Tag Archives: category team process

Reward and recognition – the neglected tool for successful teams

holiday-cocktail

It is surprising just how many corporate executives fail to understand that it’s the simple things that make a difference.

Whenever I am working with the indirect expenditure in client organizations, I build cross-business, cross-functional teams. These teams are given clear objectives and goals and asked to build a team charter outlining their mission, roles, responsibilities and accountabilities. In many cases, the teams are launched with some training and development and a mission to gather data. Within 4 weeks, the team returns to make a presentation to senior executives outlining the mission, goals savings opportunities, risks and strategies. For many of the team members, this is their first exposure corporate executives.

Once approved, the team is given 4 additional weeks to bring the project plan back and an implementation team will be assigned. I also suggest that individual performance reflect the team performance so everyone has a stake in the game. The teams I’ve worked with have delivered cost improvement, process improvement, risk reduction and in many cases, increased shareholder equity.

When complete, I suggest the executives reward the team. They are normally surprised and many have asked me what should the reward be. I always say anything that recognizes that the team worked on the project in addition to their regular job, fostered collaboration and brought extraordinary results to the business. The reward is never about money, but always about a recognition that there was a major contribution to the business.

One CEO arranged for the team members and their significant other be picked up by limo and treated to dinner at the best restaurant in town. A small token of appreciation was given along with participation of the executive team. It’s been several years, but the team still talks about how they were recognized.

The company had many volunteers to join teams and make a big contribution. It’s best to understand that rewards like this bring loyalty and incentivize team members and other employees to be part of success. It’s a small price to pay for the benefits that are gained by collaboration, communication and success.

How do you reward good team performance?

Building an effective team category sourcing strategy

rowingteam

It often surprises me that many purchasing organizations lack an effective process for building a team-based strategic commodity sourcing plan. Typically plans built with key stakeholders are more successfully executed, deliver high results and encounter less resistance in the organization when change is required. By working with a team, you can assure the greatest sum of knowledge, get a better understanding of the project complexity, increase creativity and assure acceptance and ownership of the project by all members of the team. While many purchasing professionals have trouble engaging stakeholders, I have found when you can engage stakeholders, you will improve and increase the opportunities for your organization.

Who should be on the team? Before I start a program, I typically engage a steering group. The steering group’s role is to approve the project, make recommendations and remove any resistance or roadblocks that stand in the way the team. If the steering committee is comprised of senior leaders of the multiple disciplines required for the project, it has a better chance of success. If the sourcing leader can engage the steering committee as champions, the project is primed for success. All sourcing professionals should understand the stakeholder in terms of how much interest they have in the project and how much influence they have in the organization; a stakeholder with high interest and high influence would be a good one to engage as a steering committee member. This process will also work for the selection of team members. Other criteria to consider for team members are their ability, availability, knowledge, experience and overall willingness to contribute energy and time. The team’s responsibility will be to develop both short term (tactical) and longer-term (strategic) category strategies and sourcing plans. The team is also responsible for effective communications, information control and internal briefing of the project progress. If the team is committed to success, you will likely have a great project and outcome.

How should the team kick-off?  I suggest that the team build a charter. The charter identifies the mission, focus, objectives and scope of the project. It is an essential tool for keeping the team on track and focused. If things start going off the rails, the charter will bring the team back in focus. It is also necessary early in the sourcing strategy process to build a plan with timelines and milestones to measure the team’s productivity.

What are some important tasks?

  1. The first step in developing a strategic plan is to understand the historical situation and trends for the category. Ask the question “why has the organization sourced this category this way in the past?” If your organization can standardize the way “what we’ve done in the past” is reported, the more time the team has to explore future options and to focus on the strategy for the category.
  2. The team must evaluate the current situation, new opportunities and forecast the future trends to consider when sourcing this spend category. It is essential that the team take a deep dive into business needs and requirements, including things like receiving constraints at each facility, personalized service, inventory requirements, pallet markings and anything else that is currently being done by the incumbent supplier. Once the team has identified all of the business needs, it must look at the category and make the determination if the category should be managed tactically or strategically. Key tactical or strategic decision influencers are the number of suppliers in the industry with the capability and capacity to supply, the value-add contribution of the supplier and uniqueness of the specifications.
  3. Part of the planning process is to take a look at the sourcing history, price analysis and do a detailed analysis of the cost. Every buyer should have the capability to break out materials, labor, overhead and develop some idea of the supplier’s profit margin. Without this data, it is impossible to quantify the opportunity available in the project and determine the return on investment. This is a key checkpoint and milestone of the project: the ROI will determine if the project should go forward.
  4. After validating the ROI for the project, the team should evaluate the risk, global or local sourcing, technical opportunities, supply chain implications and supply market trends. The team now has the data to decide the way forward and determine the best strategy–should it be RFI/RFQ/RFP, auction, buyer’s offer, contract extension, logical negation with the incumbent, make or buy, or acquisition or joint venture? I have worked with teams that have developed and implemented all of these options.

The sky is the limit if a team can present a good strategy with a high ROI and build a convincing fact-based case. It requires discipline, process, strong leadership and the right people.

Do you have what it takes?