitting the right Value drivers.  If you can convince someone of “what’s in it for them” you have a better chance of adoption.

Time is where adoption most often breaks down.  Most organizations are impatient.  They want the results NOW and think that if they throw enough money at a problem or opportunity it will happen faster – maybe, maybe not.  You can’t move from transactional to strategic overnight no matter how many resources you throw at it or how much money you spend.   It takes time for an organization to absorb change particularly if it requires bumping up against the current culture.  Be prepared for a journey – not an event.

Effort especially estimating the effort to ensure adoption, is almost ALWAYS underestimated.  Whatever amount of effort you thing a change is going to require, triple it, and you may still be way off.

Investment   in money and resources is a given.  Where you believe the payoff is big, calculate the ROI and then sell it.  Failing to do that, will leave you holding the bag from a resource perspective and you will be hard pressed to make adoption happen.  Not ensuring you have the appropriate budget to get to adoption will leave everyone frustrated.  A significant part of your budget (40%?) should be allocated  up front to adoption activities.

Staying the Course is easy to say but hard to do.  If you understand up front that getting to adoption will take time then remind yourself and your organization of that every time you start to think about abandoning ship.    Remember that any investment or change that is NOT adopted by the organization is a wasted effort.

If what you read above makes sense – think change management.  Engaging stakeholders and leaders, getting commitment, selling the value through communication, etc. are all part of a change management toolkit that can be applied to any change (any project) and really does work.   So when you think about why Adoption fails recognize that it is most likely because there was not enough time, attention or investment in managing the change  . . .. . .

Let us know what you think and join in the conversation . . . . . . .

Did you like this? Share it:

Too Many Suppliers . . . Keep Looking!

connectedMost of us can look at anything we “buy” on behalf of our company and see that we have opportunity for improvement.  We may have too many suppliers, not enough suppliers or not the “right” suppliers.  Whatever the situation, as Sourcing professionals it is our job to ensure that we have the best set of suppliers that provide the most value to our business partners.

I recently read an article published in HBR from Michael Porter (remember Porters Five Forces Model) & James Heppelmann entitled “How Smart, Connected Products Are Transforming Competition”.   The article explores the introduction of smart, connected products as a game changer that is “ushering in a new era of competition”.  The article points out that information technology is revolutionizing products” (no surprise here) but the real point is the pace of change is such that we need to constantly keep a pulse on our supply markets to ensure that we understand how industry competition is being reshaped.  If our role is to ensure we have the best set of suppliers for our business then we must be on top of changes in our supply markets.

Periodic reviews of your supply markets are critical.  Here are the key questions you should be trying to answer as part of your supply market analysis:

  • What are the economics of the supply industry, i.e., what drives the market?
  • How important is brand value in our category?
  • What are the main quality issues?
  • How global is the supply industry (present and future)?
    1. Threat of foreign competition
    2. Degree of political and currency risk
  • What is the technological complexity of the goods/services?
    1. Proprietary nature
    2. Ease of duplication
    3. Product life cycle
  • What are the primary value-added activities associated with the category?

Opportunities to change the paradigm

  • What are the critical success factors in the supply market?
  • Can industry leaders sustain their advantage over the long-term?
  • Do any markets for similar goods/services (or substitutes) represent a potential competitive threat to this one?

One way to keep on top of the competitive landscape within the supply market is to use Porters Five Forces Model.  Here are the elements of Porter’s model: 

  • Bargaining Power of Customer (Buyers) – Competition is high when buyers (as a group) have many choices of whom to buy from or when there are few buyers in the market.
  •  Bargaining  Power of Suppliers  – Competition is high when suppliers can exert influence on the market,  i.e., on your suppliers 
  • Threat of Substitute Products or Services – Competition is high if there are current or potential alternatives to using the product or service.
  •  Threat of New Entrants – Competition is high when it is easy for new players to enter the market.
  •  Intensity of Rivalry Among Existing Competitors – Competition is high when the industry has many players, there is little differentiation between products, or there is a history of aggressive marketing.

The article referenced above has Porter applying his five forces to the Smart, Connected Products industry.  It is a great, current example (right from the Horses’ mouth) and illustrates the type of analysis we should be doing as a profession to keep on top of our game.  As illustrated, the pace of technology is shifting markets soooo rapidly, it is hard to keep up.  Understanding the shifts in our supply markets and sharing that insight with our internal business partners will help us be able to add value beyond “cost cutting”.  It will also help us to continuously review whether we have too many suppliers, not enough suppliers or not the “right” suppliers.

 Let us know what you think and join in the conversation . . . . . . . . 


Did you like this? Share it:

