About 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.

Don’t Waste Any More Money on Training in 2015

trainingdollarsIt’s more than just a play on words – if you ask any senior leader what they are getting from their training investments, you will get a very frustrated response.  Yet at this time of the year, everyone is trying to figure out where to spend their training dollars.  I have a simple piece of advice – save your money and spend it on something else-unless you know the answers to the following Key Questions.  And if you are an alumnus of Strategic Sourcing/Supply Chain “U”, these will look very familiar…

What competencies do you need to meet your objectives? You would be surprised at how many organizations waste money on training without understanding the causal link between their organizational competencies and their ability to meet their objectives.  Hint:  If most of your training is in negotiating better deals with suppliers you may want to think again.

When will you need those competencies?  Remember that there is a significant lead time involved in developing competencies.  You cannot send someone to a cross cultural orientation class and send them off to India to develop a new supply base there.  So, if you need that Indian supply base in two years, it may be time to started developing those competencies now.

Do you know if you are going to “rent”, “build” or “rent to build” (TMG preferred model)? You must identify your critical competency gaps and have an overall strategy for each of them.  Are you going to hire consultants(rent), are you going to train people and provide them with the infrastructure-tools, processes, templates etc.(build) or are you going to have a hybrid model where your consultants are charged to help you deliver results as well as build internal capability.

Are you focused on just the functional competencies?   A trap that many organizations fall into is to focus on the “technical” or “functional” competencies not realizing that the Strategic (erstwhile soft skills) are actually far more critical and have a much more causal relationship with meeting objectives.

Are you clear that training does not deliver competencies, only Adoption does?  All research points to the fact that unless adults immediately apply (adopt) what they learn, retention drops to zero very quickly.  Additionally, any value to the organization from the new skills only occurs if and when the new skills are applied.  While both those points may seem very obvious, they are almost always missing from most training programs. TMG alumni will remember this as the Adoption Bridge.  Do you have an Adoption plan that will convert training into competencies?

Are you focused on organizational competencies – not just individual?  Many organizations send people off to training as individuals or in small groups and wait for the Organizational competency to rise.  Organizational competency is a factor of many elements – common process and tools, common training in teams, availability of tools, templates etc., an opportunity to share and learn etc, etc..  To impact Organizational competency you need to move towards Communities of Practice.

Have you thought about the other elements of a Competency Based Talent Management strategy?  While it is great that you are investing in competency development, to really maximize your return, you should also be looking at how you recruit, measure, reward, and develop people.

If you are trying to determine what to do with your training dollars this year, you may want to start by asking yourself some of these questions.  You may also want to make sure that your leadership team is also on the same page.  If you would like some help, we have a few very elegant and powerful tools that we would be happy to loan you to help you to get at some of these issues on your own.

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What does the Future Hold- the Science Fiction of the Past? Or, Do you Know what a Dongle is?

aiThis post has nothing to do with supply chain/strategic sourcing – explicitly.  What I do want to share are some data points around technology with you and have you think about what 2015 and beyond looks like.  In the near future, we will post a blog of our annual “walk around” with senior executives to see what they are concerned about and  share some of our current thinking with them.

  • A dongle is a small “appliance” that fits in your hand, is powered by your smart phone and can detect major diseases like syphilis and AIDS and costs $34(sure to go down over time or be subsidized).  The potential impact on mortality rates will be huge.
  • Cars can easily be taken over and controlled by very simple hand held devices – while you are driving.
  • Britain just approved the creation of a human embryo from 3 different parent’s DNA to help eliminate certain diseases.
  • ….also bringing along the fear of “designer babies” that only the very rich can afford.  You may have seen Gattaca where Ethan Hawke buys superior genes to improve his chances for space travel.  There was even a comparison to a “super race” on a comedy show.
  • Virtual golf in your basement puts you in the middle of a very realistic experience and you know what the Wii can do.  Now combine that with something like hololens from Microsoft.  The ability to experience augmented reality in an incredibly real way is here….
  • …which reminds me of a movie from a long time ago – Westworld-that has suck in my memory.  Yul Brynner is an augmented character in an immersive vacation spot but the augmented reality goes haywire and he gains the ability to actually kill Richard Benjamin (a real person).
  • Drones are now being used for disaster relief management, wildlife management, better crop planning, water management and things that we are only starting to identify…we of course know where the technology came from and it’s original use.
  •  If you have been the subject of any telemarketing recently, chances are that you were being subjected to “cyborg telemarketing” – not talking to a human.  This is not a recorded voicemail that you listen to – you actually may have gone through a 5 minute conversation thinking you were interacting with a human….
  • ….and we all remember what cyborgs are capable of – “I will be back”(Terminator) or even Iron Man with Robert Downey Jr.
  • Driverless cars are going to be at your local dealer soon or available to taxi you back and forth (Uber, Google etc.) thus reducing accidents and traffic jams.
  • Employees in Sweden are now being inserted with chips so that they don’t have to swipe ID cards – apparently a major convenience.
  • The predictive power of big data is immense and still being developed and the benefits are only now starting to trickle in…
  • …and it’s also being used to identify potential trouble makers long before they have ever done anything or even thought about doing anything.  Did you see Tom Cruise in The Minority Report?

