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.

Could a Stakeholder Analysis have Saved the World Cup?

Fifa-World-Cup-2014Perhaps this question is a bit premature considering the World Cup is just getting underway in Brazil.  Every indication, if you believe the daily press, is that the event is a disaster in the making.  In this article “As Brazil Barrels Toward World Cup, Brazilians Aren’t Feeling It”  there appears to be one stakeholder that is clearly dissatisfied – the people of Brazil.

What could have been done differently to avoid this issue?  If you think about agreeing to be the host country of any major event, i.e. the World Cup, the Olympics (oops – Rio has signed up for 2016 as well) it requires a MAJOR transformation.  Any major transformation will need a significant amount of change management to be successful, which starts with understanding the needs and value drivers of your stakeholders. 

Riots in the streets, numerous protests, labor strikes, etc. do not sound like the people of Brazil were identified as an important stakeholder in the Transformation.  Here is the definition of a stakeholder:

Any group or individual who can affect or be affected by the change or the transformation and/or has a personal interest.

Why is a Stakeholder Analysis so important?  Here are a few thoughts:

  • Allows you to categorize stakeholders
    • those who will drive the change
    • those who will make the change happen
    • those who will be targets of the change
  •  Helps you understand the current level of commitment / support / resistance by individual stakeholder groups
  • Allows you to build the required  level of commitment by individual stakeholder groups
  • Will be the foundation for your selling / communication plan

If you take the time (it does not take long) to do a Stakeholder Analysis, it can go a long way to identifying critical needs and issues up front so that you can deal with them early.  The issues must be dealt with, so it comes down to “pay me now or pay me later”.  If you choose the latter, it will most certainly cost you more time, effort, money, credibility and maybe even an election.  “So far, the Brazilian government has taken the brunt of the blame. President Dilma Rousseff’s ratings have been going down. The stakes for her are particularly high: There are elections in Brazil in October, so there is a sense that if things don’t go well, the electorate could punish the incumbent. “All the issues that Brazil is facing with their people must be the exact same issues any country would face or has faced in the same situation.  So, common sense would tell you that these issues have two characteristics – they are predictable (we can forsee them happening) and they are inevitable (we know for certain they will happen).  I would like to believe that some research and planning was done up front to identify approaches and lessons learned from others who had done this in the past and were successful. Obviously that feedback had not been incorporated into the plan. 

One mistake that is often made is only focusing on the most “influential” stakeholders and forgetting those in the trenches that have a significant impact on your success or failure.  We see this quite a bit in organizations where executives are carefully attended to and the rest of the organization is forgotten.  That approach only works if the executives can make the change happen without the involvement or cooperation of anyone else. If that is not the case, then the approach is doomed from the start.

For Brazil, the World Cup and President Rousseff it is too late to pay up now.  Let’s see if they learn their own lesson and are better prepared for the 2016 Olympics.  A Stakeholder Analysis might be their ticket to success.

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

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Why Maturity Matters . . . . . .

maturitysmallJust about every functional organization (e.g. IT, HR, Finance, Procurement, Legal, Marketing, etc.) can be measured against a maturity model.  The use of a maturity model allows an organization to have its processes and practices assessed against a set of external benchmarks, best practices or even next practices. Maturity is indicated by evaluating an organization across a number of domains and across a number of “maturity levels”. 

Here is a sample of a Procurement / Strategic Sourcing Maturity Model:

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The idea behind this model is to understand where you are today so that you can start moving your organization to the right.  Why should this be of interest to you or your organization?  Why do you care where you are today as long as you know where you are going?  Here is why!  Maturity MATTERS!  Where you are today does determine the time, effort, resources and change required to get to that “Best Practice” / Value Creating level. By the way, as you start to get close as an organization, that Value Creating level will evolve as well.  There are lots of consultants (present company excluded) trying to sell the latest “best practice” – years ago it was Procurement, then Strategic Sourcing, now it is Category Management.  Many of them (the consultants) sell the Value Creating level to executives without explaining what it takes to get there.  They also neglect to point out that you can’t move from Level 1 to Level 5 without reaching the levels in between and each level requires an investment.

