Author Archives: Dalip Raheja

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.

If you ain’t got the right questions…

Posted on by
Reply

 

…You don’t have a snowball’s chance in &^$$ of getting the right answers. I cannot tell you how many times I’ve had this discussion with CEOs and other senior executives. Or, as my friend Pete often says – “The most common source of mistakes in management decisions is the emphasis on finding the right answer, rather than the right question”. Or, as my other buddy Al says – “The formulation of a problem is far more essential than its solution, which may be merely a matter of mathematical or experimental skill”. Those would be Peter Drucker and Albert Einstein.

Asking the right questions is a critical competency that very few people pay attention to or develop. How many times have you been involved in futile number crunching or mind numbing analytical exercises that as soon as you’re done, someone decides that it wasn’t the right analysis and let’s go do another one? Often referred to as the “get me a rock” exercise – where the executive says “go get me a rock” and as soon as you bring in a rock, it’s not the right one and you have to go get another rock.

We often run a team simulation where we give the team all kinds of data and they have to answer a question. If the team took the time to examine the problem and identified the right set of questions, the answer can be had in 2-3 minutes. We’ve had teams take 45 minutes and not even be close – they keep crunching the data and formulating all kinds of analysis and spinning their wheels and validating their wild guesses every 5 minutes and getting more and more frustrated. And the teams that do the worse are the ones with the high achievers, the analytical super horses etc. etc.

We were just at a client meeting where the client was jokingly showing fake exasperation with all the questions we were bringing up and was wondering what value we were bringing since all we did was ask questions and we were getting paid for it. The conversation turned serious when I explained that the first job of any good consultant was to make sure that ALL the RIGHT questions had been asked. Only then should the consultant start working on potential solutions. The client admitted that the questions we had been asking were driving them to do some serious thinking – we were working on their core value creation and delivery process and the questions led them to a strategy to leapfrog their competition.

And there are techniques you can use to improve in this area. An example is The Minto Pyramid and the associated MECE principle. So slow down, stop, and reflect! Make sure you have all the right questions first – otherwise you will be headed on the fast train to nowhere.

Did you like this? Share it:

The Sponsor’s Role In Change

Posted on by
Reply

The sponsor of change is a senior officer, one who holds the organizational power to legitimize the change.  This person knows when the time has come for change and has the confidence and strength to do something about it.  The sponsor goes forth and leads—overcoming obstacles, finding truth, and sharing knowledge.  Significant organizational change will not occur unless those who legitimize or mandate the change demonstrate FULL commitment to the task.  Here is a brief section from a comprehensive white paper:

 Characteristics of Effective Sponsors

  • Dissatisfaction with the Present State

The effective sponsor will be consistently aware that the organization cannot afford to fail at the change because the status quo is too costly. 

  •  Clear Definition of the Change

The sponsor has as clear a picture as possible of the desired state.  A clear vision also focuses and mobilizes the targets.

  •  Strong Belief that Change Will Occur

The sponsor believes that the particular remedy undertaken is the one that will relieve the organization’s pain. 

  • Organizational Impact of the Change

A change in one area of the organization significantly impacts other areas.  Effective sponsors must understand the complex web of relationships that comprise their organization and understand how the proposed change will affect these areas.

  •  Human Impact of Change

Effective sponsors understand the implications of their decisions in terms of the effects on people and their workloads throughout the organization.

  •    Scope of the Change

The effective sponsor understands how broad or narrow the ranges of responses are among those to be affected by the change decision.    Effective sponsors acknowledge the role of synergy in change and build resilient teams to create that synergy.

  •  Amount of Resources Necessary for Change and Commitment of Those Resources

The sponsor must be willing to allocate the financial, human, and technical resources required to make the change occur.  A common mistake is that sponsors underestimate the time, money, and people resources necessary for the implementation of change.

  •  Demonstration of Public Commitment

Sponsors must manifest commitment publicly so targets know their sponsors are not acting arbitrarily or without support from above.  This is an effect of sponsorship being cascaded down the organization with the targets having knowledge that the change has been legitimized at the top.

  •  Strong Private Support

The sponsor meets privately with key individuals/groups throughout the change process to ensure their continued support for the change.  This is the skillful influencing that goes on behind the scenes that communicates that the sponsor is not just paying lip service to the change project.

  •  Consequence Management

This is the system of rewards and punishments that an organization uses to sanction change.  What is measured in organizations is what is rewarded in those same organizations.  Effective sponsors will identify the “heroes” who can be publicly rewarded and the “heretics” who can be publicly burned at the stake as a signal to the organization. 

