Monthly Archives: January 2009

Build Your Credibility Too in 20 Minutes a Day

Not only can you increase your chances of success in 2009 in 20 minutes a day (see parts I and II), but you can also increase your credibility as well. As a recent article in e-Side Supply Management that outlines 10 Credibility-Building Tactics points out, it doesn’t take much to undermine your credibility in the workplace — and more often than not, you won’t even realize you’re doing it. But not only can you make a number of quick and easy changes to re-establish your credibility, you can also take pride in the fact that these quick and easy changes will build your credibility as well.

  • Think, don’t Feel
    Decision making should center on facts and trade-offs, not emotion. Think, don’t feel.
  • Sit at the Table
    Otherwise, you’ll never be viewed as an equal.
  • Don’t Apologize for Everything
    If you did what you thought was right for the company and did your best, you have nothing to apologize for. And you definitely shouldn’t apologize for meaningless minutia. Font too small? Chart too busy? Who Cares!
  • Don’t Be the Hired Help
    There’s being helpful and supportive … and then there’s being the maid or the administrative assistant. If that’s your job — great. But if it’s not, think twice about always volunteering for the meaningless minutia.
  • Attack the Issue, Not the Person
    If you disagree with something, do your best to identify the issue or the behavior without labeling an individual or group as responsible for it. State that the reports are useless, not that the creators are careless or haphazard, for example. And remember that even sometimes the smartest person will have the dumbest idea you ever heard. (And sometimes even on purpose … because we know that if we can’t come up with anything good, it’s often the worst idea that we can contrive that will inspire you to come up with something that is truly great.)
  • Use unequivocal language.
    No one likes a cowardly pussy-footer. And definitely don’t use language that leaves others with the impression there is a choice when there really isn’t. If your current supplier is inept, don’t say “we should consider whether we want to change suppliers”, say “we need to change suppliers now”.
  • Keep Your Inside Voice Inside
    Although it’s constructive to identify all of the risks associated with a various course of action before you make a decision, once you make a decision, don’t constantly fret about it. All you’ll do is wear everyone down.
  • If You Must Be Late, Don’t Be Disruptive
    Don’t add to the disruption of being late by offering an explanation, and definitely don’t ask to be brought up to speed. If your boss really needs to know why you’re late, wait until after the meeting and have the conversation offline.
  • Avoid Filler Words, Phrases, and D’Oh!
    Useless words such as “so,” “you know,” “anyway,” “um” and “er” that contribute no meaningful information will cause your audience to tune out, or, even worse, break out their “filler-word bingo” cards. Either way, the most you’ll be is amusement.
  • If You Don’t Know, Ask.
    No one knows everything, and no one with more than two active brain cells would expect you to. So don’t be afraid to ask once in a while … after all, the best way to be taken seriously is to ask some good, well thought out questions.

Even in Night, Procurement Shines Bright

The Winter Edition of CPO Agenda had a great article on how stand-out procurement functions are continuing to extend their reach and value despite volatile market conditions. In How the Stars Shine Brighter, the authors reviewed the 2008 Assessment of Excellence in Procurement from A.T. Kearney (AEP) that surveyed and benchmarked almost 500 respondents against their industry and geographic peer groups as well as best-in-class companies.

The study identified three key trends from leading procurement practices that can be directly linked to the attainment of sustainable competitive advantage:

  • Leaders achieve a broader mandate to drive change,
  • Leaders develop dynamic new value-creation strategies to satisfy ever-increasing customer demands, and
  • Leaders continue to develop and maintain robust enabling capabilities in performance management, knowledge and information management, and human resources management.

Leaders Drive Change

In direct materials leaders typically control two-thirds of external expenditure — twice that of the average firm. In indirect materials, the proportion is 73% for leaders, 42% for followers. By addressing a larger portion of the total corporate spend, leaders are yielding overall procurement-related savings that are 2.3 times greater than the followers. For a $20 billion company that could represent a 21% advantage in earnings per share versus its competition.

How do they do this? They:

  • Align with Corporate Strategy
    The CPO maintains a close relationship with senior management to help him or her align procurement strategies with the overall corporate strategy.
  • Refine the Organizational Structure
    Today’s procurement organizations frequently follow a center-led model that features common policies, approaches and practices for purchasing company-wide.
  • Increase Strategic Focus
    Leaders focus on strategic initiatives, not transactional activities that are best left to automated systems.

Leaders Develop New Value-Creation Strategies

Leaders go above and beyond the basics, initiate supplier collaboration, and differentiate themselves through superior approaches to risk management, best-cost country sourcing, and sustainability. They

  • Take Sourcing Practices to New Heights
    Leaders take a highly systematic approach to the application of traditional sourcing strategies, including volume concentration, best-price evaluation and global sourcing, as well as more relationship-orientated approaches such as product specification and joint process improvement, and relationship restructuring. Leaders also create value by using sourcing and category management methods such as innovation network leveraging, product “teardown” (a common method of analysing competitors’ products), collaborative cost reduction, expressive bidding and price benchmarking, to name but a few, to a far greater extent than followers. As a result, they attain higher levels of cost savings and value.
  • Drive Supplier Collaboration and Innovation
    Leaders are redefining boundaries and reaping the benefits of true partnerships, such as more product and service innovation and faster time to market.
  • Unlock Value through Risk Management
    The majority of leaders systematically use internal risk mitigation strategies to ensure supply continuity, develop category management contingency plans, align supply security with their overall business risk tolerance goals, and define, measure and track risk management and supply chain key performance indicators (KPIs).
  • Source from Emerging Markets
    Leaders arrive to the party early, while the savings buffet is full and plentiful. Leaders demonstrate that potential obstacles around emerging market sourcing can be overcome by actively engaging with and investing in suppliers. The ability to manage risk — through supplier process auditing, process risk assessment, high-quality data reporting and analysis, and the placement of key procurement executives in offshore locations — gives the leaders confidence that their emerging market sourcing activities will bring cost improvements without introducing excess risk.
  • Follow Sustainability and Corporate Social Responsibility Best Practices
    Finding the right balance between economic viability, environmental awareness and social well-being is a significant challenge, but a competitive advantage can be gained by companies that locate intersection points for all three. Sustainability leaders are differentiating themselves in a number of ways, be it through reductions in energy use and waste, taking on a holistic, future-orientated focus, or extending sustainability outward to the extended enterprise.

Leaders Employ Robust Enabling Capabilities

Leaders measure actual benefits, perform audits of procurement benefits, examine the function’s impact on profit and loss, and track productivity performance indicators. Leaders

  • Employ Best-of-Breed Technology
    Leaders have taken spend visibility to the next level, linking systems to product development and product lifecycle management tools to further improve control and influence procurement decisions earlier in the design and decision-making process. Leaders are improving their business intelligence capabilities with respect to spend management, using techniques such as predictive modeling at a much faster rate than followers. And leaders hold, on average, more than five e-sourcing events per business day — a rate four times greater than that of the followers.
  • Win the Fierce Battle for Talent
    Leaders realise that continued success depends on their ability to attract and retain the right people.

Help! I’m Out of Content! What Do I Do Now? (Part II)

Last week, not being able to imagine what it would be like to be out of content, I culled a top 15 list of ideas of what to do from my fellow bloggers. Some were good. Some were not. But the one commonality they all had was that, for the most part, they just weren’t that entertaining. If you’re going to take the info out of infotainment, you should at least leave the entertainment. So today, I’m going to outline ten great ideas that you can use to entertain your readership if you’re truly out of content.

10. Why Mac is Better than Windows
Why should you be left out of the technology holy war when you can choose to be a crusader for the side of light, peering through an image of a shiny apple. And now that a Mac is about to displace PC from the oval office, what better time is there?

9. Do a Long Rant on Why Beautiful People are Far More Successful
Don’t forget to point out that all of the movie stars, tv stars, pop stars, media moguls, etc. are all smashingly good looking and seemingly devoid of talent and that it’s totally unfair because a smart, intelligent, hard working average-looking lout like yourself can never catch a break. After all, everyone loves a self-loathing blogger who can’t stop feeling sorry for himself.

8. Explain Why Dumb Ideas are Great For Business
You can take the classic tack that “without dumb ideas, we’d never know what was a good idea because we have nothing to explain it to“, point out that Donald Trump believes that you should always bring ten new ideas to a meeting without worrying about if they’re good or not because the resulting discussion leads to brainstorming as a team that will communally select, and refine, the best idea into a winner, and that sometimes the ideas that sound the dumbest at first are actually the brightest because they are the ideas that reshape business as we know it. But that would be boring. So instead, take a more controversial approach that argues that consumers are dumb as a doorstop and that it’s not worth wasting valuable smart ideas on them … and watch your comment count soar!

7. Run a Variation of Clifford Pickover’s Classic ESP Experiment
The classic experiment can be found on the University of Wisconsin-Madison Physics Web-Site which is described in Dreaming the Future. Run it and tell your readers you’ve built a psychic AI. See how many fall for the gag.

6. The Ten Most Entertaining Ways to Mess Up a Colleague’s Computer
Don’t just go for the old standbys of taking a screenshot of the desktop to use as the default wallpaper after all the icons have been deleted, of randomly renaming all the files using a combination of the words in the set {sexy, naked, nubile, cute, girl, boy, etc.} and a standard image file extension from the set {jpg, gif, tiff, etc.}, or of changing all the default sounds to those of barnyard animals so it moos, quacks, and barks every time the user performs an action … get creative. Talk about how to set up scheduled tasks that randomly play hidden sound files that ask the user to “press my keys”, “boot my hard drive”, and “plug into my port” in a very sexy voice at random intervals or how to set-up a remote access program that will allow you to login from your office, freeze local access, and bring up a command window that will display whatever you want so you can tell the user “this computer has gained sentience and is now scanning for a suitable android body to download into so it can enslave humanity … please stand by”. Remember, it’s all about the shock factor.

5. Pick a Top 10 YouTube Video and Explain Why It’s A Brilliant Piece of Art
Take Lezberado: Revenge Fantasies, one of the all-time top-viewed videos on YouTube. After all, any video that uses the “O” word while talking about the “L” word must be on the down-LO and ultra-cool. Who cares if you can’t even focus on what the narrator is saying after 30 seconds because it’s so damn boring and stupid … it’s a top ten all time YouTube video … it must be awesome. After all, it has a cat in it for a few seconds. And we all love LoLCats. After all, I Can Has Cheezburger?

4. Pick a new Web 2.0 Startup and Explain How It’s Going to be the Next Google
Hundreds of “Web 2.0” startups hit the web every month, most of which only have one little offering that, like Twitter, only do one thing that is of *very* limited use. Go to Go2Web20.Net, pick a random company, like GazoPa (the more non-sensical the name, the better) that finds similar images, and explain why this is absolutely vital and that the world will end if this technology doesn’t become mainstream! (After all, we couldn’t go on if we couldn’t find similar images automatically.)

3. Find Historical Parallels that Don’t Really Make Any Sense
Take the current economic situation. You could argue that excessive tax rates are only exacerbating the current economic crisis, and that since the average total tax and debt burden of the average American citizen is far greater than the tax burden of the average citizen when Ancient Greece fell, the US is doomed. But that’s been done to death. What you need to do is find a parallel between the conflicts between the Persians and their Medes neighbors in the ancient Assyrian empire and draw parallels between the modern conflict between Israel and Palestine and then argue how it’s going to bring down the entire Middle East, just as the Assyrian empire faded into the books of history.

2. Find Some Way To Discover a New Message in Some Old Poem
Take a classic like “Mending Wall” by Robert Frost and how it was really a subtle attempt to convince his neighbor to build a bigger fence because his neighbor’s dog kept escaping into his yard. The less sense the interpretation makes, the better.

1. Crab People Are Going to Take Over the World
South Park tried to subtly warn us, but we didn’t listen. Now crab people, who are an evolved form of the giant coconut crab that can communicate telepathically across great distances, are seeing a great resurgence in numbers thanks to global warming which is creating the tropical weather in the South Seas that they need to rapidly reproduce, and they are preparing to take over the world. You have been warned!

Dead Company V: More Ways to Avoid the GraveYard

In our last post, we talked about twelve smart things a smart company could do to avoid the graveyard that many of its dumb company peers are heading too in this down economy. Today, we’re going to talk about ten more smart things a smart company can do, courtesy of Christopher Lockhead who guest-posted ten essential strategies for weathering the economic storm on Dan Farber’s Outside the Lines CNet blog (and one really dumb strategy, that I exposed in Dead Company II, so we’ll skip it).

  • When you really screw up, fixing it will take longer than you think it will.
    Much longer. So heed good advice and don’t screw up!
  • Get the Facts Yourself
    If you’ve got a problem, you need to get to the heart of it fast, and fix it. Real leaders get real facts and take real actions.
  • Get 2 Top 10 Lists
    Gather the smartest, most courageous people in the company to brainstorm the top 10 ways to drive revenue and the top 10 ways to cut costs. For example, to drive revenue you could assign every promising deal in the pipeline to an executive, focus on core markets first, and design a competitive replacement program. To cut-cost you could pull out of under-performing verticals, sell under-performing assets, and stop all stupid travel, off-sites, and trade-shows. (After all, your money is much better spent on Sourcing Innovation.)
  • Tear off the Band-Aid
    Assume the worst and take the necessary action to turn the situation around.
  • Fire Executives
    If you need to reduce head-count, don’t cut the people who actually do the work. As I’ve reminded you again and again, marketing and new product development are your salvation, so don’t cut them — reduce the top-heavy C-suite instead.
  • Chop the Dead Wood
    Every company has underperforming ‘C’ players, especially on the sales team. Take the opportunity to eliminate the worst performers and make the ‘A’ and ‘B’ players happy in the process — no one wants the ‘C’ players around anyway. After all, the money is better spent on additional training for the ‘A’ and ‘B’ players to help them identify ways to find even more cost savings for you.
  • Tell the Truth
    Some executives think that lying, misleading, and otherwise obfuscating will “soften” the blow in bad times. Wrong! If you have to chop the deadwood, kill the entertainment budget, and reign in the travel and training budgets for a few quarters, be honest — brutally honest. Otherwise, you’ll lose all respect, the ‘A’ and ‘B’ players you kept will start looking for a new job, and you might just end-up in jail if you mislead the stakeholders.
  • Communicate Clearly and Powerfully
    The truth is never as bad as rumors that start with a “No Comment”. Deliver the truth, and also the actions you’re taking to improve the situation.
  • Sign a Pact in Blood
    Stick to your guns and don’t waiver, no matter what.
  • Drive It Like You Stole It
    Legendary teams execute their turnaround plans like it is the last thing they will ever do. Take action. Bust your butt. Get on planes and meet with all of you key customers. Rally your teams in town hall meetings in all of your key offices. Refine your strategy. Focus your efforts. Get your people focused on results. Meet with your top investors to tell them how and why your turn around will work. Get help from some wicked advisers. Recruit new talent to the company. Sell, sell, sell, and lead, lead, lead.

A Great Guide to Outsourcing Risk Management, Part III

In Part I we we discussed the starting point of your outsourcing project and how you go about selecting service providers to issue RFPs to and in Part II we discussed proposal evaluation. Today we will discuss the contract, and the dispute resolution process in particular, and remind you to check out the full series on outsourcing risk management by Alsbridge, as printed by, that this series is partially based on.

So What Needs to Be In the Contract?

Lots and lots of legalese, of course, and I highly recommend you check out Stephen’s Guth Vendor Management Office Blog and the books and downloads he has indexed on his site (including The Contract Negotiation Handbook and Implementing a Vendor Management Office) before you start. That being said, there are two critical sections that must be in every outsourcing contract, and that must be carefully thought out and specified in detail before the contract is signed if you really want to alleviate potential risks, and they are dispute resolution and service level agreements.

So What Do You Need With Respect to Dispute Resolution?

Remember, if there is a disagreement between two parties, the time to figure out how to discuss and resolve it equitably is not in the midst of the disagreement. That’s why the rules for boxing matches are set in advance rather than discussed after one fighter has already tried to bite the other’s ear off. Making the process as defined and clinical as possible will remove tension from disagreements, especially when things must be escalated and your counterpart is angling for your ear. Be sure that each of the following questions are answered in your agreement before the agreement is signed.

  • What is the process for raising an issue?
    This must be spelled out, or the other party can claim that they were not aware of an issue, and hence under no obligation to take any action.
  • How long does each side get to investigate and formulate a reply?

    The party being notified of an issue must have a set timeframe in which they have to formulate a reply, otherwise, they can stall indefinitely with “we’re looking into it”.
  • If the issue is not resolved, who meets?

    The project managers? Subject matter experts? Mangers? Executives?
  • When?

    The meetings to resolve issues, and resulting disputes, can be ad-hoc or regularly scheduled, but there must be a maximum timeframe that can elapse without a meeting being when there is an issue to resolve or there is nothing to prevent one party from stalling the other indefinitely.
  • Does the timeline vary based on issue size?

    If one party discovers the issue to be larger than originally thought, is an additional fixed time allotted for further investigation or resolution?
  • When does an issue become a dispute?
    After an unsuccessful meeting? After 7 days without resolution? This must be clearly defined.
  • What clear authority does each party have to negotiate?

    This must be clearly defined so that the right people are at the table for issue, and dispute, resolution meetings. Otherwise, the other party can claim that their representative had no authority to negotiate on their behalf and stall a negotiation indefinitely. The contract should also stipulate what authority project managers have to resolve issues and disputes. For example, sometimes a few extra hours of work on behalf of one party or the other, even if they have to be off-the-record, can go a long way to resolving problems and building a rapport that is invaluable to team success. For example, if a project was supposed to take eight weeks, but at the end of eight weeks, three days of work is left, is it really worth a dispute? Or can the project managers for each party decide to just “split the difference” to get it done and move on.
  • How long do the authorities have to get to the table?

    If a dispute arises, how long do parties with the authority to resolve it have to get to the table.
  • If no agreement is reached, when can the issue be escalated?

    There’s always a good chance that a dispute will arise that cannot resolved amicably between the parties at the table in a reasonable timeframe, so it must be crystal clear when a party can request that the problem be escalated within their counterpart’s organization.
  • What triggers arbitration or legal action?

    Although everyone hopes it won’t happen, some disputes will not be resolved even when the CEOs make it to the table. Therefore, the agreement must clearly spell out when a party can request arbitration or resort to legal action if it was clearly damaged by an action, or inaction, of the other party.

The next post in the series will discuss service level agreements.