Tag Archives: category management

Are the traditional consulting and training models dead?

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I have been consulting and leading training initiatives for 24 years and have seen changes in tools and techniques, but basically, the delivery methods haven’t changed a lot. When I read an article in the Wall Street Journal this week by Lora Koldony, I thought a lot about the traditional models used in the past and the way I have changed my consulting delivery model in the past year. The WSJ article focuses on micro-learning as the way forward for training. The author quotes a study by Microsoft citing “the average attention span – the amount of time person can stay focused on a single task, filtering out distractions – in North America dropped from 12 seconds in 2000 to 8 seconds in 2015 thanks in large part to smartphones, on-demand entertainment and social media infiltrating people’s lives.”

Companies like Pernod Ricard, Gap and Uber have adopted a form of education called micro-learning: breaking down concepts and tools in smaller bite-sized chunks, which work with packed schedules, travel and meeting times. The smaller programs enable people to focus in short intervals, which have proven to embed learning if followed by a coaching program.

As I look at the consulting industry, I see a massive change in how companies and their employees work on key priorities like cost and value improvement and change initiatives. The days where armies of MBAs invade a business, charge high fees for analysis, strategies and programs that companies try to implement are coming to an end. These projects may provide value in the short-term, but are rarely embedded and sustainable in the longer term. Employees generally resist outsiders (consultants) in the business when they take over key categories of expenditure and conduct massive bidding events, usually generating price savings, but often leaving behind damaged supplier relationships. Sometimes the consultants are paid on a percentage of savings, which is usually presented as a means for their services to be self-funded. While management may gain some short-term results, generally the business experiences long-term pain because the consultants have a price focus (since their compensation is savings based) rather than a value-based approach (which is difficult to measure).

One of the reasons I believe there’s a massive change in the consulting industry can be found in article 3 Trends for the Next 50 Years, the Rise of the Idea Economy by James Altucher. One of the notions in this article is that we are moving from corporatism to an employee-free society. There are two reasons for this trend. The first is Pareto principle where 80% of the work is being done by 20% of people, so corporations are downsizing. The second is that regulations are too difficult to follow. The result is a wave of solo entrepreneurs and the attraction of the contingent workforce lifestyle and is why companies like Uber are flourishing. Basically, companies like Uber have the contingent workforce (with their own assets – the cars), logistics software and customers. What’s not to love?

With this in mind, an application of the new approach for the procurement consulting model is to work with cross-functional, cross-business teams on category management. The project typically starts with a four-day workshop with the team that is designed to provide tools, assign roles and accountability, develop the process and define the strategy for the category. The team is then prepared to go forward to gather and analyze the fact-based data, refine the strategy and implement the process and plan. The consultant’s role is to drive the project, check in with the team (remotely) on a weekly or other planned timeline. While the consultant is able to manage project timelines, assist in strategy adjustment and provide additional coaching and tools, the company team drives the project and assures all business needs are met for now and for the future.

The result is a sustainable process and category plan, embedded learning, an empowered team, true value improvement, stronger managed supplier relationships and a sense of satisfaction and ownership. Since the teams are led by an experienced category expert (usually one consultant), the resulting fees for consulting time and travel expense are greatly reduced, results are better and the return on investment is extremely high.

The traditional model for consulting is dead. Strange thing for a consultant to say.

Is it time for a change?

 

photo: Dikaseva

How to Achieve Disruptive Training and Development

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How effective is your training and development initiative? I have led and participated in training and development initiatives where the results in the classroom are great. The class is motivated, excited about the new tools and concepts, course ratings are high and everyone feels really good. When the class participants return to their work, they may try a few of the new techniques, but soon it’s business as usual. Has this ever happened to you?

Think online learning is the better approach? Businesses can agonize over finding the right online program, roll it out and require that each team member complete the course. The online course system will report on course completion compliance. Unfortunately, most people have busy schedules and cram multiple modules into a short timeframe near the deadline for completion. Some extend the course over a longer time, failing to absorb the concepts because too much time has passed between sessions. The result is the same for both types of course-takers, the learning is not embedded and the new skills are not utilized.