The confluence of all these technologies is definitely happening and it’s happening at a far more rapid rate than any of us may be aware of.  Bill Gates, Elon Musk, Stephen Hawkings and many others have been sounding the alarm, “AI  is a potential menace to humankind with super-intelligent machines that could run amok”.  A lot of science fiction may magically have supernatural predictive powers or they help shape the imagination of the imaginers who go on to imagine scientific and technological advances.  Some things to ponder about as the new year starts – some food for thought if you will, things to contemplate and muse about as you are sipping a libation or even to get into a heated discussion with someone.

 

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Adoption of Innovation: 3rd World Ahead of Advanced Economies?

mobileatmWhen the Gates foundation decides to attack a problem, you know it’s a serious problem with significant impact and they are going to commit some serious resources.  They are currently predicting an unparalleled improvement in the lives of the poorest and one of the key enablers of that is mobile banking .  While we still carry cash/credit cards, Africa, Asia and others have already been using mobile banking.  Apple pay was recently introduced in the advanced countries and continues to struggle while 2/3 of Kenya is already using mobile banking – a phenomenon called “leapfrogging” -large parts of the world will never know credit cards or physical banks and are going directly to mobile banking.

Safaricom (the leading telecom in Kenya) derives 18% of their revenue from banking (more than SMS/data combined) thus developing a new business model for telecoms.  They have human ATMs (81,000) or agents who act as local “banks”(what the Knights Templars used to do)-thus leading to more ATMs/capita there than in the US!! This also makes banking available where there is no electricity yet and phones are solar powered.

According to the Gates foundation, 2 billion people will have access to banking services which will fundamentally change their lives.  While only 10% of Tanzania have bank accounts, 67% have mobile phones resulting in the “leapfrog” effect.  While this clearly has an impact on the cost of banking services and access to micro loans and employment for the human ATMs, it also fundamentally changes social behaviors.  Savings may have been an alien concept when your wealth was stored in goods (cattle) or currency was hidden under the mattress but not anymore.  This allows them to deal with normal life downturns (bad crops), health emergencies, education etc. on their own with their savings and stay away from the predatory money lenders or indentured servitude to pay off loans.  Generations of a family have suffered because of loans that keep increasing the principal as bad crops continue.

 Bill Gates also theorizes that a number of innovations coming from these 3rd world initiatives will actually “trickle up” to consumers in the advanced countries and may threaten the banking industry at some time.  This will also open up these geographies as potential markets because there is a reliable payment system in place.

This is but another lesson that innovation provides little value unless it’s adopted. And while the phones being used in these countries are very basic with b/w screens etc., their huge adoption rate makes the realized value of the innovation humongous.  The lower adoption rate in the advanced countries makes the realized value significantly less.  Looking for innovation in all the expected places(advanced countries) may actually make us miss a lot of innovation taking place in the 3rd world.

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Do Lower Gas Prices Cause More Deaths – 9,000 of them?

gas1I’m sure you’ve been enjoying the lower gas prices.  Where the credit card would max out at $100 without filling my tank, it now costs around $60 for a tankful!  However, there are many un-intended consequences to this windfall.  This is a huge economic impact in less than a year – annually in the US alone, it means $14 Billion in the consumers pocket.  While that sounds like a great economic boon, if consumers use that money to pay down debt and not use it towards consumption, it can actually cause dis-inflation or deflation.

Transportation tax revenues which are a % of the price of gas have taken a huge toll and government transportation budgets will suffer.  Economies which are totally dependent on oil revenues are in turmoil which could lead to significant social and political upheaval (Russia, Latin America etc.).  Sales of SUVs (higher) and energy efficient cars (lower) have already seen a shift.  Other economic sectors are already feeling the impact (steel industry announced layoffs) because of lower demand for exploration.  Fracking for natural gas is becoming less and less attractive economically as an alternative.  The Keystone pipeline is facing the same issue as it is no longer commercially viable.

