Tag Archives: Process Adoption and Implementation

Hitting a Strategic Sourcing Home Run

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I’m not a huge baseball fan, but my daughter gave me the book Moneyball (used at many leading business schools) by Michael Lewis and I was eager to see the movie.  Brad Pitt takes a break from his jet-setting life with Angelina Jolie to play Billy Beane, the General Manager of the Oakland Athletics baseball team. Billy Beane is well-known for fundamentally redefining the way baseball teams make decisions and challenging the way teams had been managed for over a century.  He essentially changes the decision criteria used to select players to a much more fact-based model, which focuses on the real value the players bring toward the Intended Consequences (getting a win).  Once he redesigns the consonants (People, Process, Technology), he quickly realizes that getting to the expected results is still far away. It’s not until he focuses on the vowels (Adoption, Execution, Implementation, Optimization and Utilization) that the results start showing up.  The constraints he faces should sound very, very familiar to everyone.  Follow the trail and tell me if you agree that we all need to be a Brad Pitt (no that does not come with Angelina Jolie).

  • Faces resource constraints in terms of total budget available – SIGNIFICANTLY less than the competition
  • Entrenched resistance
    • Scouts who still evaluate talent the way it’s been for decades (decision models and processes)
    • Salaries of players based on old metrics (reward system)
    • Players who define their roles based on those metrics
    • Middle management (Manager) a TOTAL barrier to change
    • Players totally fighting the change
    • An organizational attitude that accepts failure
  • An environment (the entire sport of baseball) that is openly hostile to every move he makes
  • Changing the entire Value Chain and redefining the way value is created(getting on base leads to wins)
  • Dealing with early losses and still getting the organization to stay committed
  • Getting rid of some of the players to set an example
  • Create value from a supply market (players) that has been sourced by the competition already

The parallels continue.  By the way, those of you not familiar with this particular story or baseball in general, a parallel might be what Lionel Messi and Barcelona have done in terms of redefining soccer away from long kicks and passes to short passes and a possession game.  Even though they have clearly proven that it is far superior to the competition, others have been very slow to adopt.  This concept is why you need Next Practices as a way to create an advantage while others chase Best Practices.

The more interesting question is what you do to stay on top while others adopt the same style and strategy.  And if you think I’m stretching the argument, you will find that since a large portion of baseball has adopted Billy Beane’s vision, his old techniques no longer provide the leverage.  In fact, he cannot compete because he does not have the resources that the other teams do.  And since they are sourcing the same pool of players using the same techniques, his leverage (exploiting market inefficiency) is gone.  This is no different than Supply Chain/Sourcing organizations going back into the supplier market using the same techniques that everyone else is using (Best Practices).  In fact, the best model of that are now the Milwaukee Brewers, not the Oakland A’s.  And even they have had to continuously adapt because everyone has adopted the same tools.  And oh by the way, we all assume in the Supply Chain world that the supply market has not adjusted to the techniques that we have been using?  If you think of it as a system that seeks equilibrium, that assumption just does not hold true.  If you would like a more detailed presentation on this, let us know.

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Adoption / Implementation and “Going Green”

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As I was getting my day going by catching up with my typical round of marketing blogs, I caught an article on mashable.com about the value Canon is getting from “going green” (4 Ways To Make Your Office Greener, http://mashable.com/2011/07/12/green-office-canon/).  I found this article interesting as I have always thought that the use of the word “green” in marketing and business is overused, trendy, and underwhelming. This feeling comes from my tendency to cringe every time a word becomes overused in advertising like cutting-edge (of course we will ignore my tendency to use the word awesome at every opportunity). However, as companies work to find ways to cut costs and streamline processes, it appears that the savings some organizations are experiencing by “going green” are anything but underwhelming. In fact the results can be quite impressive.

According to mashable.com, Canon saved 2.7 million kilowatt-hours of energy from 2009-2010. This equaled a savings of more than $300,000 in utility fees over a two-year period. With companies scrimping and saving these days, we aren’t talking small organic potatoes. The four areas they focused on in this initiative included replacing monitors, switching traditional light bulbs with low carbon lighting, and replacing personal printers with multi-function systems. However, the area of change that stood out most to me was on the operations side. The change went beyond the usual turning off of lights and updating equipment. The drive to “go green” also became part of the organizational cultural. As part of the program, they conducted environmental education and training for the staff. In my opinion, this additional step was why their initiative was so successful.

