Category Archives: Best Practices

When Was The Last Time You Did A Full Audit Of Your Supply Chain!

When a single event puts over 25T of global trade in jeopardy, or about 20% of Global GDP, you know you need a full end-to-end understanding of your critical supply chain.

The event I’m talking about is the 2026 US-Iran War that saw the Strait of Hormuz closed.

1. Global trade in goods and services is about 35% in US Dollars.
2. 80% to 90% of all traded goods move by ship through canals, straits, seas, and oceans.
3. About 8% of maritime trade by volume passes through the Strait of Hormuz.

Do the math, and it’s easy to see that the blockage / closure of the Strait puts over 25T of global trade in jeopardy, because wars in the Middle East tend to drag out for years!

The world was not ready for this. (They thought the US would never risk a war with Iran because of that … especially when the US could have continued last year’s strategy of just bombing uranium enrichment sites once per year as they neared completion and prevented Iran from ever reaching nuclear potential that way.)

Most company’s supply chains were even less ready — especially since some sectors saw way more than 20% impact, especially when it’s (one of) the largest trade route(s) for certain products like LNG (20%+/-), (crude) oil/petroleum (25%+/-), fertilizers (33%+/-), and sulfurs (50%+/-). Multi-national businesses without alternate sources or routes at their immediate disposal were put in instant financial jeopardy (and risk of bankruptcy)

As a result, you need more than supply chain visibility, you need full end-to-end supply chain awareness for all critical product lines, and that requires a full audit. You need to know where everything is coming from, what routes it’s taking to get to you, what alternatives exist (and to what extent — can you replace all, part or none), and what financial impact its disappearance would entail.

Even if you can get it at a reasonable price, supply chain insurance isn’t going to be enough anymore. As with any insurance, there will be exclusions for war, terrorism, etc. unless you pay astronomical prices, conflict zones will be excluded, and when a disaster wipes out an area and affects many clients at once, payouts won’t be quick and you can expect a massive amount of paperwork and effort will be required to get one (as the insurer won’t have enough cash on hand and will have to delay and delay until they can liquidate assets, which is difficult to do in crashing markets that result from economic disasters).

When something happens, you need to be able to react, reroute, and reorder quick. That will require not only deep visibility, but pre-defined mitigation plans when key regions, routes, or resources are impacted. The only way you will know this is if you do a full audit and associate each product to (sub-tier) suppliers, locations, countries/zones, and routes. That way, when a critical event (is likely to) happen(s), you can immediately identify the affected parties, locations, routes and associated products, and determine what you need to do in order to ensure continued supply. It might be switching plants, distribution routes and methods, or even suppliers.

If you haven’t done a supply chain audit in a few years, or ever, you should do one ASAP. You don’t want to be caught off guard when the next major disruption happens!

So, You Didn’t Succession Plan — What Do You Do Now?

Back when SI first started talking about talent in year one, we noted that the most important thing you need to do is succession plan — because even if you do everything right, acquire and keep the right talent, and thrive … it will all come to an end when the talent gets lured away, retires, or dies (and it does happen).

You see, if you succession planned, you would have done a number of things that, frankly, you should have started 20 years ago (if you were in business then), or the year you started (if you weren’t).

1. Captured their knowledge from day one

You would have acquired a KMS (Knowledge Management System) and started capturing their knowledge from day one. Even if it’s not directly tied to the systems they use, you’d at least be capturing key knowledge that your junior people don’t have.

2. Captured key artifacts from day one

Furthermore, as time went on, you’d acquire systems for all of their major tasks and ensure that all of the key steps were done online in those systems. No bypasses allowed. Sure, how they made the decisions would be in their head, at least to the extent it’s not captured in the KMS, but all the steps, and artifacts would be there for whomever comes next.

3. Identified at least one internal successor for each critical resource and have that individual mentored by the critical resource ASAP

So that, even if the potential successor isn’t ready for a senior role when the critical resource is no longer available, at least you’ll have retained some of the knowledge, some of the artifacts, and some of the capability. And if you can find a suitable replacement externally quickly, that person will be much more effective as they’ll have a capable right hand resource, artifacts, and knowledge.

But you didn’t do any of this. So what do you do?

Well, first take Wouk’s advice and get it out of your system:

When in danger or in doubt,
Run in circles, scream and shout

Second, identify and acquire a suitable successor as soon as possible, even though it could be costly. You need someone suitable who’s ready, not half ready.

Third, you need to acquire the expertise and systems to jump start the replacement.

  1. Get a KMS ASAP. Don’t make the same mistake again.
  2. Acquire systems that will be used to automate key functions, as well as capture, store, and index all the key artifacts for quick look up that are needed to execute them — no disconnected email, documents on various cloud drives and untracked laptops, or other haphazard solutions.
  3. Hire expert consultants who are former practitioners to help populate that KMS with key knowledge and execution systems with templates and as much process knowledge as those systems can hold.

You’ll still have a rough time sailing choppy seas … but you might not sink if you start on the right track now. No guarantees, but it’s likely your only chance. The Age of AI Hype has proven dumb systems and inexperienced kids can’t do the jobs of senior talent, and since you forced so much of that talent into early retirement with your AI BS, you’re in trouble if you can’t retain a few grey hairs and start training the next generations to take over now.

All Good Plans Have This in Common!

There’s a number of things all good plans have in common, but one often overlooked aspect is one emphasized by Garry Mansell in his scaling plan is real post.

According to Garry, he can always tell within ten (10) minutes whether or not a scaling plan is real. Not because he’s clever, but because real plans have a particular smell to them … they acknowledge constraints. They name trade-offs. They make it obvious what will be sacrificed, and when.

And he’s right — because if a plan is frictionless, it’s not a plan. It’s a fantasy (and likely even worse than your RFP Fantasy). And many of these fantasies, as Garry points out, are immediately identifiable from their assumptions that everything is possible, nothing has a cost, everything is assumed to be easy, integration is assumed to be smooth, customers are expected to behave, and cash is assumed to cooperate. Anyone who’s been though a real startup knows that NONE of this is the case!

A real plan not only acknowledges constraints, but contains sentences about the harsh reality that are uncomfortable, sometimes very uncomfortable, to say out loud — especially for executives who believe that “leadership” is always maintaining positivity and exuberance. But the reality is that there are always risks, and if you’re trying to start something new, or grow considerably, there will be lots of big risks. And if you don’t acknowledge them, do what you can to mitigate them, and be prepared to work through, or at least around them, you won’t succeed.

This should not be a surprise, because, as Paul Martyn will be quick to point out, and I will be quick to echo, if you don’t acknowledge, and capture, your real constraints in your scenario analysis, you will not succeed. And if the most import constraint is left unspoken, other unspoken constraints will be implicitly captured in the constraints and costs that do get modelled, and the outcome will be determined before the first scenario is run. That’s not success, that’s doing everything possible to protect the status quo.

And you won’t scale anything that way!

Success is in the Diary — and the Details … especially in Procurement!

Garry Mansell recently wrote an interesting post on how to understand how a scaling business is really run that had some really good insight on how you build for success versus how you pretend to.

According to Garry — the diary tells you whether the business is scaling, or not. A business that is truly scaling has:

  • a diary that is light — it’s not filled with back-to-back-to-back meetings … it has time for people to work (and think) and allows people to make the day-to-day decisions necessary to function
  • a diary that doesn’t have repeating meetings that just discuss the same thing in an infinity loop that continually eats up revenue
  • a diary that sees the CEO focused external is focused on building and scaling

And for the most part, he’s right. Except, as both an IT and a Procurement professional, I can tell you it’s critical:

  • to have regular stand-up/check-in meetings in Dev, especially if you’re using an Agile framework — but these all-team recurring meetings are scheduled to be as short as necessary, and they don’t waste time on detailed status reports, but where things are, who’s waiting on what, what issues have arisen, and who can deal with them … and as soon as all issues are discussed, you get back to work
  • in Procurement, you need the same series of meetings for every strategic sourcing event, you need regular check in with Risk Management to track ongoing risks, and you need regular team check-ins to ensure all projects are progressing and resources are allocated properly … but in the first case, they are predefined by the process, only include the necessary reps from each stakeholder group, and held when needed — not weekly meetings; in the second, only issues that have arised or change status are discussed; and in the third, when the situation is understood, the meeting is ended, cut short as much as possible

In other words, there are a number of meetings you can’t get rid of, but you can minimize them and adopt practices to minimize their length, schedule them short, and end them when the necessary information has been exchanged and/or decisions reached. So it’s both the diary … and the details!

There’s NO Faster Path to a Markdown than “Growth At All Costs”!

THE PROPHET is bemoaning the start of markdowns in private equity when he should be happy (as a former investor) they took this long to happen, especially when the reality is that these markdowns are going to start coming fast and furious in any firm that wants to still be around by the end of the decade.

This is because most of their portfolios in Software, and FinTech/ProcureTech software in particular, have been pursuing growth at all costs as a result of:

  • the insane valuations during COVID for FinTech/ProcureTech that helped companies buy and pay online
  • the insane valuations during the current AI-HYPE for any company that could convince the investors they had a unique AI capability (even if it was just a clod or chat, j’ai pété wrapper)

… which has resulted in unreasonable, and practically unachievable, sales and growth targets being placed on them which they will not reach, especially in a flat, or down, market for software purchases as a result of the AI price squeeze (since “AI” offerings are currently cheap with the big firms underpricing compute costs to try and hook clients, even though it’s costing those firms Billions).

But as Garry Mansell, one of the Godfathers of Modern Procurement, has so eloquently explained in his can of worms post, growth at all costs is equivalent to self-sabotage. That’s because it comes laden with fallacies, traps, and brand value destruction!

Garry points out the three biggest harms we see every single time.

  1. Quarterly Earnings Trap: with the constant pressure to reach unreasonable, if not unobtainable, sales targets, it becomes all about delivering good news on the quarterly earnings call (whether to the public or the PE firm); it all boils down to revenue and cash in the bank, and sales teams are told to hit targets by any means necessary, including, but not limited to, deal-making, over-promising, and grand assurances the solution will solve that problem without any plan to ensure it will do just that once the deal is signed; this leads to unhappy customers when the implementation will take a year (vs. the three months they expected), the expected enhancement needed to solve that problem is pushed two years down the roadmap, and the customer support is non-existent (because all the support reps were fired to fund increases in the S&M budget to try and hit the insane targets)
  2. Heavy Discounting Fallacy: because it will get “not ready” or “likely to go with a competitor” customers over the line and get the deal in the door; first of all, it doesn’t always happen (as some customers see through it and then spot the “we have the right to reprice on a quarterly basis if your user base goes up, and we get to use LinkedIn growth metrics to do so” clause where, even if you hired a dozen janitors for your new office building or 50 fleet drivers for your new private fleet who never use the system, you will be charged for them anyway); secondly, even if it does, given that the smart ones know the old adage “you get what you pay for” is true, if they didn’t pay much, they will believe it’s not worth much and not put in the hard work that’s required on their end for a successful implementation (especially since they also know you can’t afford to, and thus won’t, support them at that price); third, voices carry, word gets out you’re cutting quotes 80% to 90%, and suddenly everyone knows (or at least assumes) you’re doing massive mark-ups with the sole intent of getting whatever you can (and not what the tech, and the IP contained within, is really worth — as you’ve just devalued the IP to the floor)
  3. Shelfware is the Reputation Killer that Keeps On Killing: Good software that generates value for a valued client that uses it daily is the gift that keeps on giving because a happy client, as long as you keep your prices fair, never goes away; but shelfware is the villain that keeps on striking at your darkest hour as that unhappy client will never tire telling people how you are robbing them blind in a contract they can’t get out of for software they aren’t using …

As Garry has said repeatedly, which SI has echoed repeatedly (while giving you a simple relative corporate debt equation to help you calculate how likely that vendor is pursuing growth at all costs, and, thus, likely to screw you [whether they intend to or not]), the only true growth is controlled growth with ready-clients at a sustainable year-over-year rate that allows all customers to be served to expected levels of service, all new employees to be adequately trained before being thrust into critical customer-facing roles, and all current employees to get the regular time off they need to prevent burn-out.

And, as Garry has also pointed out, where the model incentivizes utilization and renewal over implementation and sale, where every member of the organization is incentivized on those metrics, where the sales person doesn’t get a dime of commission until go-live and where the full commission depends on adoption and renewal, that’s where you will see success. (In other words, the sales person should NOT be happy if the client isn’t. That’s one of the best ways to de-incentivize bad deals — what salesperson is going to bend over backwards and/or pull every dirty trick in the book to get a deal he’ll never see a dime of commission on?)