45 Million People Are Blind Today!! Cheesecake Factory Might Be the Answer? (Part 1 of 2)

This is a repost from Sourcing Innovation.

And 80% of them could be cured through surgery (36 million if you’re looking for your calculator).  Oh, of course, most of these people cannot afford the surgery, don’t know about it, cannot physically be where eye care is available, and so on and so on. The answer?  Reverse Innovation (RI) – a term coined by Jeffrey Immelt and Vijay Govindarajan.  The basic premise of RI is that all innovation cannot flow from the developed to the developing world.  There is a lot of innovation going on in the developing world that can and should be adopted here.  According to Govindarajan, one can and should argue that the paradigm in the developed world is ”spend more to come up with innovation,” while in the developing world the exact opposite is true, ”spend less to come up with innovation.”

Let’s look at some comparative facts first:

Mpower Comparison

So, what’s the secret?  It must be that they are performing a procedure that is not even accepted in the developed world.  Not true.  What they perform is called Phacoemulsification (considered the gold standard in cataract surgery).

What they have done is reimagined (not just reengineered) the entire conceptual framework with a different set of assumptions and come up with some innovations that are staggering.  They have created an assembly line mentality that allows surgeons to focus on what they do best – perform the actual surgery.  Not the prep, not the paperwork, not anything else but that which leverages their specialized skill set the most…allowing a surgeon to do 30-40 surgeries a day!!  There is no time wasted between surgeries – the next patient is prepped, draped, and ready to go.  With no degradation of quality!  Oh by the way, Aravind performs about 300,000 of these procedures a year…WITH HALF OF THEM FREE!

Because they are offering the latest procedures with exceptional quality, half of their patients pay them full going market rates which then subsidizes the charity cases, which is what they are really about.  They have used the combined volume leverage and scale to start making their own intraocular lenses and providing some lenses for $2, and they are now exporting these lenses to 120 other countries (Canada, Denmark, Israel amongst them).

 If all of this sounds like a classical supply chain/sourcing problem being solved – that’s because it is.  They have applied a number of ideas from the business world to the non-profit world.  So much so that they have also reimagined the traditional model of a charity organization always looking for a handout – they’ve planned half of their effort to be a commercial venture generating profits to pay for charity.

This is but one example amongst many:

  • GE’s portable EKG machine – developed in China
  • Boston’s PACT program – modeled after a program in Haiti
  • Kangaroo care – developed in Colombia
  • Pedialyte – developed in Bangladesh

And one of the biggest stories is Dr. Therdchai Jivacate (Thailand) who is providing artificial legs made out of plastic yogurt bottles for about $100 with a delivery time of 1-3 days compared to $10,000 and 7-10 days! Dude – don’t throw away that water bottle!  And to lower the cost of labor involved in actually working with patients, he has trained local recipients of the artificial legs.  He just broke the Guinness Book of World Records by serving 864 amputees in 13 days.

So before you pooh pooh those ideas from your colleagues from the developing world, you may want to keep an open mind and process them.  You may want to actively seek innovations from your suppliers in the developing world.  Remember – their context is different and context is very powerful and they are able to reimagine problems that we cannot because we cannot shake out of our context.

In the next post, we will continue this conversation about innovation and examine Atul Gawande’s suggestion of using the Cheesecake Factory (a place I’ve never been to) model to reimagine the healthcare system.

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Who is the First Person You Should Hire?

If I had a dollar for every time I’ve been asked that question-well you know how that story goes?  At every single conference across the globe I’ve spoken at, that question has been asked in some way, shape or form.  Almost every single client has asked that question or some variation thereof.  And the ones that did not should have asked that question.  You can think about it in terms of what is a critical role that you must fill in your Sourcing/Supply Chain organization or any other internal “support” function (IT, Finance, legal) or shared service to confirm my contemporary bona fides.

Before I give you the answer, we need to make sure that we are asking the right questions.  And for those of you that have been through TMG’s decision making module, that refrain will sound very familiar.  Remember the New England Journal of Medicine exercise where physicians were asked to evaluate patients for toncillectomies and they were wrong 49% of the time ?  Otherwise, we can turn to what a couple of my friends said.  Pete says “The most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question.” My friend Al goes on to say basically the same thing: “The formulation of a problem is far more essential than its solution, which may be merely a matter of mathematical or experimental skill.”

Typically, would you agree that in most cases (not including yours of course):

  • Organizations struggle with convincing their stakeholders of the value they create?
  • They face strong resistance in expanding their influence or footprint?
  • Budget wars are an annual and the quarterly norm?
  • Savings numbers are always questioned for validity?

If any of the above is true, then the answer to the title becomes self-evident.  A Marketing person!  I kid you not.  In the first Sourcing organization I set up in my career 16 years ago we had a full time marketing person (Peter).  His job was to constantly market our services and we took a marketing approach to it.  This wasn’t about creating some spreadsheets or graphs of generated savings.  He had to make sure that we continued to expand our footprint inside the company.  To sell our value to the stakeholders.  To keep in constant communication with them.  To make sure we were getting repeat business.  To ensure that we were getting referral to other stakeholders.

Now I’m sure that you are doing all of the above but I’m talking about most of the other organizations.  We have not seen  a true marketing focus being applied to this effort and I’m always surprised by that.  Especially given the tools available today.  It does not necessarily mean that you need to have a full time dedicated resource but you do need to fulfill that role.  So next time you are sitting in a budget meeting being asked one more time to take another haircut, you may want to think about your marketing effort.  Oh, Pete is Peter Drucker and Al is Albert Einstein.  Let me know if you would like more details.

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Succession Planning – Where the Present Meets the Future

I’m sure you expect us to say this but it’s worth repeating: Succession Planning has to be part of an overall Competency Based Talent Management (CBTM) strategy. We start with the basic premise of Succession Planning which is ensuring that you have sufficient qualified bench strength for key roles in the future.  This means that you need to know what your key roles are and the competencies you need so you can determine if you have qualified candidates.  By the way those competencies need to be defined for the future, not today.  All of this requires a CBTM strategy to ensure that you have managed the significant risk of not having the right talent when you need it.  To further illustrate this point, your Succession Planning process will need to be tightly integrated with your recruiting process to ensure that the right types of competencies are being used to select potential candidates.

If you truly believe that your people are at least one of your critical assets, then why would you not manage your risk of replacing those critical assets, especially when these assets can walk away at will and there really is no expected life of that asset for you to plan around?  It would seem to me that the risk of replacing these assets is far greater than any other asset in your organization?  Yet we continue to absorb that risk without any mitigation plan?  And this is not a risk that you should pass on to your HR partners to manage on your behalf.  You should lead this just as you would your overall CBTM strategy and actively use your HR partners as consultants.  Please do manage your expectations in dealing with your HR department as most of them are not geared up for this kind of work yet.  You actually will be leading them in some cases and become the test bed and leader for the rest of the company

Successful Succession Planning necessarily starts with an understanding of what your future competency needs are for key roles and then designs a strategy that encompasses both an internal and external sourcing process.  While some of the “high potential” programs do an adequate job of at least identifying some of the replacement candidates, even fewer have a pro-active process in place for their success.  “High potentials” cannot be a replacement for a Succession Planning strategy within the context of CBTM.  A comprehensive understanding of your company’s long term business strategy is critical to knowing what your future competency needs are going to be.  If your company is going to be much more active in the global market than it is today, then your Succession Planning strategy of replacing Joe, who is your most critical employee today with Joe’s competencies, will expose you to significant risk.  And if those competencies are not present in your organization, then you will have to start developing them internally and acquire them externally to manage your overall risk.

Let me try and conclude the conversation with some quick summary thoughts on a very complex issue.  Succession Planning:

  •  must be part of an overall CBTM strategy  –  the core of that and the first step is a competency model for the future tightly integrated with your company’s long term strategy
  •  must be approached as managing significant risk of a critical asset and therefore sponsored at the highest levels and directly led by you, not HR
  • cannot be replaced by a “ high potential” program
  • must incorporate both internal and external sourcing strategies
  • is not a periodic event but an integrated, pro-active, ongoing process
  • has a retention programs as a  key component

A successful Succession Plan as part of an overall CBTM strategy is key to sustainable value creation.  It also will position you as an innovative leader in your company and position your organization as adding value beyond the confines of a narrow functional definition. Your organization will also be looked at as a leadership factory where other executives come to pluck the best candidates to seed their organizations.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Major research project geared towards not just identifying the problem but to identifying Next Practices to solve the problems
  • White Paper to focus on Next Practices in Competency Based Talent Management
  • A webinar discussing our findings in detail

Please share your thoughts and challenges regarding Talent Management below. We would love to hear your insights.



Reposted on Sourcing Innovation.

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An Annual Necessary Evil – The Performance Evaluation

We all dread the annual performance evaluation process whether we are a Sourcing or Supply Chain employee or a manager. It seems like the same old process year in and year out, used simply to justify compensation increases or not. If the performance evaluation process is part of an integrated talent management program, it doesn’t feel that way. In most cases the measures are tactical in nature and measure activities as opposed to value added outcomes. The measures are seldom tied to the strategic objectives of the company and in many cases drive behavior that is detrimental to achieving those strategic objectives. Your development plan (if there is one) usually lists a variety of training classes you can take individually to improve your individual skill, often ignoring the required organizational competencies that help drive real value for the company. This process should be ongoing and not just annual, but at most companies it is not.

Performance evaluation can be one of the most powerful tools in Competency Based Talent Management (“CBTM”) but it must have a well-defined competency model at its core. It should also be integrated into the other four phases – recruiting, training / development, career management and succession planning. Here is how this should work:

  • Define the role of the Sourcing / Supply Chain organization and the individual job roles in a way that supports the strategic objectives of the company.
  • Determine the competencies (behaviors – both strategic and functional) necessary to be successful in the defined roles. This is your competency model.
  • Use the competency model to:
    • Determine the skills / competencies required when recruiting
    • Determine the skill / competency gaps to drive your training / development program AND the individual development plans as part of performance evaluation
    • Determine the metrics / measures that will be used to drive the performance evaluation process and career management
    • Drive your succession planning

When performance evaluation is supported by defined competencies the process takes on richness for the employees that helps them understand the behaviors (much broader than activities) that are required to be successful currently and those required to move forward in their careers. In addition, competency based performance evaluation helps managers / employees to identify gaps in strategic competencies (e.g. communication, collaboration, teamwork, change leadership) which are less “measureable” but are as, or more, important than functional competencies. If evaluating performance is focused solely on building functional expertise, as opposed to the critical business skills that make a successful business professional, then the organization will have a difficult time moving employees into future leadership roles (career management and succession planning).

Performance evaluation must also focus on demonstrated competency, since having competency that is not being utilized is of no value to the organization. As such, competency based performance evaluation should be structured such that employees are incented and rewarded (compensation $$) for acquiring and demonstrating new competencies and managers should be held accountable to ensure that employees do so. If you think about it, competency building clearly helps the employee build their individual skill set but also helps to build overall organizational competency. Competency based performance evaluation will make it easier to differentiate between high performers and everyone else since the evaluation process will be less about “what you know” and more about “what you do with what you know”.

Lastly, a critical outcome of performance evaluation must be an improvement plan. Here again, the focus should be on identifying gaps in demonstrated competencies and creating strategies to close those gaps. The improvement plan should be mutually agreed upon and managers should be measured on creating opportunities for their employees to acquire and demonstrate new skills.

In summary, a well-defined competency model is a powerful tool when used throughout the talent management lifecycle, particularly performance evaluation. If you don’t have one for your Sourcing / Supply Chain organization, it is a necessary investment in your most critical asset — your people.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Major research project geared towards not just identifying the problem but to identifying Next Practices to solve the problems
  • White Paper to focus on Next Practices in Competency Based Talent Management
  • A webinar discussing our findings in detail

Please share your thoughts and challenges regarding Talent Management below. We would love to hear your insights.



Reposted on Sourcing Innovation.

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Fighting the War for Talent – Focus on Career Management!

We’ve been hearing about the “War for Talent” in the Sourcing / Supply Chain space for quite some time and it does not seem to be improving. In our previous posts, we explored how the lack of a holistic approach to Competency Based Talent Management (“CBTM”) is the root cause of the problem. In addition, we have advocated that to be sustainable, CBTM must cover ALL five phases of an employee’s journey through a company — recruiting, performance evaluation, training / development, career management and succession planning.

Let’s focus here on one element – Career management. According to Wikipedia, Career Management is the combination of structured planning and the active management choice of one’s own professional career. While career management should ideally be the responsibility of the individual, it MUST be driven by the organization. To start, employees need to know which skills / competencies are required to be successful today and how those skills /competencies need to grow and develop in order to progress within the company. These can only be defined by the organization and are the foundation for CBTM. A well-defined competency model, which is critical here, can also be used and integrated into the other four phases of CBTM. In addition, individuals need to see the career options (career path) and the expectations associated with moving through the path. How many Sourcing / Supply Chain organizations have actually taken the time to not only define the competencies but also lay out a career path for their employees? Not many. By the way, the first people to leave because of the absence of career management are the people you most want to hold on to — your high potentials. They are off listening to other companies who seem to be able to articulate a career path – can’t all companies do this during the recruiting phase even if it is all smoke and mirrors?

Without a Career Management process in place, you will:

  • lose your best people
  • constantly be recruiting (this is an expensive proposition)
  • never realize the full ROI of your asset (your people) base
  • lose the opportunity to infiltrate (love that word) the rest of the organization with Sourcing / Supply Chain thinking
  • never get beyond tactical contribution (real value comes thru competency growth)

The consequences of ignoring Career Management as part of your talent management program (if you have one) can be devastating to an organization. While the official definition of Career Management places the responsibility with the individual, the organization needs to put the infrastructure (process tools, metrics, mentors, etc.) in place AND drive the adoption and execution of the process. If we look at Career Management as benefiting both the employee and the organization then we MUST ensure that it is happening — tools are of no use unless they are being utilized.

What do you need to do to fix the career management void? Here are a few Next Practice tips:

  • Develop a competency model which allows employees to see their path for success
  • Tie career progression to competency growth
  • Ensure that competency growth is NOT about “what you know” but more about “what you DO with what you know”
  • Link career paths across functions by competency
  • Ensure career management is integrated into ALL phases of CBTM
  • Create a “success culture”, providing organizational mobility and access to new opportunities
  • Provide employees with “stretch” assignments to further competency growth
  • Ensure your organization is the “place to be” to ensure professional growth
  • Provide ongoing feedback and coaching so that employees can grow and take advantage of new opportunities

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.



Reposted on Sourcing Innovation.

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