According to the Daily Energy Report (Feb, 2011 http://www.dailyenergyreport.com/2011/02/how-to-incentivize-employees-to-go-green-at-the-office/) most buildings that are considered green are not living up to their green performance ratings. The main reason for this discrepancy, the Report states, is that the employees themselves are not “going green.” They are not following the green guidelines for various reasons. To rectify this issue, organizations need to look beyond the processes and see what they can do to influence the organizational culture with stakeholder buy in from all.

It is amazing how these articles mesh perfectly with our AEIOU approach. The vowels stand for Adoption, Execution, Implementation, Optimization and Utilization. An organization can have the best processes of any company in the United States, but without the additional AEIOU, the process stays to paper and rarely becomes fully executed to its full potential.  AEIOU gives meaning to the measureable components and creates a real transformation effort.  Unfortunately, this additional step is frequently overlooked as organizations concentrate on the areas that are measurable.

For a company to truly go green, they need to look beyond how many energy-saving printers are available and look at how best to get employees to move from thinking to acting. Processes and Training are only part of the equation. The culture also needs to change to create maximum impact. That is why Canon was successful at going green, while other organizations have missed the mark. They understood that changing light bulbs and printers was not going to give them the results they were looking for. They created support from their employees and made them stakeholders in the change.

So perhaps I should look at “going green” a bit differently myself and see it as more than just a marketing catch phrase but truly a frame of mind.

 

If you have any thoughts or want to add to the conversation, please do.  I’m always interested in other perspectives.

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A “Side-ways” Look at Measurement and Change Management

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Ever notice, that in spite of all the energy and “diligence” we put into selecting the right measures or metrics for business today, and how much measurement detail we wire into our Change Planning, we can still question these measures when change stumbles mid-stream or we find ourselves rationalizing (again) the outcomes upon project completion?  Measurement is certainly one of the facets of change management that can become over-engineered and we can get lost in the complexity we create.

Take for example, the oft cited disappointment with the “failure rate of change”–our OWN scorecard! It is estimated to be as high as 70% in studies by researchers at Harvard and McKinsey.  Just how badly should we feel?  Of course, we are motivated to succeed and are even drawn to the role of Change Leader to take on challenges from which many others would run.  That said, in a classic measurement mind-set error, we are beating ourselves up for this “high” and “unacceptable” failure rate.  Really?…what if the base-rate for failure is 100% and the best we can hope to achieve—the summit (as an average across initiatives and all companies) is 60% failure…now THAT changes your perspective…does it not?  If you only fail 2 of every 10 times, you’d be a genius!

The most frequent Change Measurement error I find, in spite of great diligence placed on defining metrics in many Change Teams, involves the arbitrary nature of the measures chosen.  Why, for example, were you asked to report monthly or define your project milestones relative to the calendar or company’s fiscal year?  Is this the natural cycle of change and the most meaningful definition of milestones and achievement for the transformation you’re leading—I doubt it.

When I was a child, we measured my height on the first day of the new school year, and marked my progress on the door frame to my bedroom.  Now…what if my “growth spurt” occurred during the months of June – October, is any conclusion about which school year included the most growth either accurate or representative?…No.

Take a look at the measures you’ve wired into your Change Initiative?…Do any of those seem to be a bit arbitrary—or moored to the wrong anchor for creating meaning and accurately representing change progress?  Consider, for example:

  • If you are attempting to influence your customer’s business, are your measures defined by the natural cycle of their outcomes…or your own?;
  • Look at the reality of the change you are driving—What are the early signs of progress?…What indicators would tell you that it’s taking hold?…How will you know when it is “complete?”…(my guess is that these have nothing to do with the calendar or your company’s fiscal schedule);
  • Do your measures of sales/revenue growth match the sales cycle?…or your customer’s buying patterns (e.g., their own fiscal year or timing defined by their market)?
  • And most fundamentally…

“If you took away the calendar, is there ANY reason why you’d chop up your transformational, complex endeavor into bits defined by December 31?…Fiscal “quarters?”…Days when it is most convenient (or traditional) for the Management Team to meet?”

Challenge your Change Team to re-examine the “logic” behind your measures or the measures that are important to your stakeholders.  In all likelihood, some of these measures lack meaning because they are not connected to how you are creating value through your initiative—even getting shaped by rather arbitrary factors (if not lazy efforts) like the calendar on the meeting room wall or your businesses monthly reporting cycle for everything from paying taxes to ordering office supplies.  Measurement plays a key role in managing expectations and delivering demonstrable value through change—get this part right and where necessary, lead a revolution to overthrow arbitrary accounting of success.