  •  Monitoring Procedures

Periodic reviews of progress toward change objectives are essential.  This helps to identify implementation problems early so that they can be ameliorated or eliminated.

  •  Commitment to Sacrifice

The effective sponsor understands that the costs for success are real and leads the way in paying them, thereby establishing a normative behavior that calls for sacrifice when the price of failure is prohibitive.

  • Sustained Support

The effective sponsor will engage in all of the aforementioned activities for as long as it takes to successfully implement the change and avoid short-term gains that are off the strategic path or will consume resources. 

Clearly, this is the most Critical Success Factor in any change effort.  If you would like to receive a copy of the complete white paper on this topic, please contact us.  You can also contact us for a free assessment of your current initiative or project.

 

Did you like this? Share it:

How many bitcoins in your wallet?

Posted on by
2

We had mentioned the introduction of alternative mechanisms of trade and specifically bitcoins in a previous blog (Read it here).  They have been in the headlines recently and you should be aware of bitcoins and their impact.  In July 2010, a bitcoin was worth about 1 cent – a few days ago, it was valued as high as $147 and the total value of all bitcoins has exceeded a billion dollars!!  It is now being compared to the historic tulip bubble in Holland.  Remember, this is a virtual currency made up by a mysterious hacker who has never been seen, has a nom de plume and has been missing online for a couple of years.  And you can buy all kinds of services with bitcoins, transact business, buy hard goods, gamble online and the list goes on.  If you are still not convinced, the recent spike is attributed to many people from Cyprus( has already happened in Belarus and Ukraine)  moving their money into bitcoins to manage their risk because they had apparently lost confidence in their government/banking sector.  The Financial Crimes Enforcement Network (FinCEN), the federal agency that enforces laws against money laundering, now requires bitcoin to register as Money Services Businesses (M.S.B.s).  Bitcoin is managed by a foundation(just like LINUS) with staff. 

Now this is not to suggest that we will all be using bitcoins for everything we do but clearly some of us are using it for some of the things that we do and that will continue to grow.  For an excellent analysis, you can read Felix Salomon’s piece from Reuters but the gist is that while bitcoin is flawed and may not survive, it fulfills an essential need that is not being met by current financial institutions and bitcoin is a very important early innovator that will lead to a longer term alternative – Imagine that!  And this is a currency that is not backed by any government, is not controlled by any Central Bank and is all virtual and online and services the entire globe.  You can read another excellent analysis here which reinforces many of the points made above. It is clearly not a mature alternative and has some fatal design flaws(according to Salomon – and I agree).  However, it continues to grow and become more and more legitimate.  It’s organic nature is meant to be able to fix the flaws as they occur but that is yet to be seen.  People are conducting legitimate trade and transactions – they might be small right now but that’s how paypal started also(although a different model).  An open source model like LINUS supporting a global virtual currency is enough to make you pause yet there is no guarantee that it cannot work. 

In any case, phenomenon like bitcoin deserve very careful monitoring because if more and more consumers start utilizing it and the adoption rates increase, they will start impacting how we conduct business on a day to day basis and the future may be here a lot sooner than we thought.

Did you like this? Share it:

In Celebration Of Women’s History Month

Posted on by
Reply

 In honor of International Women’s Day and Women’s History Month, we would like to honor a pioneer in our profession – Barbara Minto – yes, she of The Minto Pyramid fame!!  She was the first female graduate of Harvard Business School (1963) and she got in without an undergraduate degree.  She was also McKinsey’s first female consultant in the USA.  Prior to that, she was a secretary – yes, a secretary.  It was with McKinsey that she developed The Minto Pyramid – a structured thinking and communication technique that makes creating and presenting your arguments a lot easier – and is still in use today.  For those of you that have been through the TMG Sourcing/Supply Chain “University”, you will recognize the technique immediately and are still hopefully using it :) !!  Remember the vowels  :) .

 Minto essentially developed the argument that it is necessary to group and summarize ideas under a single question or hypothesis (thus the name pyramid).  Let me use a Sourcing /Supply Chain example to illustrate:

Some of you will recognize the objective as a fairly normal one for a simple Supply Chain/Sourcing initiative.  You would then agree that the three hypotheses are fairly logical ones you would reach.  Let’s just take the middle one and continue.  Minto would call this the S(Situation).  The next layer is C(Complication) and would you agree that the three presented  seem reasonable?  Now to resolve the Complications, you would probably come up with the same list of Qs(questions )– n’est ce pas?  Voila – SCQ or the Minto Pyramid(Imagine what  could have  been  had  she gone to college :) !!!).  And SCQ leads to your A(Answer) or recommendation or proposal  to resolve the situation and thus SCQA. 

