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.

I Wish I had a Dollar for Every. . . . .

 genieidea. . .  recommendation that sits on a shelf, suggestion that is not acted upon, training dollar that has no return on investment, report generated that is never looked at, project that is started but never implemented or adopted.  My guess is that each and every person reading this has the same wish.  We participate in studies, surveys, trainings, brainstorming / feedback/ crowdsourcing sessions, and walk away, rolling our eyes because we know that it was a complete waste of time and going nowhere.

An article in Harvard Business Review entitled, “Don’t Ask for New Ideas if You’re Not Ready to Act on Them”  points out that many companies encourage people to contribute new ideas but then have no way to process them on the back end.  We find this to be the case with many, many of our client organizations.  They take the time to engage employees through surveys, contests or brainstorming sessions and then never do anything with the suggestions.  This leaves many employees feeling like their time has been wasted or worse – they are cynical about participating in any future exercises.  The initial intent of “engagement” is great but the lack of planning and follow-through can and will negate any good will that was created.

Now let’s take these examples and apply them to how we operate with our business partners, either internal or external, to examine whether we are guilty of the same behavior.  Have you ever surveyed your “customers” but never followed up with changes, let alone even a summary of the results?  Have you ever requested information or input from your suppliers, but did not take the time to plan what you were going to do with it once it was received.  Every time we do this, we are leaving behind a frustrated partner and one that will hesitate the next time they are presented with a similar request.

So, what do we do about it?  Start with PLANNING – that dreaded process that most people think they can do without, until they realize they can’t.    Before you get started:

  • articulate the problem you are trying to solve or the opportunity you are trying to pursue
  • determine the key questions you need answered to help you solve your problem or pursue your opportunity
  • determine the information you will need  to answer your key questions
  • determine  what you are going to do with the information you gather
  • provide a template to ensure that the information you are getting back can be easily sifted through and analyzed
  • determine how you want to keep your partners informed so they feel that their input was valued and considered (even it does not end up being acted upon)
  • Once you gather input from your partners USE IT

The same process can be applied to other data/information gathering exercises as well.  Let’s take training for example.  Whether you are sending your employees to training or attending a session yourself,  take some time to PLAN what you will do with what you have learnedIf you don’t have a PLAN for utilization, don’t do it.  No utilization = a negative ROI (X amount of cost with no corresponding benefit).  The same can be said for any exercise we go through that does not have a utilization / adoption plan.  In other words . . . . . I Wish I had a Dollar for Every  . . .  because that is the only Value I will see.

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

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Avoiding Pitfalls in Strategy Execution

ExecutionPitfallsVery rarely do I find an article that catches my interest such that I read it and reread it several times to make sure that I capture all the gems.  “Why Strategy Execution Unravels – and What to do About It” from Harvard Business Review is a must read.   According to the article, “a recent survey of more than 400 CEOs found that executional excellence was the number one challenge facing corporate leaders” globally.  In addition, “. . . . two – thirds to three – quarters of large organizations struggle to implement their strategies”. 

The authors uncovered five myths and replace them with approaches that they believe will help managers execute strategy more effectively.

Myth 1:  Execution Equals Alignment

Most of the companies studied did a pretty good job in developing the strategy, translating that into objectives, cascading those objectives down through the organization and then putting in a measurement process and rewarding performance.  These tools help to create alignment but do little to ensure execution.  Studies have found that these tools may be effective in managing vertical performance / commitment but not horizontal (across business units).  Since the execution of most strategic objectives require collaboration from multiple functions or business units, that is where the rubber meets the road.  Structures to coordinate activities across business units is what is really needed to improve execution.