As an organization, as you start to move to the right, it is not as simple as swapping out people, process and technology.  The “context” under which a Value Creating organization works as compared to a Basic Sourcing organization is vastly different and requires changing more than just the Procurement/Sourcing organization itself.  It requires the entire organization to think differently about the Purchasing function and this is a monumental change. For those of you who are about to make the journey, it requires the following:

creating valuesmall

Educate is required for both the Purchasing organization and the rest of the company. If you are starting at Level 2, the education process for Purchasing can be akin to teaching a basketball team how to play football.  Moving to the right will require a very different skill set and therefore the people that you have today (playing basketball) may not be capable of or even want to play football.  In other words, the “educate” process even within Purchasing could be significant.  Then the rest of the organization needs to be educated on the change as well.  ating Align may be the hardest part of the journey but also the most important.  Getting everyone (the whole organization) to agree on where Purchasing is going and how to get there is no small task.  Everyone needs to understand that the change will require new roles, decision making processes, skills, organization and governance structures, etc. and needs to be on board and supportive of the change.  Only after educate and align are complete, should you Execute Unfortunately many companies do not have the patience to wait, so they jump to execution and it is a disaster OR they try to skip from Level 2 to Level 5 and it is also a disaster.  By the way, throwing more money or resource into the mix may help accelerate the journey but only marginally.  Moving from one level to the next requires you to go thru educate, align, execute, evolve again but it does get easierJ!

Where you start does matter – so know what your level of maturity is before you begin the journey.  While Level 5 should be your long term vision (remember by the time you get there it will have evolved) moving up the maturity curve in general can yield significant benefits.

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

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The Commencement Speech Every Leader Needs to Hear

gradOver the last few years, I have sat through my fair share of commencement speeches.  From my perspective they were inspiring – filled with stories and examples of the importance of a college education and how hard work and perseverance will someday pay off.  Those speeches painted a “picture” of what every graduate imagined life would be like after graduation except that the “picture” isn’t even close to the reality they face.  

Their reality is:

  • a high student debt load that, in the last year alone, has grown by 10%;
  • a 12% unemployment rate for new graduates; and
  • a workforce where a generation of managers have already formed a negative opinion of their commitment, work ethic, and tendency to ask questions and seek feedback.

An article I read in HBR, The Commencement Speech Parents Need to Hear  gave me pause and made me realize that maybe we, as leaders, need to face a little of our own reality.  The “kids” we will be hiring; those we need to hire quickly as baby boomers start retiring in droves, may be our own kids (or at least raised the same way).  If we want these “kids” and our own to succeed in the workplace then perhaps it’s time to be on the receiving end of the advice. After all, our kids have been urged to speak up throughout their lives, but never has it been so important for other generations to listen. “Before the 2014 graduates embark on their collective journey into workplaces still struggling to adapt to changing demographics, senior generations would benefit by heeding advice from the Millennials’ perspective.”

What I found most interesting was the concept of looking at new hires as I would my own children – accepting and embracing all the values I had given them.  WOW! 

The commencement speech which I would recommend for leaders would be written by Millennials (hereafter referred to as “kids”), and directed primarily to one particular group in the audience: “the parents who raised them at home but cannot understand them at work.  And that speech would likely go something like this:”

“Parents, as you come here to celebrate your child’s graduation milestone, remember that the young person whose accomplishments you celebrate will soon be in the workplace – which also means that the “kids” raised by those who surround you will be in yours. Remember that each time you form a stereotype or paint the entire generation with an unnecessarily broad brush. And in that spirit, consider these six principles as guidance in your interactions with young people at work.”

1.  Think of each new hire as a future leader, set aside preconceived notions and, instead, pay attention to what truly will motivate young employees.

2.  “Recognize that the “entitled” label you tend to attach to “kids” is not entitlement at all, but rather the self-confidence and self-respect that you have instilled in them since birth. You raised your children to believe in themselves and to believe in their future success. Embrace this generations’ confidence as a building block of future leadership.

3. “Workplace navigation skills are critical to career success and advancement, but do not assume that all young workers arrive adept at steering their way forward. But if you are willing to invest in the process of meaningfully integrating young employees into the culture of your workplace, you will maximize the likelihood of optimal performance.”

4.  Replace clout with mutual respect. An open exchange of ideas invariably leads to a better result and a more engaged workforce.

5.  Pay greater attention to workplace dynamics, particularly around technology. Formalized reverse mentoring programs can help “kids” develop stronger relationships with their more senior colleagues, which has the added benefit of making older workers more technologically proficient.

6.  “Kids” value work-life flexibility and its availability leads to workplace loyalty and engagement.

I hate to say this but we may need our “kids” more than they need us.  We need them to fulfill our dreams for their future but we also need them in the workplace.  The number of future retirees is staggering and we will have no choice but to welcome them into our offices.  Our future, their future and our economy, depends on it.

 

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It’s Time for a Little Spring Cleaning ….

Spring CleaningSpring!  What Spring !@#$%^&*)  I’m working in my Chicago office and it is 46 degrees outside AND it is May 1st !  On a more serious note, this is my favorite time of year, BUT it normally starts at the end of March :-D !  For me, Spring represents a time of new beginnings and a time to reflect on the year ahead – especially for my wardrobe!  I know this sounds crazy but I love to put away all my winter clothes and rediscover what I packed away several months ago.  My first instinct is to run out and buy a new wardrobe but I know that I have “investments” that I made in the past that I need to utilize.  If I don’t,   my ROI on those “investments” go way down as does my value conversion ratio (utilization rate).  So, while shopping is really fun (for me) I always start by “shopping my closet”

If this sounds familiar, I am glad because that means you actually read what I wrote about a year ago.  But as I visit my clients, I realize that this concept is worth repeating – not about your wardrobe but about the “investments” (people, process, tolls, technology, etc.) you make every day within your business. Would you be surprised to learn that introducing anything new (innovation) usually results in a utilization rate of less than 10%.  What this means is that, in theory, about 90% of your “investments” are underutilized.  Even if you find this statistic impossible to believe, cut it by 2/3 and it is still a big number.  What we have a tendency to do, when we get our new budget, is to add new “investments” before looking at the ones we already have.  I get it!  It is always more fun to buy new than to try to utilize / recycle what we already have BUT every time we do that the ROI and utilization rate of our current “investments” go down.

So here is my Springtime advice . . . .  start your Spring cleaning by “shopping your closet”.  Here is a Spring cleaning checklist for you to consider:

People 

  1. Do you have the right people, with the right skills, at the right level, doing the right work?
  2. Do you have an organization structure in place that supports the way you want to get the work done? For example, if collaboration is important, does your structure support that goal?
  3. Do you have an on-boarding process in place to ensure that new employees can be immediately effective?
  4. Do you have the right leaders in place?
  5. Have you provided new leaders with the skills to lead as opposed to do?
  6. Do you have a current competency model and training curricula in place to support the intellectual growth of your people and the value that you can provide the organization?
  7. If you are providing training, has it elevated the organizational competency of your group?  Is there an adoption bridge in place to ensure that the new competencies are being utilized?

Process / Tools

  1. If you can’t remember the last time you looked at your business processes and tools, it is probably time to look at them
  2. If you have recently redesigned, updated or streamlined your processes and tools are you using them?
  3. Do your current business processes reflect the maturity of your organization (e.g. Purchasing to Strategic Sourcing to Category Management, etc.)?’
  4. Have you reviewed your processes under the context of the value they are creating for the business?  Can you articulate the business problem being solved or the opportunity being pursued?  In other words, what value is being created? Are there any processes that can be eliminated / improved with technology?

 Technology

  1.  Prior to buying a new technology solution, have you verified that the underlying process is worth automating?
  2. Can you increase the current utilization rate of your existing technology?
  3.  Is there an opportunity to retire old legacy systems with more updated technology that you already OWN?

I could go on and on . . . . .and I may already have :-D !  We are all asked to do more with less and a little Spring cleaning can go a long way to ensuring that your future “investments” are complimenting, not diluting your current ones.  Before you go out and shop –  “shop your closet”.

 

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Supply Chain Management and the 57 – cent part . . . .

brokenchainMaterials managers, buyers, transportation coordinators, category managers, product engineers, suppliers, quality controllers, etc. all make up this mysterious world of Supply Chain.  If you look at that list and think that one role is more important or more critical than another, then think again.  Would it surprise you to learn that a 57 – cent part may have been the cause of GM’s recall crisis?  According to a recent article – The 57-cent part at the center of GM’s recall crisis, a 57-cent part inside the ignition switch was redesigned in 2006, but the part number was never changed.  It is standard practice, by the way,  for the manufacturer to change the part number any time a part is redesigned.  “The fact that the part number wasn’t changed prevented federal safety investigators, and even some GM employees, from figuring out what caused the accidents.  Accidents declined in newer vehicle models, but investigators could not figure out why, since there didn’t appear to be any change in how they were manufactured.”   Some are suggesting that the lack of a new part number is a sign of a deliberate cover – up, while others are suggesting that this is criminal deception . . .   Maybe BUT maybe not!

I must admit that I was not surprised nor did I immediately jump to the conclusion that this was a deliberate cover-up or criminal deception.  What I did think was that here is yet another example of the critical role Supply Chain plays within an organization.  Here is an illustration of a typical Supply Chain model:

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If this model looks complex, my assumption is that GM’s model is even more so.  It is that complexity and the numerous handoffs (between many, many different people, departments, geographies, etc.) that leave any organization vulnerable to errors.  In addition, many (maybe even most) of the players don’t understand what a Supply Chain is, how it works, or their role within it.  Ask an engineer,  and I have, within a typical manufacturing company what his/ her role is within the Supply Chain and more than likely you will hear that they are NOT part of the Supply Chain.  I am only using engineering as an example but there are many other players that would provide the same response. On the flip side, a materials manager may readily identify himself as a member of the Supply Chain but probably does not realize how his role impacts the entire system.  The 57 – cent part debacle may be as simple as someone forgetting to change a part number (by the way, my assumption is that GM has hundreds of thousands of part numbers and hundreds of changes per day) and the rest is now in the press everyday.

What does this teach us about a Supply Chain and Supply Chain Management?  Here are a few thoughts:

  • A Supply Chain is just that, a chain.  When one link is broken it will dismantle the entire chain
  • Every link needs to know how it fits into the overall Supply Chain
  • Your Supply Chain is only as strong as your weakest link – therefore every link counts
  • If you can’t get the everyday stuff right, the rest doesn’t matter 
  • Most professionals have no clue what a Supply Chain is, let alone what it does or the Value  it can provide
  • Supply Chain management should be a core competency for any organization that is providing goods or services (yes, even service organizations have Supply Chains)

By the way, GM like many other large, global organizations probably has more policies, processes, technology and tools than most within their Supply Chain.  The real question is whether or not those resources have been fully adopted within the organization. It is very possible that the 57-cent error was not seen as a big deal but ask the families of those that died what they think. Let’s not underestimate the value that the Supply Chain can bring and also the tremendous responsibility IT has. But first we need to define IT, communicate IT, embrace IT and manage IT.  

Join in the conversation and let us know what you think  . . . . . .

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