E-I-E-I … E

Dalip Raheja of The Mpower Group recently ran a piece here on Sourcing Innovation on how Old MacDonald Was Right — It Is About E-I-E-I-O when it comes to successful supply chains. And when it comes to performance, he’s right — it’s all about Adoption, Execution, Implementation, Optimization, and Utilization.

But when it comes to attracting, retaining, and growing talent, you have to really focus on creating the optimal work environment. According to a recent piece in Industry week, when “hiring and retaining talent”, it’s all about the three E’s: Experience, Exposure, and Education because employees need

  • challenging assignments that allow them to develop new skills,
  • opportunities to expand their network inside and outside of the organization to continue learning, and
  • classes and mentoring to improve and gain new skills.

And the author is right. If your employees aren’t engaged, exposed, and enlightened, they won’t be energized by your organization. That means your stars will leave, and once high performers see their peers leaving, they won’t be very interested in joining.

However, it’s not the perfect recipe for an attractive environment as it misses two other key features of attractive work environments: Innovation and Inovlvement. Superstars want to innovate and build new products and solutions that make your customers’ lives better and they want to be involved in all aspects of the process from contemplation through design, development, and delivery. And they want to be informed when something happens good or bad (and asked for feedback). The don’t like a closed-door need-to-know environment and won’t stand for it. The want their E – I – E – I – E.

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Cultural Intelligence III: A Foundation for Cultural Intelligence

This series is edited by Dick Locke, SI’s resident expert on International Trade, author of “Global Supply Management — A Guide to International Procurement” (which was the definitive guide for almost a decade), and President of the Global Procurement Group and Global Supply Training which regularly gives seminars on International Trade and working with International Cultures.

As per Wikipedia, cultural intelligence, also knows as cultural quotient or CQ, is a theory that posits that the ability to understand the impact of an individual’s cultural background on their behavior is essential for effective business. However, for our purposes, we can more practically define cultural intelligence as an individual’s ability to understand the set of shared attitudes, values, goals, practices, qualities, and beliefs regarding daily interaction, manners, arts, and worthwhile pursuits for a characterizeable group of people and to effectively use that understanding in the individual’s interaction with members of the characterizeable group of people, consistent with our definition of culture in the first post.

So how do you become culturally intelligent? A number of authors have put forward a number of theories, as can be easily deduced by a search for cultural intelligence on Amazon.com which returns approximately 290 results, but one of the simplest theories is that put forward by Thomas and Inkson in their introductory text on Cultural Intelligence. Since the simplest theory is usually best one, as per the KISS principle, it is the one we’re going to discuss.

According to Thomas and Inkson, cultural intelligence has three parts:

  • Knowledgeof what culture is, how cultures vary, and how culture affects behavior,
  • Mindfulnessto verbal and non-verbal cues in cross-cultural situations, and
  • Behavioral Skillsthat allow the individual to act and respond competently across a wide range of situations.

Each part interacts with, and reinforces, the other. Knowledge leads to mindfulness which improves behavioral skills that allow the individual to cue into more verbal and non-verbal clues in a cross-cultural encounter that increases the individual’s knowledge and starts the cycle all over again, allowing the individual to progress through on cultural journey through the developmental stages of CQ.

An individual who wants to obtain a high CQ in other cultures will need to progress through the five stages of CQ, which are:

  1. Reactivity to External Stimuliwhere the individual does not even recognize that cultural differences exist and mindlessly adheres to the individual’s own cultural rules and norms.
  2. Recognition of Other Cultural Normswhere the individual becomes aware of the multi-cultural mosaic that surrounds us all and becomes interested in learning more about other cultures.
  3. Accommodation of Other Cultural Normswhere the individual begins to recognize that there are different cultural situations, that there are appropriate responses to those situations, and that the individual must try to respond appropriately. Responses are slow and awkward, but mastery of certain behavioral skills is beginning.
  4. Assimilation of Diverse Cultural Norms into Alternative Behaviorsas the individual is now able to adjust to different situations without much effort due to a wide range of behavior skills at their disposal. The individual can now function in multiple cultures almost effortlessly and do so without discomfort.
  5. Proactivity in Cultural Behavior based on Recognition of Changing Cues that Others Do Not Perceivewhere the individual is able to adjust their behavioral responses automatically in anticipation of what is to come.

In order to truly be successful in international negotiations, you have to at least reach stage 4, and if you want be the go-to master, you need to reach stage 5. Of course, as Mr. Locke will attest to, reaching stage 5 will take a significant amount of time and effort*, and possibly an expatriate assignment or two, but it will be worth it in the end.

So how do you get there? Start with the tips offered by Thomas and Inkson and focus on improving your:

  • Integrityor a well-developed sense of self and an understanding of how your beliefs motivate your behaviors,
  • Opennessby becoming more humble and more inquisitive, and
  • Hardinessand increase your robustness, courage, intrepidness, and overall capability to survive unfavorable conditions.

Finally, become aware of the verbal and non-verbal nuances of the culture that surrounds you. After all, one of the biggest failures when it comes to international business is failing to understand the thought processes and motivations of the locals. Just knowing the language is not enough. In the next seven posts, we’ll address some of the verbal and non-verbal nuances that you should be aware of in the Chinese, German, Indian, Japanese, Korean, Mexican, and Thai cultures. Namely, we’ll cover directness, verbosity, and volume on the verbal side as well as distance, touching, body position, gestures, facial expressions, eye contact and emotions and the non-verbal side. We’ll also highlight a few rules surrounding meetings, meals, and negotiations to get you started on preparing for your international assignments. Then, for those of you leading the charge, I’ll recommend taking a preparatory seminar, like the ones offered by the Global Procurement Group, which are developed and delivered under the supervision of Dick Locke, who has headed Supply Management organizations in Canada, France, German, Israel, Japan, Korea, Mexico, Singapore, Taiwan, the United Kingdom, and the United States and dealt with over two dozen global cultures on a regular basis during his Supply Management career.

* Probably at least 4 or 5 years, as the current theory is that it takes at least 10,000 hours of practice to master a skill, but once you’ve mastered one culture, mastering similar cultures (in the same geographic region) will take less time as many rules and behavioral responses will be similar (i.e. Upper North America, South East Asia, and other geographic areas have similar cultures in each representative country).

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An Analyst Finally Gets BI Right!

After reading report after report after report from analyst firm after analyst firm after analyst firm for the last decade or so on how more BI is the answer (it’s usually not), I was very pleasantly surprised by this recent post by Lora Cecere (ex-AMR) of the Altimeter Group over on Supply Chain Shaman on why you should free the data to answer the questions that you don’t know to ask.

The first paragraph captures the situation perfectly:

It happens all the time. IT says to line of business leaders, “Tell me what you need for Business Intelligence (BI), and I will go find the right technologies“. The issue is that we don’t know, and we will not know soon. We only know that applications are changing and that the data is growing exponentially. The answer to the question of: “What is the right data architecture for demand-driven value networks?” is “It is evolving. We don’t know“.

This means that no fixed BI or OLAP solution is ever going to solve your problem! I don’t care if it can handle and/or is designed for geo-spatial data, sentiment analysis, loyalty programs, POS, or CRM. It won’t work. That’s why, as I keep stressing, you need a real data analysis solution that can cube, dimension, map, slice, dice, augment, expand, re-map, re-cube, and start again on data sets of millions of transactions in real time on your high end laptop or workstation. Until each of your analysts has this type of solution on their desktops, they’ll never get the intelligence they’re looking for.

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Auto-Classification is NOT the Answer, Part II

Today’s post is co-authored by Eric Strovink of BIQ.

In Part I, we overviewed the four of the major reasons why auto-classification is not the answer, namely:

  1. Automatically Generated Rule Sets are Difficult (if not Impossible) to Maintainand after a few days of trying, you might just go mad
  2. The Mapping is Rife with Errorsrunning a simple “Commodity Summary Report” after the first “auto-mapping” pass will reveal so many errors that it will knock you off your seat
  3. Automated Analysis is NOT Analysisas all an “automated” analysis can do is run a previously defined report
  4. True Analyis Goes Well Beyond AP Dataand there are considerably more opportunities in PxQ (price-by-quantity) data

However, even if all of this weren’t true, there is still one very good reason not to use automated classification, and that is:

5. Classification is Easy

The “secret sauce” of Commodity mapping has been known for over two decades. Create a hierarchical rules overlay, where oneset of rules overrides the next, as follows:

  1. Map the GL codes
  2. Map the top Vendors
  3. Map the Vendor + GL codes (for top Vendors who sell more than one Commodity)
  4. Map the Exceptions (for example, GL codes that always map to a particular Commodity)
  5. Map the Exceptions to the Exceptions

Why does this method work? It works because the “tail” of the distribution, which is spend you can’t afford to source and don’t care about, ends up being weakly mapped via GL codes by group 1. The vendors you actually care about, in a first-order mapping exercise perhaps the top 500 or 1000 by spend, are very carefully mapped in group 2; and if they provide more than one Commodity (service or product), they are mapped even more carefully again in group 3. Groups 4-N cover exceptions — such as the case where a particular vendor in a particular geography is “known” to provide only one Commodity. Note that this type of knowledge is known only by you — no automatic classifier could possibly know this, and therefore no automatic classifier can take advantage of such knowledge.

Note that errors do not creep into this process. It is hard to make a mistake, and it’s obvious where the mistake has been made when it is made.That’s why the work can be done, by hand, to over 97% accuracy by a clerk in just a few days even in the largest of Fortune 500s. Why? Because the clerk does not have to think, just map. And once the mapping is done, it’s done, and it’s accurate. The rules are saved and never have to be modified, and their interaction with each other is easy to understand. The only changes that will ever be required are

  1. new rules when new GL codes or vendors are introduced,
  2. archival of old rules when old GL codes or vendors are retired, and
  3. new exception rules when mapping errors are discovered.

And if by some chance a user can’t find the time to map spend, then “auto-mapping” (or an outsourced manual mapping effort) should be required to produce the above rule groups. That way, the user can add to and modify the rule groups by hand, using the same tools, when errors in the mapping are discovered. The tool should not be reclassifying data automatically to new rules generated on every cube refresh (which is what could happen if the classifier is, for example, using genetic algorithms for mapping rules).

Why use an error-ridden auto-classification process when you can do it error free the first time, by hand, in a few days, and get immeasurably better results?

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The New Wild West … India? Really?

I found this recent article over at India Knowledge @ Wharton on “a ground-level view of India’s new opportunities and challenges” to be quite interesting and quite humorous when it said that Wharton’s Cohen described the India as “the Wild West”.

What was the Wild West? It was a new frontier that was untamed, lawless, and fraught with as much danger as there was perceived opportunity. In comparison, India contains one of the oldest cultures on the planet, it has more laws at the country, state (& territory), district, and municipal level on the books than most other countries combined, and the biggest dangers are poverty and disease, which are much less of a risk for visitors than they are for the locals. In the Wild West, almost everyone carried a gun and many disagreements were settled by a dual. That’s certainly not the case in India.

While it is a land of opportunity, as it is projected to become the 3rd largest producer of GDP in the next 30 to 40 years, and currently loses 0.5% of its GDP due to logistics and supply chain inefficiencies alone, it’s certainly not wild. If anything, it’s the exact opposite.

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