The one thing I’ve never understood is how prices can vary so much at different gas stations.  I was just passing a major intersection with 3 gas stations at the corners (Shell, BP and Mobil) and one of them was 10¢ higher than the lowest and the other was 20¢ higher – at the same intersection!  Surprisingly, there were more customers in the two highest priced gas stations, a phenomena that defies all logic.  You would think people would drive across the street for a $4 difference per tank?  What would you do – especially since all three are brand names?

Shankar Vedantam recently had a story on NPR where he points out that 9,000 more people will die due to the lower gas prices based on a recent study.  There are the obvious factors that people drive more and therefore more accidents cause more deaths.  Interestingly, it’s also tied to how we drive,  as people tend to drive more conservatively (therefore more safely) when gas prices are higher.  The composition of who is driving also changes.  When prices are higher, younger drivers drive less as they cannot afford as much gas and the inverse is true.  And younger drivers are far more risky on the road than older drivers.  More truck traffic because of lower gas prices is surely another contributor.  By the way, the people who tend to drive less in times of higher gas prices are the poorer people so the increase in the number of road fatalities due to higher gas prices impacts them the most.

Have the lower gas prices impacted your personal behavior?  I’m assuming that you are reviewing all your supplier contracts where fuel costs are significant cost drivers and  looking for relief – just like you had to agree to surcharges when they were high.  Of course, we are all waiting for airlines to slash ticket prices immediately (don’t hold your breath).  Are you starting to see any impact on your “order book” at all?  Clearly, lower gas prices have both micro and macro impacts but they are a mixed bag.  Such a large transfer of wealth from the producers of oil to the consumers of oil has many un-intended consequences.

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Did you send that RFP to the Government? And why Santa may be late.

amaon boxIf you have ordered something from Amazon and it was delayed, you may have the political gridlock in Washington to blame.  So call your local member of congress and complain loudly.  The U.S. Postal Service (USPS) is part of Amazon’s supply chain ……and it cannot keep up with the demand.  This brings up a number of interesting points to consider in what may be a changing landscape.

Clearly, Amazon found that current delivery systems in the market (e.g. Fedex, UPS) were not enough to meet their Value Drivers(volume, delivery schedule, cost etc .etc.).  USPS has been suffering contraction and their relationship with Amazon  is a great strategy to re-invent themselves (which also now includes acting as a banking system). After all, USPS already has the infrastructure for the proverbial  ”last mile” into your home and most people like their mailman.  Which by the way means that Amazon will have significant influence on the physical “last mile” and they are already into the content development and delivery business in a big way and getting bigger.  This raises the obvious question of how big is too big as far as Amazon is concerned?  You may remember the drone delivery strategy from last year?

Clearly, Amazon and other retailers may have outpaced the capacity of the overall delivery system and is now including the Public Sector in its supply base.  Does that mean that the next time you send out a logistics related RFP, you should include the USPS in it?  Perhaps you do already and if so, does it present a different set of challenges and risks to consider?  Are your negotiation tactics totally different?  In this case, one of the obvious challenges would be the union who is actually quite supportive ” We are in favor of the Amazon delivery business and Sunday parcel delivery — it’s fabulous and we want it to continue”.  The challenge is that USPS is not staffed up to handle the volumes, their temporary workforce strategy is not working and their entire workforce is overworked according to the article.  Year over year volumes are up by 300% and the expectation is that this is a long term increase and not a short term phenomena.  And the long term investment in increasing the USPS infrastructure including the workforce is a political issue which means you must include that as part of your assessment when looking at the USPS. 

Does Amazon look to invest in the USPS like they might with another supplier and is there a model for that?  Should that be of concern? Does that lead to privatization where your mailperson has an Amazon hat on?  When the USPS has to decide between your card to grandma and the Amazon package, which one do they choose?  Already Amazon customers are complaining that they are not getting on time delivery.  How much influence does Amazon have over the USPS?  Wait till that call from grandma! By the way, this is the same discussion happening in the virtual “last mile” issue between the FCC and the industry (net neutrality) – who controls delivery of content into the house.  And content developers are bypassing cable (Netflix, HBO) but that’s for another blog.

amaon boxDealing with the Public Sector as a supplier clearly has its unique challenges and one where public policy and politics enter into the picture.  It may also be the emergence of a new model where public sector institutions who have been under pressure to outsource and privatize are now actually a service provider to the private sector – they have become the Outsource (a totally made up word).  It is also an interesting tipping point (thank you Gladwell) where one of the most dominant disruptors of the old economy (Amazon) is teaming up with one of the oldest institutions of that old economy (USPS) to make sure Santa is on time.  And if he/she is not, then call your congressman and give them &^##.

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