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.

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 . . . . . . . . 

 

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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 . . . . . . 
 
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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:

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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 . . . . . .

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

changeIn my blog a few weeks ago “Culture Eats Strategy . . . . or Does It? ” we talked about the need to either work with, or change, corporate culture in a time of transformation.  In either case, Selling the Change is essential. Whether you are going through a transformation or NOT, change is all around us and we cannot escape it.  The ability to embrace and manage change is THE most critical competency every professional needs to have.  In a Shared Services (e.g. Procurement, Sourcing, Supply Chain, IT, Finance, HR, etc.) environment in particular, we are often called upon to lead our internal business partners through change.  Having the competency, tools and experience in selling that change can be the difference between success and failure.

Here are a few things to consider:

10 Reasons why Change Efforts Fail (The first four tie directly back to Selling the Change):

  1. Lack of a clear vision
  2. “What’s in it for me” is unclear
  3. Senior management wants to help – doesn’t know how
  4. Lack of an ongoing communication process
  5. Decision processes not clearly defined
  6. Failure to deliver early, real results
  7. Everything is high priority
  8. Old performance measures block change
  9. The voice of the customer is absent
  10. Stuck in the status quo or current way of thinking

Why is it important to Sell the Change:

  • Establishes a “burning platform” – creates a sense of urgency
  • Highlights the value of change
  • Addresses  issues / concerns / fears
  • Secures support and alignment
  • Prepares targets / organization on  “what to expect”
  • Allows you to share successes and lessons learned

So why treat selling the change from the perspective of the sales person?  The real question is Why not?  The sales process is easy to understand (that’s easy for me to say :-) !), has stood the test of time and can work for anything you are trying to sell – so why not CHANGE?

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: Sell 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

Let’s take a closer look at the First 5 Principles:

Principle #1: Identify your Market Segment (stakeholders)

This one is simple – you should NEVER start a change initiative unless you have clearly identified your stakeholders and done an analysis to determine if they are a friend or a foe. This will be at the foundation of your selling plan because you need to know WHO you are selling to and what you need to sell.  This is identifying your Market Segment.  A stakeholder analysis tool and management plan must be part of your change management toolkit.

Principle #2: Know how the customer (stakeholder) likes to receive communication

This principle requires that you start to build a relationship with your customer – in this case your stakeholder.  Understanding how your stakeholder feels about the change will be important as you develop your ongoing communication strategy.

Principle #3: Build the Brand

It may sound hokey but branding a change initiative is a way to draw attention to the product (change) and the VALUE the product (change) will deliver.  If you are going to brand – name, logo, packaging, messages MUST all be aligned with the VALUE.

Principle #4: Sell the Product

Selling is a team sport!  Not only should your change agents (e.g. category managers, sourcing leads, supply chain leaders) sell but also you should engage executives, sponsors and supportive business unit personnel to help you sell.  Provide them with the tools they will need to be effective.

Principle #5: Educate your customer (stakeholder)

Customers (stakeholders) who understand what you are selling are more likely to buy.  People can’t support what they can’t understand. The goal is to have “committed” stakeholders, not just blind compliance.  Understanding can win over resistors.  Keep in mind that education is not “training”. Training teaches the HOW – Education teaches the WHY.

I hope I have started to sell you (educate) on why Selling the Change requires you to think and act like a salesperson.  I have run out of time (and word count) so I will finish up next time.

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

 

 

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Another Meeting – Don’t Waste My Time . . .

timeismoney . . . . or that of the 20 other invitees!  Does this sound and feel familiar?  If not, I would like to know where you work because they have cracked the code that seems to have escaped MOST companies / organizations.  Most of our clients are looking for ways to cut out waste.  They go about it by streamlining processes, eliminating work, running LEAN initiatives, etc. all in an effort to move from tactical to strategic and it is a noble effort.  My argument here is NOT that these efforts won’t bear fruit – I am sure they will.  But, there might be an easier, more immediate payback by looking at the amount of time they and their staffs spend in meetings.

By the way, I am not against meetings.  I actually prefer human interaction and live (even if it is virtual) communication / collaboration over text and email (reading thousands of emails can also be a huge time sucker).  The problem lies in the fact that most meetings are a complete waste of time.  People are late, the right people don’t show up, there is no clear objective or agenda and I can go on and on.  This is such an important issue that “Effective Meetings” is a half- day session in The Mpower Group’s Supply Chain University and one of the most highly rated – go figure.   I must admit that when we first offered it as a training session I was embarrassed, since I think most of the concepts are common sense.  But frankly, in business as in life, common sense does not always prevail.

I chuckled when I read an article from Forbes.com and Kotter International (yes, John Kotter, the Change Management guru) “I Want That Hour Back: The Meeting Invitee’s Bill of Rights”.  The article points out that if a company can eliminate meetings that “don’t matter” and employees can focus on those that do, then days, weeks and even months can be reclaimed to get real work done.  While my clients are looking for much more difficult ways to improve efficiency, making meetings more effective can be a painless fix.  By the way, the BEST meeting is the one that does not take place at ALL unless needed.

I have a personal story here that I like to share with my trainees and it is a true story.  About 10 years ago I was on a professional executive board of my business school.  Every member was very senior and had an MBA from this institution.  Every year we had an annual retreat which lasted about eight hours on a Saturday.   It was the responsibility of the board chair to set the agenda and run the meeting.  Here is how this played out:

  • I was handed the agenda as I arrived which had over 25 items on it
  • The only timing in the agenda was the start time and the end time
  • There was no stated objective
  • There was no indication of which items were info share, discussion or decision required
  • We never got off the first agenda item
  • The discussion was disjointed and went off into tangents that had nothing to do with any of the agenda items
  • There were no decisions made
  • There were no action items at the end of the meeting
  • This meeting was facilitated (hardly) by an MBA with 20 MBAs in attendance 

That was 168 hours of executive time that I assume some charitable organization would have loved to take advantage of.  It was a complete waste of everyone’s time.  I resigned from the board soon thereafter.

Here is a simple process that we use and ties nicely into the article’s Bill of Rights:

plandopic

 

PLAN

1. Clearly articulated objectives sent in advance
2. A focused invitee list
3. A well-considered agenda
4. A thoughtfully designed experience
5. Reasonable preparation sent with sufficient time to complete

Please note that ½ of the activities all take place BEFORE the meeting.  This is critical – don’t hold a meeting unless you have the time to PLAN.

DO

6.  Start on time and end early
7.  Ensure everyone is paying attention in the meeting
8.  Key decisions and questions placed up-front
9.  Alert facilitation

 Strong facilitation is key to a successful meeting.  Make sure that you have an energetic and focused facilitator – especially for looong meetings.

 REVIEW

10. Thoughtful, brief and timely notes of discussions, decisions and action

 Take the time to summarize the results and ensure that the objective was met.  Also record the results and get confirmation that all attendees know what the action items are.  

If you are the meeting organizer / facilitator then respect the rights of the attendees and follow these simple steps.  If you are an attendee – JUST SAY NO unless your rights AND time are respected.  Focusing on effective meetings can go a long way to raising your “stock” within your organization so try it. 

Tell us what you think – join in the conversation . . . . .. 

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