Myth 2:  Execution Means Sticking to the Plan

Most of us have been taught to put a plan or roadmap together and then stick to it.  Executives often “view deviations as a lack of discipline that undercuts execution”.  From a practical standpoint, “stuff” happens during execution – both challenges and opportunities – that organizations need to respond to.  Successful execution requires organizations to be agile (not be confused with the AGILE methodology – which does apply here as well).  Managers need to have the ability to be creative in finding solutions to problems that pop up or unexpected opportunities.  The world does not stand still while we are executing a strategy, so as managers we need to be comfortable adapting to that change.  Also, the willingness to reallocate resources freely as you are executing your strategy is key as well. Whether that is shifting budget dollars or moving people between business units to meet changing demands, this can be a critical success factor in execution.

 Myth 3:  Communication Equals Understanding

Many believe that relentless communicating is a key to success.  Communication is CRITICAL, but messaging needs to be targeted, simple and consistent to ensure understanding.  Once communicated, follow up to see that there is a common understanding of the message you are trying to deliver – this step is often overlooked.

Myth 4:  A Performance Culture Drives Execution

While it has been “found that a focus on performance does shape behavior on a day-to-day basis”, that is simply not enough.  We have already discussed they fact that collaboration is the key to execution so why is it that “past performance is two or three times more likely than a track record of collaboration to be rewarded with a promotion”.  In other words, agility, teamwork, collaboration and flexibility are key competencies that need to be present to drive execution.  “Performance is critical, of course, but if it comes at the expense of coordination, it can undermine execution.” 

Myth 5:  Execution Should be Driven from the Top

Strong top down leadership is important and can be a short term strategy.  Relying on the CEO to drive execution can be a costly mistake and can quickly unravel if the CEO departs.  “Effective execution in a large, complex organization emerges from countless decisions and actions at all levels”.  This is known as distributed leadership.  “Although execution should be driven from the middle, it needs to be guided from the top”.  Distributed leaders not senior execs represent “management” to most employees and have the best chance of driving execution.

In summary, companies spend millions of dollars every year to develop a strategy and fall short when it comes to execution.  Instead of throwing more process and tools at the problem it might be time to take a step and back and look at some of the root causes of the problems.  At the end of the day, execution is all about people and how they define it.  Reframing execution as “the ability to seize opportunities aligned with strategy while coordinating with others parts of the organization” will go a long way to helping managers understand where the pitfalls lie.

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

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Can Conflict Lead to Innovation?

innovation

We are often called in by clients to provide Conflict Resolution training.  Since many of our clients are leading large change or transformation efforts it is both predictable and inevitable that conflict will occur AND it will be mostly internal.  When many of us think about conflict a very negative picture comes to mind, one that focuses on polarizing positions and negative consequences which is where conflict resolution training comes in.  But, what if we looked at  ”disagreement” that is associated with conflict, as having positive consequences?  How might that change the way we deal with conflict?  Instead of resolving conflict perhaps we need to think about encouraging, fostering and managing conflict to achieve those positive consequences.

Last week, Harvard Business Review ran an article entitled “The Capabilities Your Organization needs to Sustain Innovation”.  The article highlights a company like Pixar Animation Studios that has been consistently successful and on top of their game for over two decades.  The authors attribute Pixar’s success to their collaborative approach which at its core is all about generating and channeling conflict in order to foster innovation.    Pixar’s cofounder and president noted: “We’re not just making up how to do computer generated movies; we’re making up how to run a company of diverse people who can make something together that no one could make alone.”  The authors also use Thomas Edison has an example of an innovator.  While Edison was clearly an “inventor” he was also a “leader of invention” in that he used many, many people to make his inventions a reality. 

The myth this article dispels is that innovation is probably NOT “purely a solitary act or flash of insight in the mind of one individual” but rather “ . . .  the interactions of people with diverse expertise, experience or points of view.  Flashes of insight may play a role but most often they simply build on and contribute to the collaborative work of others.”

