Posts Tagged ‘Management’

The TPS Report hits the road

May 1, 2013
Conférence supply chain

Random Supply Chain Conference. Conférence supply chain (Photo credit: Pierre Metivier)


Well, I wouldn’t say we ‘hit the road’ exactly…unless by hitting the road, you mean that we pressed the little green button on Skype.


Anyway, friend of the blog, Dustin Mattison made a mistake invited me to discuss how prediction markets could be used in the supply chain, commodity modeling, and solving problems through data analysis among other topics.


Did I have anything intelligent to say? You’ll just have to click over to the Future of Supply Chains Blog to find out.




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.

Setting KPI’s

March 18, 2013

Brief and to the point. Setting KPI’s is difficult, but people tend to make it more difficult than it is. Check out’s take on setting KPIs. It is mostly in line with my own view, apart from the fact that where they say you can either have many or few, I would strongly emphasize ‘few.’ Especially from the perspective of procurement or managing people.

KPI Park

This area is very near to my heart as I have seen this done badly in a number of ways including:

  • KPI’s that are unrealistic or way out of the control of the party being measured. Nothing will be 100% within anyone’s control, but there needs to be some correlation between the KPI and reality.
  • KPI’s that, if completed, would have very little effect on overall performance. I have been in multiple situations in which I could either perform to the KPI, or I could do the stuff that helps my organization perform better, but not both. Don’t be the organization that makes the employee or supplier make that choice…
  • Don’t be falsely scientific. Formulas that assign 1-10 or high, medium or low should not be part of a mathematical formula. In statistics, high medium or low are called ‘factors’ and are treated differently than qualitative variables. If you think about it logically, ‘medium’ is not necessarily 33% higher than ‘low.’
  • KPI’s not tied to any strategy or even impetus for improvement. If the onus is put on one individual to change the world, but they are not allowed to affect change, then the result is absurdity.

If you are going to tear down, then you must build it back up as well right?

  • Make stretch targets that are achievable – innovative people like to be challenged with reasonably difficult targets…and then get rewarded for doing so. They have to feel, however, that they are possible and that they have the mandate to fundamentally change the way we are currently doing business (how could you get breakthrough results without major change?).
  • Make KPI’s ‘intermediate’. I.e. don’t target suppliers with an increase in your share price (how could they possibly influence the psychological swings of hedge fund investors?), but target them with improvements in productivity in your organization that could be reasonably expected to contribute to a rise in share price.
  • Make them together with the supplier/employee. It is almost a cliche at this point, but people and organizations respond much better when they contribute to the forming of the KPI’s by which they will be judged. They will have insight into what makes for better performance.

There is probably many more on both sides of the line. Give me your KPI success or failure stories in the comments section. If you do, you’ll get a free one-year subscription to TPS planet.

The week in review

February 22, 2013
Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Royal Swedish Academy of Sciences in Stockholm (Photo credit: Wikipedia)

Leadership from Tom Moore

February 10, 2013

I’ve often felt that the military (with all its faults firmly acknowledged) and high level sports (same) have benefited from excellent leadership…much more so than is generally found in the business world.

The quote below from is excellent evidence of my theory. American football coach, Tom Moore, could have been talking about a procurement department, consultancy, or technology services company.

“Football is a game of people,” Tom Moore said. “There are lots of systems. One of the things you want to make sure you do, and it’s what we are doing, you don’t come in with preconceived ideas. You don’t say, ‘I’m Tom Moore and this is what we’re going to do.’ It doesn’t work that way.”

There are not many in the business world intelligent/wise enough to adapt to the strengths of their people…those that do have a marked advantage over the competition.

Related articles

Good reminder on management

April 26, 2012
kevin has just seen the new TPS report . .

kevin has just seen the new TPS report . . (Photo credit: chedder)

We in management could use a good reminder of how people work from time to time. If we are not careful, we can lapse into a harmful mindset which results in low morale and a poor overall work environment. There is just so much to be done, that we occasionally lose discipline in terms of the effect of our actions on those around us.

As your reminder today, here is an article from Inc. by Geoffrey James, which does not offer any groundbreaking material, but serves that purpose quite well.

The following quote in particular – under the fourth heading entitled “Employees are my peers, not my children,” – is particularly good; “Excellence is expected everywhere, from the loading dock to the boardroom. As a result, employees at all levels take charge of their own destinies.”

Also of note is that not everyone that achieves success in business follows this guide. However, it depends on how you define success. For me, the “core beliefs” in the article are the only way to achieve what the TPS Report would consider to be success.

Bob Nutting provides fodder for business jargon devotees

February 20, 2012
English: Night skiing at Seven Springs Mountai...

The followers of the TPS report understand my mild annoyance at the use of business jargon. It is because I occasionally lapse into trite phrases myself that my annoyance is only mild.

However, when Bob Nutting is the purveyor of business speak, the annoyance factor goes up a bit. Here is one question and answer from Mr. Nutting that fills out a paragraph but provides next to no insight (with link to the full article below):

Q: How does Bob Nutting fully concentrate on owning the Pirates when he also is owner of Seven Springs Mountain Resort and plays a significant role in a newspaper chain?

A: I fundamentally believe you can’t multitask. You have to attempt to be fully engaged in every process you’re in. The key in all of those businesses is I’m still driven by a sense of core values: strategic focus on where the business needs to be in the longer term; a focus on making sure excellent people are empowered to make good decisions and that they never feel they are handicapped by a bureaucratic structure; and wrapping that around what the long-term strategic goal is, and making sure everyone understands we have a measuring stick.

Read more: Bob Nutting Q&A:’ We can be a championship organization’ – Pittsburgh Tribune-Review
Note the use of the work “process” which is an absolute must when it comes to business speak. “Strategic” is a mortal lock as well, and can mean almost anything. He mixes it up a bit (but not much) with “measuring stick.”
Now, to the uninitiated, Bob might come off as sounding like a very good, insightful businessman that has things under control. Until you take a quick glance at his results. The problem with jargon is that anyone can spout it, and if applied with enough confidence, makes that person intimidating to others.
There is no avoiding the need to learn the language, but being overwhelmed by it is another story.

Regulation and leadership is not about explaining the rules

December 4, 2011

I wasn’t going to write tonight. Really wasn’t. Then, I read this article in the Wall Street Journal. If you don’t have a subscription, I’d suggest buying one just for articles like this.

It talks about the state of regulation. If we could only regulate everything, then bubbles and crashes wouldn’t happen, right? This view is conventional wisdom, which means it has a very good chance of not being correct. Which it isn’t.

I was recently told that we needed to send letters with certain wording before engaging candidates for an interview. Otherwise, I could inadvertently offer employment to someone to whom I had clearly not offered employment.  I suspect that this is not true. If it is true, then can we just stop it?

One could (almost) be forgiven for mistaking leadership with caution regarding compliance with relevant regulations. I’ve seen it happen. Leadership can be overly proscriptive, thus leading to a decline in personal responsibility. Thus leading to worse outcomes. What makes us think that overly proscriptive regulation might not have the same effect?

We can’t imagine every scenario for the people that report to us. The ‘principles’ that we teach won’t apply in every situation, especially regarding client requests. The temptation will be to massage the principles to include what we are currently thinking at a given point in time.

Brains are squishy and difficult to fit into templates. Encouraging good judgement works wonders even when we don’t agree with every decision. Why would those principles not apply when it comes to regulation?

Instead of tweaking words, let’s hold people (including the regulators themselves) accountable. Agreed?

How widespread is the use of business processes?

August 9, 2011

I have seen many businesses processes and I am very much interested in the question of whether and to what extent people believe they are valuable. What makes them good and what makes them ineffective?

To be clear, I am talking about any type of business process. I don´t want to contaminate the vote any further. Please vote in the poll and leave comments to elaborate further if you wish. The person with the best response receives a free one-year subscription to the TPS report.

Supplier relationships – a view from the sky

July 19, 2011
TPS report cover sheet.

Never forget the cover sheet on your TPS'll have 8 bosses coming by to tell you about it. Image via Wikipedia

A pure procurement post for a change, although previous posts apply to procurement as they would for any aspect of business.

We are finding an increase in interest in supplier relationship management recently among our larger clients these days, which is encouraging, since SRM seems to be one of those things that people know they should be doing, but don’t actually invest the time to do. Often, when things don’t feel important, they often aren’t and are wisely pushed to the back burner. This is not that.

Supplier relationships represent the type of thing that is important, but not urgent (thanks Covey). Just like reviewing our financial portfolio or doing a will, it is one of those things that we just don’t seem to get around to doing. I personally don’t need to worry about those things, since I am, of course, immortal, but I think others should.

I won’t go through a comprehensive (read: boring) list of why we should be more concerned about supplier relationships, but my main reasoning here is we here at TPS report see the way business works as a giant system. The farther away we move from our little corner of that system, the less we focus on individual personalities, and the more we see either breakdowns in coordination or good coordination making operations flow smoothly. It doesn’t fit with our cultural narratives, but there are no real heroes nor real goats (ok, we all know a couple duds).

So, if we spend a great deal of time designing our organizations as systems, why shouldn’t we include our strategic suppliers? Just like individual relationships (see previous post), supplier relationships based on trust can deliver surprising results.

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