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Troops in Afghanistan – a Dramatic Case Study for AEIOU

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Today’s post is from Anne Kohler, COO & Executive Vice-President, of The Mpower Group (TMG) and a contributor to the News U Can Use TMG blog.

What do these historic events have in common?

  • U.S. Invasion on North Korea
  • The Bay of Pigs
  • Watergate
  • Escalation of the Viet Nam War
  • The Hostage Rescue in Iran
  • The Challenger Disaster
  • The Bush Administration’s Invasion of Iraq

This list represents some of the biggest decision-making disasters in history.

A few weeks ago, the famous Washington Post White House author, Bob Woodward wrote an article entitled “Military thwarted president seeking choice in Afghanistan” which was all about the critical nature of decision-making.  What greater decision can there be than deciding the fate of tens of thousands of young U.S. men and women as they are sent into war-torn Afghanistan?   The article chronicles the process that President Barrack Obama undertook in finally deciding to send 30,000 additional troops as opposed to the 40,000 (which came highly recommended by his military leaders) in December 2009.

Obama discovered after months of negotiating with national security officials and being in the middle of a war entering its ninth year that three simple questions could still NOT be answered:

  • What is the mission?
  • What are we trying to do?
  • What will work?

In other words, what is the intended consequence in Afghanistan? . . . . . . . . . . . . . . . .

As it turned out, Obama’s military leaders wanted to provide a solution (40,000 new troops) without defining a strategy – the answers to those three simple questions (obviously not so simple!).  Obama asked for a strategy (the answers to those questions) and asked for options, but the inability to answer those questions kept leading back to NO viable options except for an option that was UNacceptable to Obama.

Having been well versed in decision-making disasters from the past (see above), Obama chose to follow a more structured decision-making process.  He knew he had many intelligent key stakeholders at his disposal and wanted input, alignment, and buy-in from all of them.  He actually made a meta-decision – he decided how to decide by answering the following:

  • Who needed to be included in the decision-making process (stakeholders)?
  • What role would each stakeholder play in the decision-making process?
  • How would the decision be made – what criteria would they use to decide?
  • When did the decision need to be made?

Obama did a thorough stakeholder analysis to determine who needed to be included in the decision-making process.  He realized that it was critical to include both military and civilian leaders.  He also determined each stakeholder’s role in the process; keeping the final decision for himself.  He then determined the decision criteria and insisted on being provided options by his advisors, which was critical.  Finally, he did not allow himself to be rushed into making a quick decision (his military leaders tried to do just that) which allowed him the opportunity to consider many alternatives.

At the end, he “sold” his decision to all his stakeholders and insisted that they put their full support behind it.  Obama said, “I don’t want to have anybody going out the day after [the speech] and saying that they don’t agree with this.”

Time will tell whether or not this was the right decision for the U.S.  BUT what we can glean from this article is the importance of having a disciplined approach to decision making.  Even if all of Obama’s stakeholders did not necessarily agree with the final decision, it appears that they did respect the process.  Right before the decision was announced Obama gave Robert Gates, his Defense Secretary, a final opportunity to dissuade him saying, “Can you support this?  Because if the answer is no, I understand it and I’ll be happy to authorize another 10,000 troops, and we can continue to go as we are and train the Afghan national force and just hope for the best.”  Gates did not take Obama up on his offer.

This is just one example of the importance of decision-making.  This is the one skill that most leaders are never trained in, even though it is the most critical part of their job.  It is one of the elements of our AEIOU model, which stresses that the best infrastructure (people, process, tools, and technology – the consonants) in the world is useless without the glue that holds it together (Adoption, Execution, Implementation, Optimization, and Utilization – the vowels that turn the consonants into a language).

Some of the most important events in history required effective decision making and yet we spend little to no time on developing the skills necessary to make good decisions.  The recent deaths in the California wildfires have been attributed to poor decision making by the firefighters.  The good news is that this has led to the addition of decision-making to firefighter training.  One of the most critical decisions that affects all of us is that of a jury.  Yet numerous articles have been written about the fact that our present system does nothing to provide jurors with the tools to decide the fate of a human life.

We need to think about this key skill beyond our politicians and public servants.  How about executives of any kind?  Supply chain leaders?  Sourcing teams?  This should be a critical leadership skill that is purposely taught to all professionals – let’s provide the vowels to complete the language!