 This is an extremely powerful way to organize your thinking before you start an initiative and to ensure that you have thought thoroughly and logically.  Then, when you prepare your presentation document (report, paper, slides etc.), you should organize it exactly the same way.  And depending on your audience, you can organize it from the bottom up (Inductive) or top down(Deductive).  Here is another powerful technique based on ju jitsu – the Reverse Hypothesis.  Let’s pretend that you are dealing with a very senior stakeholder who believes or says the exact opposite (not that anyone of you ever faces that) and therefore refuses to let you launch the initiative.  What if you were to adopt her hypothesis – that we cannot generate savings?  To prove her hypothesis, you still have to answer the same exact questions?  Houston – we have liftoff!! 

A doff of the hat to a doyen of my profession and thanks for the pyramid!!

Did you like this? Share it:

Category Management (CM) VS category management (cm)!!

Posted on by
Reply

I was recently invited to speak to the Board of FSMA on an issue that has them totally perplexed.  FSMA is an organization of large food manufacturers and their agents which has been experiencing the following: longer sales cycles, lower margins, demand for additional services, challenges to prove their value add, etc., etc.  And lo and behold – they thought they had found what was causing them all this angst – it was this new thing called Category Management (CM).  For those of you not familiar with the retail sector, this is an integrated process to manage the entire lifecycle of a category of consumer goods.  What it is not, is the category management (cm) process that people in sourcing and supply chain use.  And this is where the confusion and tension arises.

The goals and objectives of CM are strategic in nature and try to maximize the value generated throughout the entire lifecycle of the category - a mini P&L if you will.  Think of Product line organizations or business units with their P&L.  The sourcing process or cm is a subset of the CM process.  The needs of a particular category are developed in the CM process but are then funneled through the cm (sourcing) process to the suppliers.  Let’s take a moment and think about that.  The goal of the CM process is to maximize the profit from a category – the goal of the sourcing process is to find the lowest price supplier.  The head of CM is measured on overall profit – the head of cm is measured on price savings. 

Now imagine the suppliers caught in this vortex.  They are constantly bombarded with the needs of CM where the head of CM is looking for tighter integration of their supply chain, supplier investments in Big Data projects so that they can do a better job of matching demand and supply, tracking effectivity of promotions, understanding consumer behavior better, etc., etc.  Yet their interface to the buying organization is ultimately the sourcing process (cm).  And the sourcing process is all geared towards reducing prices, managing TCO, lowering inventory levels, etc.  While one can argue that the goals of the sourcing process enhance the profitability of the category by reducing price – they do so at the cost of sub-optimizing the overall profitability of the category.  The poor supplier is being set up for failure.  Supplier decisions and behaviors are therefore influenced far more by the sourcing process than they are by the CM process.  No CM director has ever been fired for paying  higher prices to suppliers while a sourcing manager may well lose their job for the same higher prices.  Thus you have these somewhat competing processes with somewhat mis-aligned goals trying to influence the decisions and behaviors of the suppliers  - no wonder they were all tearing their hair out at the FSMA BOD meeting. 

Here is a description of the CM process from one of their major customers: “We are contributing to new product development, exclusive brands redesign and promotional activities, and helping extend XYZ’s leadership in innovation,” said Jody W., senior vice president, Category Management— Bakery, Beverage and Disposables.  That sounds phenomenal and I would love to be a supplier jointly working with my customer and helping them in all of those goals.  The customer goes on to say: “The Category Management team has also launched Strategic Vendor Management, a process for simplifying vendor relationships and streamlining the number of suppliers in each product category…….discussions with respect to assortment, pricing and promotion will be led by the team where we can leverage the buying power of a multibillion-dollar company versus 65 divisions buying individually.”  Sound familiar?????

This dichotomy and tension between CM and cm needs to be acknowledged and recognized so that it can be resolved and aligned.  If so, then all parties involved will benefit tremendously because everyone’s decisions and behaviors will be driven by the goals of CM.  If not, then the poor suppliers will continue to spin in this vortex.  There are many strategies and tactics that the suppliers have available to utilize that mis -alignment for their competitive advantage and actually gain market share and I shared a few of them with the audience.  Ultimately, the goal of the suppliers is to get rid of that mis-alignment to force overall goal congruency.  Till that happens, the title of this blog will stay accurate.  When that happens, the title will become – Category Management!

Did you like this? Share it: