Daily Archives: April 26, 2011

So You Don’t Think Open Communication Is Important?

Okay then. Your peers who do will show a return on assets six times higher than your company achieves. If you don’t want to make the case for an open communication culture, then your chances of creating customer loyalty top out at 64% compared to your peers. And since a 5% increase in loyalty creates a 25% to 95% profit increase, can you really afford to be losing 36% of potential loyalty? Think about it.

So what is an open communication culture? It’s one in which information flows freely and is easily accessible to both insiders and to the public at large. And, consistent with the culture and values of the organization, its leadership enables, advocates and provides open access to information in which employees, customers, shareholders and the general public have a legitimate interest. Pretty straight-forward, eh? So why don’t you have one?

Pierre Mitchell on The Hackett Group Best Practices Conference

Today’s guest post is from Pierre Mitchell, Director, Procurement Research and Advisory for The Hackett Group.

the doctor is coming to our annual best practices conference in Atlanta in a couple of weeks (May 11-12) and wanted me to say a few words about it. He is doing this on his own nickel, which is appropriate since the Canadian nickel has a beaver on the back, and the beaver is nature’s engineer (which many an MIT alumn has pointed out to me), and Michael is an engineer. More importantly though, I really applaud the bloggers who get out there and press the flesh as much as the keyboard keys!

Anyway, I really love the event which is held every year in Atlanta at the Intercontinental Buckhead hotel. Our website has all the official marketing about the event, but what I really like about it is not only the chance to reconnect with our Procurement Executive Advisory Program clients at our CPO summit the day before and at the event proper, but also the cross functional nature of it. Don’t get me wrong, dressing up for Procurement-only black-tie events can be fun, and vendor-sponsored golf events can provide welcome respite from the typical CPO workweek insanity, but this is the only executive forum (majority of the hundreds of our conference attendees are VP level and above) I’ve seen that is cross-functional in nature. Many of our Procurement clients remark how it’s nice to see other functions like IT, Finance, HR, Shared Services, etc., also going through the same set of issues. Hasbro‘s CIO Denise Clark will talk about agility and service excellence, communications, governance, metrics and more. Procurement leads a very similar life to IT (although the internal buyer-supplier relationship is not always ‘optimal’).

We do have some great Procurement speakers. Christie Breves, CPO at Alcoa, will discuss the evolving role of procurement at Alcoa and how it contributes to the broader enterprise, especially with its integrated team of procurement and business unit members that helped it quickly respond to the economic downturn. Rick Wertsching, VP Sourcing & Procurement, The Walt Disney Company, will discuss Disney’s results and lessons learned in category management, global sourcing and global operations. Thomson Reuters‘ will be talking about how they optimized sourcing, real estate and facilities, accounting and transaction operations within their Global Business Services (GBS) organization. Air Products, will talk about their experiences on both the sell-side and P2P side. Finally, Chris Sawchuk and myself will be featuring some of our latest Procurement insights from recent research and our latest benchmark data cut.

The big themes for the conference will be agility (as antidote to volatility) and global service delivery:

  • Solo Cup will talk about its ‘next generation’ Integrated Business Planning (IBP) process and moving finance from “reporting” numbers to “making” numbers. In response to rising commodity costs, the company’s management team developed IBP to provide a more robust planning capability than we typically see — especially between Procurement and Finance.
  • Kohler will discuss how to go from multinational to global and balancing need for global vs. forces driving local customization, including the evolving role of the finance organization — from transaction provider to strategic business enabler. Procurement must similarly “mass customize” its processes in both sourcing and in P2P.
  • Michael Bordoni, VP Finance Strategy & Transformation at HP, is a top-rated returning speaker to discuss HP’s journey to world-class finance performance. He will address process design and sourcing, technology and automation, skills and talent, governance and organization — including the use of global business service centers and centers of excellence.
  • Not to be outdone, Dell will also discuss their EPM (enterprise performance management) journey and their fundamental shift from country-based segmentation to one aligned with global customers and products.
  • Unilever will focus on its interesting “global operating model” and how the company delivers based on a model that is being “designed in the East” and “transported to the West”.

While there’s nothing like actually being there, I’m sure Michael will write up some good insights to share back with the blogosphere. If you do make it down though, I look forward to seeing you!

Thanks, Pierre!