Thanks Anne!

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Effective Execution of Process is Key to Translating Concepts into Action and Results

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(Reposted from Sourcing Innovation) Most of us missed it. They were trying to tell us about it when we were very young. We were not even in nursery school yet! It’s all about the vowels. It’s not about Old MacDonald’s farm, his pigs or hens or any of that … it’s about E-I-E-I-O! Now what do vowels have to do with Sourcing and Supply Chain Management you might be wondering? Well, as it turns out … everything! The vowels are the most critical link between our alphabet and our language. Without vowels we don’t have words … we just have letters! Without words, we have no sentences, no language, no meaning, no intelligence — in short, we have nothing! And so it is in our organizations. We focus on the tools, templates, processes, systems (the farm, the pigs, the hens) and we forget about the most critical elements in achieving exceptional business results — the vowels. And without the vowels, all we have are letters. There is no meaning … and we add no value!

The vowels I am referring to are Adoption, Execution, Implementation, Optimization and Utilization. Without these, all we have is an organization that has the best practices, the best processes, the best tools, the best templates, etc. In other words, what we have is a Toyota. We might have an organization that may be succeeding at a large scale, but we don’t have a sustainable model in the long run. For that, we need the vowels … the ever powerful vowels! If you were strategically sourcing a surgeon for yourself, I am sure you would look at more than just the tools that the surgeon has at her disposal and the training that she has been through. You would want to know what she could do with the tools and the training … n’est-ce pas?

And yet, sadly, it is still very hard to convince most organizations where they need to invest their focus and their energy. They all think that all they need is to develop the right infrastructure in terms of the processes, tools and templates and then train their people on the infrastructure and — voila — just wait for the results. We keep trying to tell them that they should budget at leastan equal amount of effort in the vowels, including the help of an expert talent management consultancy, and they continue to insist that all they need is what Old MacDonald talked about … and that the vowels will take care of themselves. Alas, they don’t. The superior business results never materialize. The organization gets frustrated and decides that it needs to adopt new processes, tools and templates because the current processes, tools, and templates must be broken. The cycle starts all over again. And the lessons of childhood are forgotten … that’s it’s not in the verse … it’s in the chorus … it’s all about E-I-E-I-O!

And the focus on the vowels needs to start very early. After all, the alphabet does begin with an A! Furthermore, the focus cannot end with just the creation and training around the process, tools and templates. It has to extend all the way to the point where superior business results are achieved. And while we will need the best tools, templates and processes (for the infrastructure), the mere presence of, and training on, the infrastructure is clearly not enough. In order to truly achieve superior business results, we have to make sure that we pay attention to the vowels.

The focus has to be on what happens beyond the training, how people will actually achieve superior business results, and how they will successfully adopt, implement, and execute the processes. It is the same with supplier relationship management processes. It’s not how you design them, it’s how you implement them. You need to focus on how these relationships will be established and managed to extract maximum value. It’s not just about getting to the contract. At my company we believe in this so much that we even approached a couple of the major law firms to encourage them to include the vowels in their deliverables to clients when they work on executing large transactions between providers and suppliers to help set up these relationships. We did not avail, but we know we’re right. (By the way, it is the same with organizational structures. To optimize them, we have to focus on the lines [vowels] between the boxes, not only the boxes.)

Here is how the doctor described the goal of a transformational journey:

We mostly agree with this except we think the potential is even greater than that. A truly transformational Sourcing / Supply Chain department actually should be transforming other departments. They should be totally focused on value across the entire supply chain. The department should function as if it was a consulting group. The best strategy for such a department is actually a “Sunset” strategy. This concept, and others, will be discussed in later posts.

We will examine this issue in detail in a series of posts. We will begin the transformation journey together. We will discuss the use of maturity models, both current and emerging ones (which look almost identical to the current models) and talk about the gaps and the roadmaps. You can rest assured that we will not ignore the consonants (the maturity models, roadmaps, infrastructure and talent management) … but, we will also focus on the vowels (Adoption, Implementation, Execution, Optimization and Utilization). Because there’s gold in them thar vowels. We will take you back to your childhood, to the days of Old MacDonald, to E-I-E-I-O and then we will build a solution framework and challenge your thinking. We encourage you to join the conversation. Add a cluck, cluck here and a cluck, cluck there … and pretty soon we’ll have everywhere a cluck, cluck!

Thanks, Dalip.

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