Face it, it’s easy to spend training budget on courses, check the box for the task “deliver training”, then deliver poor to mediocre performance appraisals to employees because there’s little application of new skills in their job. The employee must be the problem, right? Wrong!

What’s the solution? Training supported by active project-based coaching. Here are two examples of disruptive T&D that continues to deliver high performance and results.

Case 1: A global conglomerate needed cost and value improvement by enhancing tactical and strategic procurement skills. While the initial overall program components are not unusual—HR, procurement team and internal corporate university works with outside firm to roll-out competency assessment, online learning and instructor-led classroom training—it’s the implementation of a requirement to complete an action plan for an expenditure category in their portfolio over the 6 months following the classroom with coaching/mentoring available by the course instructors and the individual’s supervisor during this time. Actions plans had to be approved by the instructor and the supervisor.

The results were astounding! The documented return on investment from the training delivered $40 for every $1 invested in the program. Besides the $millions in savings and the value from innovation and other improvement, the learning was embedded and skillsets enhanced.

Case 2: A medium-sized company with 4 divisions was unable to get collaboration, leverage and synergy. The project focused on small category teams comprised of members from each business unit. A four-day workshop was delivered, during which tools and concepts were introduced, the teams selected projects, identified opportunities, built initial strategies and presented them to senior management. After the workshop, the teams launched with weekly conference calls with mentoring and coaching. The teams presented monthly updates to senior management. At the end of the 6 months, the supply base was optimized and $64 million in cost and value improvements were achieved.

Most companies are reluctant to engage in programs like these because of complexity and the additional cost of engaging an instructor or coach for longer than a 2-day course delivery. The right training provider can manage the complexity and offer a coaching program on a per person or monthly fee option that works for your budget and delivers the breakthrough you need.

5 Ways to Embed Learning

  1. Establish course completion timelines for online courses: use an outsourced provider to work with individuals, chart progress and report status
  2. Require a pre-requisite online course before delivery of a classroom course or workshop to orient participants so class time learning is optimized
  3. Include a work project in the training
    1. Alert the participants ahead of the training
    2. Allow class time to get the project started
  4. Provide coaching and mentoring post training by the training provider, internal resource or both.
  5. Launch category management teams with
    1. Kick-off workshop
    2. Weekly coaching
    3. Project management

Ready to disrupt your training initiatives?

Why doesn’t management understand?

Suppliers are not a source of incremental profit

If a strategic category-sourcing manager has done her job, she has a full cost analysis, understanding of the supply base and global market place for the category. Every one understands that companies need healthy supply chains where their suppliers are reinvesting, innovating and buying automation to reduce cost. Yet, in some companies, the drive from top management is cost reduction. The lesson that suppliers must be profitable rather than leveraged to the edge was learned by the automotive industry when most of the domestic supply base was either bankrupt or close to it.

When buyers turn their focus to value extraction and not just cost reduction, the results are outstanding. I am writing a book entitled “The Best Customers Get the Best Ideas”. The preliminary research shows that companies with truly integrated supply chains have a high degree of supplier-led innovation, lowest cost of production and lean, flexible responsive suppliers. Two examples that come to mind are Apple and Toyota, but there are many more.

If you are a purchasing and supply chain executive whose focus is cost reduction, you will find that you have a short life in the job. It is difficult to extract 10% a year from the supply base, especially when you run out of ideas or have a unstable supply chain with constant change and high switching cost.

Supplier relationship management is a skill that all commodity managers, procurement and supply chain executives need to assure longevity in the job and a stable productive supply chain.
Think about the value-add that your strategic suppliers can bring to the table. They can bring R&D, new processes, new products, exclusivity, speed to market and supply chain integration.

Time to make the change to value management rather than cost reduction. Remember:

the best customers get the best ideas!