Archive | February 2014

Leading With a Challenge

By Matt Heemstra – Cain Ellsworth & Co

“People are tired of simple things.  They want to be challenged.” – Umberto Eco

I recently finished reading an interesting book called The Challenger Sale, by Matthew Dixon and Brent Adamson.  I’m not big on reading book reviews disguised as blogs, so I’m not going to spend 1000 words talking about the book.  I’ll just strongly suggest it to business leaders everywhere.  You can read more about it here.

The short version is this:  the predominant view of sales success in recent history is that the most successful salespeople are “relationship builders”.  I think most of us understand what that means – the kind of people who are good at making friends, that people like being around, that make you feel comfortable, etc.  The authors suggest (based on fairly exhaustive research) that while those people are good at making friends, they aren’t so good at making sales.  Their theory is that the truly successful salespeople are those who make customers uncomfortable, who ask questions that customers can’t answer, who challenge customers.  Those are the salespeople who demonstrate value.

The most interesting part of that theory to me is how that idea relates to leading an organization, beyond just the sales function.  How do you lead your people?  Are you challenging how they think?  Are you making them uncomfortable?

ChangeI’m not suggesting you don’t encourage your people, or develop relationships with them, or that you should try to make them dread going to work.  What I’m suggesting is that the status quo is not acceptable.  Your organization has to change to thrive – or even survive – over and over again.  In order to make that change, people have to be uncomfortable with their current situation.  They have to question what they’re doing & how they’re doing it.  And that mindset, that constant pushing against the way things are – that has to start with the leaders.

If the leader is OK with the way things are today, all the employees will feel the same way.  People will get complacent.  Your organization will develop the belief that the way things are now is as good as they can possibly be.  Change will be viewed as something to be avoided.  And in the world we live in, that’s a death sentence for any business.

How are you leading?  Are you challenging your people?  Are you pushing them outside their comfort zone?  Are you preparing them for a great future – or no future at all?

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Where’s The Money Gone?

By Andrew Downard – AD Supply Chain Group

Money2A seemingly simple question for a business leader to ask and one that most would think it would be easy to answer.  Unfortunately in many organisations it is not that easy to get a handle on where the money is going.  If we take an average business in the manufacturing sector then perhaps 25% of the money goes out the door on the cost of people, 15% might be taken up on overheads and 10% gets kept as profit.  So what about the remaining 50% of money that goes out the door?  This is money being paid to third parties for raw materials, goods and services.  Should be easy to get a handle on, right?  In most cases the answer is it’s not so easy at all!

But we have an ERP or Purchasing system you might say!  Again in most organisations Procurement only controls about 30% of the third party spend.  The purchasing files will only get you part of the answer.  The next straw that is usually grabbed is to say that the ‘accounts payable records’ will give the whole picture.  These will certainly get you more than the 30% procurement controlled spend but again still not the full 50%.  What about expense claims, petty cash or corporate credit cards?  All these are avenues by which money leaves the business to third parties.

Is this lack of clarity something to be concerned about you ask, our people are all ethical and operating in the best interests of the company!  The key question is whether all the spend is being optimised, are you getting the best deal for all the dollars you are spending?  Often the buying of the same goods and services is spread over several suppliers or products that are very similar are purchased separately again diluting the companies purchasing power.

So what to do about it!  A process called “Spend Mapping” can help bring some clarity to where the company’s money is going and whether there are opportunities to aggregate spend to get a better deal. A Spend Mapping project will go through the following stages:

Spend Analysis Step Step Detail
1. Identify
  • Search   all sources of information on where the organisation’s money is going:
  • Purchasing   Data – Payables Data – Purchasing Cards
  • Petty   Cash Vouchers – Expense Claims – Etc
2. Gather
  • Create   a single ‘database’ of information in common format (Take care as each source will come in a   different format)
3. Cleanse
  • Correct   errors, remove duplications, standardise descriptions and Units of Measure
4. Group
  • E.g.   Purchases from IBM, IBM Corp and Cognos are in fact the same company
5. Categorise
  • Find   a method to Categorise such as UNSPSC (www.unspsc.org)   , eCl@ss (www.eclass.de) or custom   developed. Avoid too broad groups such as ‘Travel’ or ‘Office Supplies’
6. Analyse
  • Basic   question; “Are you getting the best deal?”, is all spend under contract, are   only approved suppliers used, is there ‘rogue’ spend, are there Benchmarks?
7. Repeat
  • Continuous   improvement

Once you have developed this information you are ready for the next stage – Developing sourcing strategies for each of the categories you have identified.  And of course tightening internal controls if not all the dollars are going where you would want them to!

Andrew Downard is a Supply Chain consultant and Mindshop facilitator who specialises in helping clients realise the opportunities that are available in their Supply Chain, Logistics and Procurement activities.

3 Key Ideas for Success for Business Leaders in 2014

1. If 20% of your revenue in 5 years time had to come from a product or service that didn’t currently exist, what would that be? This was a great question posed recently by experienced Mindshop facilitator, Russell Cummings to drive increased energy and innovation into organizations. A great way to trigger new thinking as part of your strategic planning activities for 2014.

ExpressDelivery2. Growth = Capability and Capacity. Many organizations focus ONLY on sales / marketing when seeking to grow their organization which is a logical path to take. However two aspects overlooked which can block a successful sales / marketing campaign is a lack of capacity to deliver on the new work that has been won or the capability to deliver a quality outcome that will hold customers over the long-term. So when going for growth in your organization ensure you first check whether you have the capacity and capability to achieve our growth targets. There is no point putting more business through an incapable system.

3. What would Apple do? While the cliché of Apple and Google examples of business best practice can sometimes wear thin on many leaders this question posed recently by innovation consultant Dr Amantha Imber got a lot of people thinking. Reflecting on your own products / services if you put yourselves in the shoes of a leading design team at ‘Apple’ who would they change about your product or service? A great way to challenge your team to think outside the box.