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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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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Don’t Shoot – The Messenger May be MORE Important than the Message!

How many times have you had to deliver bad news and your opening line was, “Don’t shoot the messenger!”   As we think about and develop communications, both internal and external, we often agonize over form, format, timing, messaging, technology, etc. in an attempt to ensure that what we are communicating will be heard, spread to others and even acted upon.  What we don’t think about often enough is the messenger. 

In an article I read in Harvard Business review “The Other Factor that Makes an Idea Spread”, author Julianne Wurm notes that “. . . . . much of the desire to share an idea with others was linked to that idea’s carrier. It’s the carrier who gets the audience to open up, trust, and ultimately spread the idea. Some well-known examples of carriers of ideas would include Daniel Goleman, who popularized the idea of emotional intelligence in 1995 although the concepts and research were actually conducted by John Mayer and Peter Salovey. Malcolm Gladwell has brought forth the ideas of others in nearly all his books from Blink to The Tipping Point and Outliers. Maria Popova of the popular blog Brainpickings  connects different theories and opinions in unexpected ways.” 

I found this article interesting because communication and the ability to share and spread our ideas / recommendations is the most critical element of our jobs as Sourcing professionals.  If you buy the fact that most of our issues are internal – and believe me they are, STILL, then communication as a change management tool is critical to our success.  If the messenger really does matter, as noted above,  then we need to ensure that our messages are delivered by the most effective messenger we can find.

Here are some of the attributes of an effective messenger:

  • Ability to connect with the audience
  • Strong storyteller, thinker or writer
  • Make fresh connections and present clear arguments   
  • Likeable (people will listen to people they like :-) ) – the opposite is true as well
  • Give ideas context they may lack standing alone

By the way,  messengers can / should change depending on the content of your message and the recipient.  As such, developing a communication plan that includes the messenger as a key element is important. As you are deciding on your carrier, consider the attributes of a successful messenger.  Don’t assume that the most senior person in the organization is automatically the ideal messenger because the opposite may be true. 

When asked by our clients, “who is the first person you would hire for your Sourcing organization?” we always answer -  a marketing / communication star.  The reason is that “selling the change” is by far the most critical activity for an organization that is trying to change behavior across the organization and communication is on the top of the list in “selling the change”.  As you are considering which competencies are most critical in your sourcing professionals – it is strong communication skills.  If that is a skill gap for your organization, that may be the reason you are not making headway with your internal issues.

Remember, the next time you have an important message to communicate, make sure your messenger is embraced, not shot!

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

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Does Your Brain Have More Gray Matter or White Matter? And Why the Heck Should You Care?

Before we answer the above questions, let’s start with a few more.  Have you ever wondered how you make decisions?  Would you like to know so that you can improve your decision making ability?  Would you like to know how your group/organization makes decisions and take some action to improve their decision making capabilities – if you could?

Would you prefer that decision makers (From Black Rock Blog):

 ”Focus more on long term goals OR short term metrics?”

“Be thorough and take time OR be more impulsive?”

“Recognize their shortcomings and seek more information and help OR assume they know everything?”

Consider rights of others and be more cooperative OR not worry about that and focus on the task?

Be more inquisitive and see more solutions OR depend on rules, regulations and traditional ways of doing business?

Utilize Cooperation, Collaboration and Consensus-building to make better decisions and more effectively execute decisions OR ummm not?

 If you were leaning more to the left of those questions and want more of those qualities in decision makers, then it’s important that you know the following about these types of decision makers (From Harvard Business Review):

  •  They have 15% of gray matter compared to their counterparts(Gray matter equals information processing capabilities)
  • They have 10 times more white matter than their counterparts(White matter equals connecting the dots between the information produced by the gray matter)
  • The cord connecting the left and right sides of their brain is 10% thicker!!

And in case you were wondering why you should care, here are some corresponding business results (From Science Daily):

  •  Boards with high representation from such decision makers experience a 53% higher return on equity, a 66% higher return on invested capital and a 42% higher return on sales (Joy et al., 2007).
  • Having just one such decision maker on the board cuts the risk of bankruptcy by 20% (Wilson, 2009).
  •  When such directors are appointed, boards adopt new governance practices earlier, such as director training, board evaluations, director succession planning structures (Singh and Vinnicombe, 2002)
  • They make other board members more civilized and sensitive to other perspectives (Fondas and Sassalos, 2000) and reduce ‘game playing’ (Singh, 2008)
  • They are more likely to ask questions rather than nodding through decisions (Konrad et al., 2008).