The article points to three capabilities of innovation:

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What I love about this model is that is takes the mystique out of innovation.   If you read the words that are expressed in the model above, it is all about using conflict as a means to innovate.  Creative Abrasion is all about creating conflict to generate new ideas.  Creative Agility takes the ideas generated in the Creative Abrasion and tries them out through quick execution and adjustment along the way.  You can think of this as using the AGILE methodology to create new solutions.  This can be a very powerful way of moving innovation forward, although not necessarily universally accepted – see this article recently published in Forbes “More On Why Managers Hate Agile”.  A critical element of AGILE is being comfortable that you don’t need all the answers up front and trying new ideas that may fail is OK.  This requires an environment that supports experimentation and uses failure as a learning opportunity.  Lastly, Creative Resolution is where multiple options are blended together to equal more than the sum of the parts.  This requires keeping multiple options on the table even when they may seem mutually exclusive or incompatible.  Collaboration is critical here and requires being open to trying new things and thinking outside the box.

These capabilities sound easy BUT what is the secret sauce?  I would suggest that it is leadership.  Having the staying power to keep trying new things over and over again (knowing that you will fail at times) is tough.  It requires a strong leader to create the conditions to seek out conflict and use it creatively.  Have no doubt it is hard work, which is why many companies choose not to innovate.   

What can we all take away from this?  The message here is that conflict, especially generated within your cross-functional team, can be a good thing.  Whether you realize it or not disagreement can unleash new ideas. So if you think that conflict needs to be “resolved”, you need to start thinking about “managing” it to drive innovation.

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

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No RSVP = Supply Chain Chaos

why-you-no-rsvpAre you one of those people that never RSVPs?  Even when it can be as easy as the click of a button these days?  Have you ever thought about the potential consequences of not sending in a reply, particularly if you do show up?   A recent article in the Wall Street Journal entitled : “Nobody RSVPs Anymore”  illustrated some very dramatic examples of the problems bad manners can yield.   For me this article was very timely because it came out two days before I hosted a holiday open house where less than 50% of the people responded.  My husband thought I was crazy when I insisted that we have enough food and drink for twice the number of respondents BUT I was right and he was wrong (not the first time :-D ).  Sure enough almost all the invitees showed up even though most of them did not respond.

Now, you may be wondering what this has to do with Supply Chain – EVERYTHING.   Demand planning is a critical element in a Supply Chain and knowing how many people will need to be “supplied” with food and drink is critical information for the supplier (me).  Inaccurate information or none at all can result in way too much inventory (perishable food in this case) or not enough inventory (my WORST nightmare).  In my scenario, I had a risk mitigation plan in place (bought more food) because I felt having too much food was less costly to me than running out (resulting in dissatisfied guests – especially those that were kind enough to reply).  In the case of a hosted, home party, it does not cost the invitee anything whether they RSVP or not (other than perhaps being taken off the list for future events).  But, when you think about a buyer / supplier relationship the risk associated with No RSVP (demand planning) will be transferred to the buyer through a higher price.  Those are real consequences and can add up to real dollars.

In general, many organizations do a poor job in demand planning or if they do it, it is not always shared with the supplier.  Why not?  If, as a supply chain organization we can make it easier for the supplier to serve us, why don’t we do it?  In the article noted above, many people do not RSVP because they want to maintain maximum flexibility.  In other words they want to be able to “decide that morning if they want to go out that night” – as a hostess that is maddening.    As a supplier, those buying organizations that provide the courtesy of a reply (demand forecasts) will reap the benefits.  I am also a supplier (beyond hosting parties) and my consulting clients that can provide me with predictable demand can expect my best resources and best pricing.  The greater the commitment, the stronger the relationship,  which has even greater benefits.    

 If you believe that not providing your suppliers with demand forecasts when you can is a good strategy think again; particularly if you are buying goods or services that are critical to your business.   If you have ever played the Beer Game you will remember that the most valuable asset up and down the supply chain is information.   Keep in mind that your suppliers may also have suppliers that they rely upon to provide you goods and services – your demand information will be critical for them as well.

The next time you receive an invitation, think about the “supply chain” implications and just RSVP.  The same goes for your supplier relationships, the favor of a reply can pay huge dividends in more ways than one.

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

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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:

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Here is an example of a simple RACI chart:  

raciblog2

 

 

 

 

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.  

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