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Monthly Archives: June 2010
Sometimes You Just Have to Shoot the Sacred Cow
With apologies to our Hindu and Zoroastrian friends, sometimes the sacred cow needs to be put down. If it’s old, weak, limping, and in pain, it’s not slaughter, it’s mercy.
So how do you know when it’s time to shoot the sacred cow? How do you know when it’s beyond it’s prime and on a rapid decline? Simple. You monitor it’s health and give every cow an annual checkup. When it’s overall health level starts to drop dramatically, you know it’s time.
This goes for every cow in your organization — the performance cow, the promotion cow, and the payments cow in addition to the marketing, legal, and advisory cows. This is very important because performance that was good enough yesterday might not be good enough today, different skill sets will be needed by the managers of tomorrow, and if it takes 57 days to process a payment, that’s a problem, even if it is within your 60 day limit.
So, just like this recent HBR article on “tackling the obvious” points out, if you want to stay alive, you have to continually ask what is good performance, whom do you promote, and are you focussed on change … because your supply chain can’t stand still and survive.
There’s No Need for CFOs to have Poor Visibility of Key Financial Information
A recent headline on the Supply & Demand Chain Executive site that stated “poor visibility of key financial information [is] undermining CFOs’ confidence in company performance” commanded my attention because there is just no need for this in 2010. The article, which referenced Basware‘s 2nd annual global study on “The Cost of Control”, noted that only 50% of finance executives profess a high level of confidence in the performance of their departments and only 44% maintain this level of confidence when considering the company’s performance overall.
This is, in a word, pathetic. There’s no need for this. This is not 2000 when spend visibility solutions were just hitting the market, when they cost way too much for the average organization to afford (as they started in the 7-figure range, compared to the 5-figure range that many great solutions start at today), and took weeks, if not months, to update the data warehouse when inaccuracies were found. This is 2010 when you can drill around a spend cube of up to 50M transactions on your laptop, in real time, and reclassify transactions, on the fly, in a matter of seconds. Or, if you have a nice enterprise server to play with, you can drill around a spend cube of up to 500M transactions in real-time and reclassify transactions on the fly.
(If you don’t believe me, and are in the market for a modern visibility and data analysis solution, please contact Lexington Analytics* and ask for a demo — and watch what they can do with BIQ in 45 minutes or less. They’ll even do it on your multi-million transaction data set to prove there’s no trickery involved.)
Plus, there are now a number of vendors with good platforms on the visibility front that can handle very large data sets and a few of them, like Rosslyn Analytics, even do it over the web. And while not all of these vendors will be able to rebuild your cubes in real-time if you choose to change dimensions or reclassify a large number of transactions, they all support rapid drilling and custom report creation so that, even in the worst case, you come back tomorrow and you have your answer. In other words, there are a large number of spend visibility solution providers that will more than meet the visibility and reporting needs of the CFO (even if they are a bit lacking when it comes to power analytics, which is what you need for true strategic spend analysis). And if you have a decent, modern, e-Sourcing or e-Procurement solution, if you don’t already have an integrated spend visibility solution, you most likely have easy access to a spend visibility solution (as most suite providers either have one or have a partnership with a best-of-breed provider) and it’s just a matter of licensing the module and connecting the data feeds. Then your CFO is good to go.
So I don’t want to hear that your CFO doesn’t have good visibility, because that just means you haven’t done your job and implemented the spend visibility system you need to take your sourcing and procurement to the next level. A level you want to get to because, as I indicated in Sourcing Innovation’s recent Illumination on Strategic Spend Visibility, the strategic spend analysis program it will enable could multiply your organizational savings by a factor of five in the first three years and generate strong returns for years to come!
*There are other consultancies, and even other distributors of BIQ for that matter, who can do this as well, but, so far, only Lexington Analytics has indicated to me both their desire to set the market straight and their willingness to do a no-commitment demo for anyone who is serious, so I mentioned them. If any other vendor is willing to do the same (no-commitment demo), please feel free to leave a comment.
Five Indications of Leadership Potential
A recent article in the Harvard Business Review on “the leaders we need now” noted that Generation X will produce executives who bring a distinctive sense of realism to the modern corporation as they possess skills and attitudes that are especially suited to today’s challenges which are both new and unpredictable. Traditional leadership skills — setting direction, having the answers, controlling performance, and running a tight ship — are less relevant in an environment of constant change. These days, leadership is about creating a context for innovation and inclusion in the face of ambiguity and the unexpected. And the leaders in Generation X can bring that to your company. But how do you identify them?
The article outlined five traits that tomorrow’s leaders will need to possess to succeed. Keep them in mind when scouting for your future talent:
- Desire to Increase Collaborative CapacityWhereas baby boomers were “organizational men”, generation X are “networked people” and want to build the strong, trusting, relationships that are essential for mobilizing intelligence.
- Insight to Ask Compelling QuestionsTomorrow’s leaders need to embrace participation in the search for answers.
- Embrace Complexity Oversimplifying challenges will no longer work — true leaders need to grapple openly with complex issues. Absolutes need to be rejected with the realization that there’s often no “right” answer.
- Focus on IdentityLeaders strive to create a corporate identify that ties everyone together.
- Appreciation of DiversityIn the global marketplace, a company will have to embrace diversity to succeed as each marketplace, and each consumer, is different. An organization will only be able to succeed if it is able to capture and integrate diverse perspectives from diverse individuals.
Do You Make These Six Common Talent Management Mistakes?
It might be a “jobless recovery”, but the talent war is here as firms have to do more with less. Are you ready for it? Or are you making these six common talent management mistakes, as highlighted in a recent Harvard Business Review article on “How to Keep Your Top Talent”, that will cost your organization your top talent?
- Assuming that High Potentials are Highly Engaged
- 12 in 60 (20%) believe that personal aspirations are not in line with organizational plans
- 15 in 60 (25%) intend to leave your employ within the year
- 20 in 60 (33%) admit to not giving 100%
- 24 in 60 (40%) have little confidence in coworkers and even less confidence in the senior team
Your high potentials have great expectations with respect to
- personal goals,
- corporate goals, and
- the caliber of teammates and leadership.
If the employee’s goals aren’t compatible with organizational goals, if the employee doesn’t believe that her goals can be realized, if the employee doesn’t see the same level of aspiration and commitment from her teammates and leaders, and doesn’t get challenged regularly, she’s probably not going to give 100% and is probably keeping her eyes open for a new opportunity if she’s not actively looking already.
- Equating Current High Performance with Future PotentialWhile a high performer is driven to maintain performance, chances are you’re expecting high performance in future roles that are more significant and challenging than your employee’s current role. More than 70% of top performers lack critical attributes necessary to succeed in more senior roles. Only a subset of your high performers have future potential, and they will need training to realize it.
- Delegating Down the Management of Top TalentWhile it’s true that line managers know their people best, it’s a bad idea to delegate management and training of true high potentials to line managers. These employees are your future and should be treated as a valuable long-term corporate asset. Top talent must be trained and groomed by senior managers if it is to grow into larger, more senior roles, within the organization.
- Shielding Risking Stars from Early DerailmentBy being too cautious and too focussed on success, emerging talent is never truly developed and tested. This puts the business at greater risk in the long term as it ends up with a sizeable cadre of middle managers who are unable to shoulder the demands of the company’s most challenging opportunities.
- Expecting Star Employees to Share the PainThe decision by a senior executive team to freeze or cut salaries and performance based compensation across the board may seem fair, but it erodes the engagement of the star performer. Under normal circumstances, a high potential will put 20% more effort than other employees in the same role — and in sales or cost savings roles, such as strategic sourcing, their contributions will tend to be significantly higher than the average employee. The reality is that, in tough times, it actually costs less to create meaningful differentiation in compensation than to slash across the board and risk losing key employees.
- Failing to Link Star Performers to Corporate StrategyA star’s confidence in her manager and her insight into the firm’s strategic capabilities is a key factor in her engagement. An organization that goes “radio silent” with respect to strategy runs the risk of alienating a rising star when she is needed most.
So how can you identify and properly manage top talent? Check out the “10 critical components” (subscription required) of a talent development program identified by the authors of the HBR article on “How to Keep Your Top Talent”.