 It would be very simple if I gave you an easy way of identifying such decision makers and then bringing them into your organization and making sure that their special attributes were being utilized in decision making?  Or, if there were an easy way of identifying these types of decision makers in your organization and then promoting them to make sure you were getting better decision making?  Or, making sure that all your teams have enough representation of these types of decision makers to ensure that teams are making better decisions and executing them more effectively?  We all wish life were that simple, don’t we?  Those that follow us regularly or have been through Strategic Sourcing/Supply Chain “U” with us will quickly remember the significance of decision making as a competency in organizations and why we spend so much time on it.  We have been doing extensive research and writing about decision making and other strategic competencies as being fundamental to the success of organizations.

Oh by the way, I forgot to tell you about another attribute that these types of decision makers share and it might important to note.  They are homogametic.  They are women.

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If You Aspire to be a Leader, Start Acting Like One – NOW!

As the mother of three millennials (all boys), two who have already started their careers and one that has just started college; I find myself constantly trying to give them advice about how to progress in their careers as well as in their lives.  The lessons I think are important are nothing new BUT they are a constant reminder to me that the more things change, the more they stay the same.  My best advice to them is the best advice that I ever received – “No matter what your position or role, always be a leader”.

I want to be clear that I am not talking about being the named leader – that is just a title.  I am referring to being a leader, no matter what group, team or organization you are a part of or what position you hold.  This can, by the way, start as early as being that player on the T-ball (do they still play T-ball?) team or that dancer in ballet class that works harder than anyone else.  It can be that kid that participates in class vs. being the kid that tries to act cool by not responding to the teacher or the kid that decides to skip the party down the street while all of his friends get drunk.  It can be that kid that is kind to everyone including those that look, sound or act different.  Start acting like a leader now and it will become second nature your entire life.

I read an article by Amy Galo in the HBR Blog Network, “Act Like a Leader Before You Are One” and it provided some practical advice for those that aspire to be future leaders. She offers several tips that were taken from Own the Room: Discover Your Signature Voice to Master your Leadership Presence  coauthored by Murial Maigan Wilkins and Amy Jen Su. Here are the highlights:

  • Knock your responsibilities out of the park  - this is table stakes.  Do your current job well.  Whatever you are asked to deliver, make sure it represents your best work.  In other words, EARN the right to eventually sit at that leadership table.
  • Help your boss succeed - and be willing to execute his/her priorities.  Always be willing to help / lead important projects or say yes whenever you are asked to take on something new. 
  • Seize leadership opportunities, no matter how small – even those that go beyond your relationship with your boss.  In other words, raise your hand to take on even the simplest task like facilitating a meeting or attending a recruiting event.  Also consider making yourself visible outside of the company by leading a volunteer project or joining a board.  These type of activities also signal your willingness to take on leadership roles.
  • Look for the white space – Take on challenges or projects that no one else wants to do.  It is a real opportunity to stand out.
  • Don’t be a jerk – The simple advice here is “Don’t try to exert authority when you don’t have it”.  Display “humble confidence” and put your team before yourself.  
  • Be cautious when sharing your ambition – It is OK to share your ambition with your manager but frame it in terms of what’s best for the company.  In many cases it is safer to take a “show”, don’t tell approach.  Be careful here in case you have a boss that may feel threatened by your aspirations . . .
  • Find role models - both good and bad.  Look for people one or more levels above you who have roles that you want and study what they do.  Try to figure out a way to work with them by volunteering for a committee or a project.  Also, look for those people that are stuck in their careers and study them for examples of what NOT to do.  By the way, don’t assume that your boss is someone you should emulate.  There are plenty of bosses out there (and we have all had one) with poor leadership skills.
  • Build relationships – at all levels of the organization as there is NEVER a down side.  It is doubtful that your boss with be alone when deciding your next move so the more people that have a positive impression of you the better.     

I recently sat through a C level meeting with one of my clients where every direct report was discussed for potential, future leadership roles.  I can tell you that technical competency was not mentioned once.  What was mentioned was many of things that were noted above –  leadership  presence,  willingness to take on new challenges and say “yes” as opposed to ”no”,  ability to make decisions, change leadership, ability to influence others and build relationships,  etc.   This, by the way, was not the first time I had heard this from similar C level teams.  What I find most interesting is that these are skills that you cannot teach an adult in a classroom.  These are personal characteristics that are honed throughout your career.     So the moral of the story is – it is never too early to work on your leadership skills because EVERYONE is watching . . . .

 

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