While attending the recent Sourcing Interests Group conference in March, I was struck by the level of talent and the number of years of experience represented in the room at that moment.
During my years in the Supply Chain profession, I have relied on proven successes and lessons learned to help formulate strategies for creating a results-oriented sourcing organization. Developing and executing an effective strategy is only a part of the overall success of insuring a sustainable, value-add organization. Learning from your mistakes is also an essential part of building a successful strategy. Albert Einstein once said, “Anyone who has never made a mistake has never tried anything new.” Certainly, I have enjoyed many successes, but I have also learned from many mistakes along the way. This article will share a few lessons learned over a span of the last 25 years. While not exhaustive, these lessons apply to all organizations.
Lesson 1: Accurate Data
Utilizing fact-based data is essential. Knowledge is power. Accurate data enables the professional to have a focused dialog with the C-Suite and the lines of business. Speaking in a direct and fact-based manner establishes immediate credibility. It demonstrates that you have taken the time to do your homework and that you have the best interest of the organization in mind.
For the C-Suite, drawing a connection between the data, spend behavior, and impact on revenue is paramount. For the lines of business, it shows you understand their operation and how they fit into the organization as a whole. It also enables you to engage them in the process and obtain their buy-in early in the development of the strategy. Keeping the dialog focused on the needs and success of the lines of business, while at the same time demonstrating value to the organization as a whole, can only be done with complete and accurate data.
Key Note: Data is the foundation for everything you and your team will accomplish.
Lesson 2: Prioritize
When your team is limited in size and talent, you cannot be everything to everyone. Focus on your team’s strengths when assessing projects. “Realistically assess your resources and identify which projects you can execute flawlessly within your available resources.” (Bill Huber, former CPO Wachovia). Far too often, we are hesitant to turn down a project. However, taking on a project that your team cannot execute will actually lead to a loss in your team’s credibility.
Therefore, focus on the engagements that align to your strengths and will have the biggest impact on your organization. This does not only mean financial impact. Culture, process, and technology impacts can have a long-lasting, positive influence on an organization that far exceeds some of the financial benefits achieved in a project.
Key Note: Prioritize projects based on ability to execute and impact to your organization.
Lesson 3: Innovate
Using the same approach for every situation does not work. As discussed in Lesson 2, knowing your team’s strengths is critical, but so is knowing what approach to take for each project. Some lines of business “get it” and understand the value that your team can bring to a project. However, this is more the exception than the rule. For example, approaching an internal team of attorneys is not the same as approaching the technology team. When you bring the fact- based data to your legal team, you must also understand that they believe engaging outside counsel is an art. They know which firm to use for each matter and don’t want to disrupt any of the professional relationships they have built. If you neglect to keep this as one of the foremost thoughts in building the strategy with this team, the project will be doomed before it starts.
Key Note: Know what is important to the line of business and develop the strategy accordingly.
Lesson 4: Suppliers are Partners
The term “strategic partner” has been used for years, but there are not many relationships that truly fit this category. Treating your suppliers with respect, especially those who are considered “mission critical and strategic,” will make your organization more successful.
You cannot open a publication today without reading about an event that has impacted the supply chain. For example, the recent disasters in Japan have impacted supply chains from automobile manufacturing to raw material production. Without solid partnerships in place, a company will not be as effective in managing through these disruptions as those companies that have taken the time to build effective relationships.
Working in an open and collaborative environment will lead to improvements in efficiency and effectiveness for both organizations.
Key Note: Your supply base can make or break your company.
Lesson 5: Communicate, communicate, and communicate
Sustainable results can only be achieved by engaging executives and business unit leaders. “One of the most important lessons shared by many current and former Chief Procurement Officers is the need for an advisory board that understands the culture of an organization and can assist in identifying and navigating the landmines that will hamper success.” (Cyndi Joiner, Former CPO GMAC Residential.) The ability to remove landmines is accomplished through focused, open and respectful communications across your organization.
A documented communication plan must be built for each project. The plan needs to include key messages, communication strategies, an approval schedule and execution schedule. It must contain messages from the advisory board to the organization at large. This will ensure consistent communications across the organization. The entire organization will have a complete understanding of any changes in people, process and/or technology and this understanding will ensure engagement from all associates.
For example, the communication plans associated with a large project I am currently managing consists of the following: Four key messages, six strategies, and 20 communications to be approved and executed over a three-month period.
Key Note: Communications must include key messages and be specific to your audience.
These lessons are not exhaustive, but demonstrate some of the key foundational elements that have shaped the Supply Chain profession. Learning from past mistakes will continue to evolve the Supply Chain profession - from one of tactical order processor to a driving force behind the success of every organization.
Overall Key Note: All lessons learned are interrelated. The success of every project and communication you have will be vastly improved by applying these “lessons learned from the trenches.”
See Carol's Amelia Island Summit Presentation with Alvarez & Marsal, "Professional Services Spend Analysis Process: A Supplier Based Approach" by clicking here.