Hire a Sales Person – Not a Lawyer

saleswomanI came across an article in Crain’s Chicago Business entitled  “Why law firms are turning to non-lawyers for sales help”  where they talk about law firms hiring sales/marketing professionals to develop business.  In a profession where advertising was once banned, this is considered a radical move.  According to the article “law firms are reacting to customers who have learned how to strip out components of legal work and value them accordingly, an unbundling of services that echoes what hit the computer industry decades ago” and “what’s happened is that the buyers have become smarter than the lawyers.”  Score one for Strategic Sourcing.
But law firms are fighting back.  Many have moved toward hiring business development professionals to sell their services while others have provided sales training to their lawyers.  Some firms are experiencing up to a 60% increase in client requests for proposals where that same work was automatically awarded in the past.  The economy and competition has forced law firms to think more like a business.  But getting a lawyer to think like a sales person is not without its challenges. Many feel that they didn’t go to law school to become a sales person.    “Traditionally, lawyers believed their knowledge and expertise spoke for itself, and it would be a sign of defeat to start marketing.” 
Another role has emerged as law firms fight against Strategic Sourcing – Pricing Director.  Two years ago there were only a few such roles and now there are over 300 across the industry.  The upsurge has been caused by pressure from clients.  Clients have adopted more savvy purchasing practices and law firms have been forced to react.  In 2013, two thirds of law firm revenue involved flat rates and other “alternative fee arrangements” such are pre-negotiated discounts to billable hours.”  The days of open ended agreements and highly paid lawyers billing for work that could be done by paralegals may be over.  Some law firms are starting to be more judicious (no pun intended :-D ) in pushing lower value added work down to paralegals, contract attorneys, document processors or to low cost countries (e.g. legal research in India) as a reaction to the market.
This shift has not happened without a great deal of pain. The long standing culture within many law firms can be a tough nut to crack. Business development professionals entering these firms, name decision making as the number one biggest issue they face.   Partners see the change as optional and need to be convinced that the shift is necessary.  In addition, sales cycles for professional services firms can take two years or longer which can be frustrating for both the sales person and the firm.  Like any change, it takes time and expectations need to be managed along the way to be successful.  
So what does this shift mean for Sourcing professionals?  Where legal services were once a sacred cow for strategic sourcing – that is changing.  Use this as a call to action to at least consider legal services as an opportunity.  This does not mean you need to switch to new outsides law firms but can be a way to add value to your internal legal group by helping them to buy smarter.  If law firms have recognized the market has changed by thinking more like sales people, then it’s time our internal business partners (legal) recognize that change and capitalize on it.
Let us know what you think and join the conversation . . . . . . 
Did you like this? Share it:

Selling the Change – Think Like a Sales Person . . . . . Part II

changesLast week we started exploring “Selling the Change” and approaching it from a sales perspective.  We all recognize that change is hard.   As professionals in a Shared Services environment (Procurement, Supply Chain, Strategic Sourcing) one of our primary roles is that of a change agent as we are trying to play a more strategic role within our organization.  Getting suppliers to work with us under a more strategic context is the easy part.  Getting our own organization (sometimes even our own Procurement people) to do things differently is another story. Building a better process or adding new technology is not how you make change happen.  It must be sold!!!  Without the cooperation and acceptance of your internal business partners, you will never be successful.  So, “Sell the Change” you must.

Here are the Top Ten Critical Selling Principles:

  • Principle #1: Identify your Market Segment (stakeholders)
  • Principle #2: Know how the customer (stakeholder) likes to receive communication
  • Principle #3: Build the Brand
  • Principle #4: Selling the Product
  • Principle #5: Educate your customer (stakeholder)
  • Principle #6: Develop Effective Collateral
  • Principle #7: Establish a Need / “Burning platform”
  • Principle #8: Highlight the Value of Change
  • Principle #9: Anticipate Objections
  • Principle #10: Illustrate what Others have Achieved

Last week we took a closer look at the First 5 Principles.  Now, let’s take a look at the Last 5 Principles:

Principle #6:  Develop Effective Collateral
Under this principle you may have a picture in your head of a sales person whipping out a fancy, slick brochure or folder that points out all of the “features” they are offering.  But effective collateral takes what may be a complex process or thought and makes it simple.  Decide on the key messages you are trying to deliver and make them:

  • Simple but not simplistic
  • Creative as well as analytical
  • Always, Always, answer the question “so what”

Principle #7: Establish a Need / “Burning Platform”
This principle is critical because in order to sell the change you need to find a compelling reason for someone(s) to change.  In many organizations, change may be required simply to survive – “if we don’t make this change, we will go out of business”.  In other cases, the change can be positioned more positively – “this new system will give us a competitive advantage” OR “this leadership program will allow you to be in-line for a promotion”.  Regardless of the reason, this must be presented to your customer (stakeholder) and will be at the foundation of your sales pitch.

 Principle #8:  Highlight the Value of Change
Have you ever heard of WIIFM or What’s In It For Me / Them?  This is also a critical component of your sales presentation.  Understanding what is valued by your customer/ stakeholder (their Value Drivers) is necessary for a “sale”.  You need to sell the benefits to them, which means that your  pitch must be customized to each stakeholder.  In addition, if your solutions are designed based on the value drivers of your customer adoption, will be easier as well.

Principle #9:  Anticipate Objections
This principle is also important.  Take the time up front to anticipate any objections your customer/stakeholder will have and build them into your approach.  For example, here is one of my favorites:


Being prepared to respond to any objections will let the stakeholder know that you took the time to address both their needs and concerns.

Principle #10:   Illustrate What Others Have Achieved

Everyone likes to hear what others have achieved and accomplished.  In addition, stakeholders may not be comfortable being on the leading (bleeding) edge of change.  Providing benchmark information will go a long way to help sell the change.

Well, we have now covered the Top Ten Critical Selling Principles which we applied to “Selling the Change”.   Here are some other tips to consider:

  • Sell to all levels of the organization – not just executives
  • Always pre-sell to executives to make certain you have
    political coverage
  • Involve your non-Sourcing  / Supply Chain team members
    to sell too 
  • Sell early and often
  • There is no such thing as relevant over communication
  • Benefits sell, features don’t
  • Tailor your “pitch”  – different audiences require different messages

 By the way, do you know who should be the first person you hire for any major change initiative?  It should be a sale / marketing professional . . . .think about that :-) !

Let us know what you think and join in the conversation . . . . . .

Did you like this? Share it: