Posts Tagged ‘Category Management’

We’ve got notes – Agile, Jackall, and ‘The’ Un,

April 6, 2013
Cover of "Moral Mazes: The World of Corpo...

Cover via Amazon

  • One of the ways we can take the next step in category management maturity is to become agile. Stay tuned for a fuller development of what this means. For now, I’ll just say that it involves empowerment of teams, treating team members with respect, and harnessing collective intelligence. It involves a higher level of leadership that borrows from what the US Army calls ‘Commander’s Intent’ – i.e. the commander can’t be there to make every decision (or slow things down tremendously if they could), but can influence decisions by focusing on the overall objective.
  • A challenge in becoming agile is that otherwise intelligent ‘knowledge workers’ have, in some cases, become so dependent on falling back on managers to ‘just tell me what you want me to do’ that it will be hard to re-activate the initiative that has gradually been pounded out of them over the years.
  • Couldn’t resist one more on agile…if Hoverstadt and others are to be believed, 70% of change projects fail. Part of the issue – within procurement anyway – is that we spend a good deal of time discussing and training on strategy development, but less time in what makes projects work. One of the keys to strategy is really to have one – whether it is perfect or not is a fun debate, but the key is making a decision and then driving forward. Consultants sometimes like to encourage the development of a big, slow document. The reality is that slow and painful does not drive benefits…action does. Recognizing this reality, then, becomes the first step to making projects agile. We can’t know exactly how the implementation will go up front. So, let’s establish some guiding principles, get them agreed, and get moving. There is a great deal more to making category management agile…that really is just a tease. The challenge awaits.
  • Hilarious quote that I stumbled upon from Robert Jackall in Moral Mazes ‘the basic principles of decision-making in this organization and probably any organization are: (1) Avoid making any decision if at all possible, (2) if a decision has to be made, involve as many people as you can so that, if things go wrong, you’re able to point in as many directions as possible.’ Do we have any hope of moving beyond the blame culture (except in small pockets, of course)?
  • Did anyone see Jon Stewart’s roasting of Kim Jong Un this week? Incredible stuff.

No PED’s…just cat man energy – the natural way

February 4, 2013

Category Management in procurement needs an energy boost. That much is clear.

Energy

Windmills…not much energy, but they sure are pretty! Energy (Photo credit: Open Days – European Week of Cities and Regions)

Now, am I suggesting a call to “Dr.” Anthony Bosch? No, not unless you have a bunch of hats that are too big.

So, if PED’s are unacceptable, what can we do to give our category management projects an energy boost? Well, let’s start with the process to be followed. Step 1…have one! If you make it up on the fly, the risk is that your stakeholder group will spend too much time and energy discussing the process, and not enough time making stuff happen. You – the procurement guy/gal – need to come prepared with your process…hopefully one that, well, works.

So what makes a category management process work? For one, it’s flexible. Not all categories are the same, so it needs to be applicable to a wide range of categories. Think of the process as if it were a platform like Facebook, and the category team is a group of friends. Lots of different groups of friends – with lots of different interests – use Facebook (even you anti-system types…admit it!).

The second one is that it is simple and practical. I have seen processes that go into painstaking detail and cover every objection, but real life happens outside the graphic. Pretty diagrams may impress your friends, but rigorous application of they key points drive value.

Finally, keep up the momentum. The art of the procurement professional is motivating people to make it happen. Go forth and do great things!

www.prometheusprocurement.com

Related articles

Leadership in procurement

January 30, 2013
Dr. Jan Emmanuel De Neve

Dr. Jan Emmanuel De Neve

One of the key elements in a successful category management, SRM, or negotiation preparation activity is leadership. There are people that are good at crunching numbers, running meetings, collecting data etc., but those things don’t change the way an organization does business. Straight to my thoughts…

You don’t have to be Lincoln…

I also feel like there are some massive misconceptions about leadership with some unfortunate consequences…especially in business:

  1. The leader as the self-absorbed hero – There are those who inspire, those who neither add nor take away from overall performance, and there are those who demotivate a large portion of those around them. Don’t be the third guy! If you notice that you turn off everyone around you, it is probably time for a change…a fundamental change.
  2. The leader as decision-delayer – please, make a decision and go with it. If that decision needs to be changed at a future point, by all means revisit. However, if everyone knows that the result of their work will not result in a decision, but rather telling them to do more research and come back later, they will then wait until the point at which the decision must be made to present their work. The decisive leader allows the organization to learn by moving forward.
  3. + The leader as facilitator – I’m not talking about the guy that tries to stop your boss from rambling at meetings. On the positive side, there are leaders who make everyone around them better and bring out their talents.
  4. + The leader as generator – These people boost the energy of those around them by their positive energy. People leave encounters with the generator feeling better about themselves, and ready to do more/better than they ever thought they could.

So how do we improve leadership in the procurement discipline? More fundamentally, are leaders born or bred? My feeling is that there is a fair amount of both. Dr Jan-Emmanuel De Neve, from University College London gives me a bit of backing…thanks, big guy!

One way to improve leadership in procurement is through our human resource strategy…get beyond specific knowledge and experience to get the best people. Another is to develop the people already in the function. I was thrown into the fire as a 24-year-old Lieutenant leading a platoon of 50…not realistic for everyone, but the principle holds. Get people into positions of responsibility and give them the mandate – and potentially training – to make it happen.

Purchasing?! Those guys are full of it…

February 7, 2012
English: Anna Karenina (Kareninová)

Anna is that you? Image via Wikipedia

The title, for those who may not have guessed, is tongue in cheek. However, in some circles, that is the general line of thought even if some are too passive aggressive polite to say it openly.

One criticism that we often hear is that procurement savings are not actually savings at all, but rather more like an intra-group hug. This feedback is sometimes well-deserved, and even if not, at least provides insight into what the rest of the business is thinking about us. Better to bring this stuff to the surface than complain to your neighbor/boss/dog, right? Agreed.

That is why, I’d like to thank T. Cummins (don’t call me ‘Mister’) for his latest blog post on this very subject. Check it out here. Go and read it if you like, but hurry back. It’s lonely here inside a WordPress server. Plus, the web config file is digging into my ankle.

I think the discussion has some good points about the need for improving the way in which we measure savings and the need for improved focus on contract management and performance management, as often the ‘finishing’ and follow-through parts are the most problematic.

Having said that, I think it also reflects the established mental framework that non-procurement people have that reduces procurement to the role of the cheap uncle who unplugs his television every time he leaves the house. Picturing procurement in this way provides Alexey Alexandrovitch-style mental relief. (Here’s a hint: Google “Alexey A., Anna Karenina, Tolstoy and Read a book that does not include a bunch of business truisms”).

However, where crunching the savings numbers falls short is the scenario in which a supplier relationship delivers a huge increase in sales because of having a joint approach to marketing. Or where the relationship translates into a focused investment that delivers a service that customers can’t wait to open their wallets for. Or…well, you get the picture.

Contract management is certainly one strong way to get value, especially when coupled with relationship management efforts. However, there are plenty of others, and which one delivers the most depends on the specific opportunity.

He also mentions the aggressive approach we sometimes mistakenly take with suppliers, which again is valid in some circumstances. Having said that, a semi-organized approach and united stakeholder front – all easier written than done – can alleviate that particular issue. It’s basic, but applying the basics well is significant.

Now, everybody back to work.

Sprinters and category management

July 24, 2011
World Athletics Championships 2007 in Osaka - ...

Image via Wikipedia

I was reading a really cool article about the fastest potential time a sprinter could run. Check out Chuck Klosterman’s excellent writing here. He brings in all sides, but does well to remind us that we could not possibly predict the fastest potential 100-meter time. My own thoughts while reading this were:

  1. Some of the medical/scientific experts take into account performance enhancing drugs, but with the implication that they won’t necessarily get better, or work in (currently) unimagined ways. They will. When the 100 meter record goes below the lowest current prediction for the minimum possible time, the predictors will say something like “yes, I made that statement, but who could have predicted that “x” would happen.” X always happens.
  2. They mention 500 years from now, with the implication being that that is a long time. What will humans be like in 500,000 years, and how could we possibly predict how fast they’ll run?
  3. There are things I’m missing. Whenever someone says “x can’t be done, because of y limitation,” it is because at some point, that person has defined a system with a finite set of variables. There are always variables that fall outside that system.

What does this have to do with business, procurement, or category management? One of the occupational hazards of my profession is occasionally running into people who have “figured out” things like process design, category management, negotiation, or nuclear basket-weaving. As if the system was closed. But it’s not.

The lack of humility is as harmful as it is rampant in business. Category management, or its variants, is a good way to organize our purchasing functions now.  We are likely to discover alternative models that are worth a try in the future. Viewing our professional – and personal – lives as a journey of constant learning with the next problem to be solved right around the corner would be a good start. I won’t be holding my breath.

Keyboard cleaning fluid – a new perspective

October 18, 2010

%d bloggers like this: