Tag Archives: leadership

5 Keys to Success for CEOs

business

Happy New Year! The new year is always an opportunity to reflect and, since I have the opportunity to work with many businesses and CEOs, the past few days I’ve thought about what makes a CEO achieve excellence. Considering what I observed the past year, here are 5 keys for business success.

  1. Companies cannot just cut expenses to achieve profitability. They must grow the top line, develop innovative products, meet marketplace demands and focus on growth.
  2. Any organization that lacks a clear and simple strategy is like being lost in the woods without a GPS; the organization must have a clear focus and understandable direction.
  3. The key to any business is its customers. It is essential to know who the customer is, what they need and want. Without a clear focus on the customer the business is subject to fail or significantly lose market share.
  4. Employees must know the industry, market, have sensitivity to competition and digital disruption and be able to rapidly react to changes. This requires leadership, talent management and clear communication of goals and objectives.
  5. From the top down, the leaders and employees of the organization must display integrity at all times. It is unfortunate when the leader of the organization lacks integrity; it cascades through the organization.

Boards of Directors have a duty to ensure the survival and health of the organizations they serve. I am on several Boards of Directors and I hold the organizations to these standards. I also use these as key considerations when engaging in new client relationships.

What do you think is key to business success?

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5 characteristics that drive high-performing teams

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Over the years I’ve had the opportunity to work with hundreds of teams. It’s always interesting to observe the teams and question why some teams succeed, while others flounder and eventually fail. Here are five characteristics the best performing teams have in common.

  1. Clear responsibility, authority and accountability must be assigned to the team. The team with responsibility and accountability is likely to fail if they lack the authority to act.
  2. Vision, mission and alignment to the business plan is a core criterion for success. If a team doesn’t have a charter with an agreed mission, the team will operate like a rudderless ship. It’s essential that the team works hard at the front of a project to understand the vision for the project, mission and joint goals. As part of the alignment of the business plan, the team must also understand how to measure its own performance and the success of the program.
  3. Management awareness and commitment to the team. One of the key elements for high-performing teams is the selection of team members. In today’s business environment when everybody is extremely busy, it’s essential for management to make a commitment of resources to the project. One other essential element is that the team success or failure reflects on the individual’s performance.
  4. Funding is always an issue when it comes to cross functional teams. I ‘ve seen teams struggle and fail when “who is paying for the project?” is unclear. Travel always seems to be a contentious issue when it comes to teams, especially if it’s global travel. One way to be successful is to create a budget upfront or agree with key line managers how much travel is involved and what time constraints will be placed on their department resources for this project. By addressing this issue at the start, team and project leaders can be assured that it won’t be an issue later in the project at a critical point.
  5. Reward and recognition is an essential part to assuring team success. Many team members are working on projects in addition to their regular workload. When a team is successful, it’s the responsibility of management to recognize their contribution to the business and develop some simple reward as a token of appreciation.

Many companies work to drive cross-business teams to meet business goals. Using these key elements as a project leader will improve the chances of having a high performing, successful team.

Will your team succeed?

5 Things that Keep CPOs Concerned

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I was fortunate to be invited to speak at Ardent Partners CPO Rising 2016 conference at the Harvard Club in Boston, where an exclusive group of Chief Purchasing Officers gathered to share best practice, network with colleagues and understand the issues that will likely impact them as we see major shifts in our profession resulting from the digital disruption, changing workforce and continued globalization. Over the day and a half, I consistently heard these five key issues that keep CPOs up at night:

  1. The lack of skills needed to meet future needs
  2. The need to continually adjust processes to meet the constant changing business needs
  3. The need to align the supply chain with the organization’s strategy
  4. Risk management
  5. Managing mergers and acquisitions

I don’t see these issues being resolved easily and it is more evident than ever that the CPO must continue to adapt to change and develop the capability to reengineer business process as the environment changes with mergers, acquisitions, divestiture and business strategies impact the organization, process, systems and people.

CPO Rising 2016 was topped off with Andrew Bartolini inducting Tim Cook, Hal Good, and Gregg Brandyberry into the CPO Rising Hall of Fame. Congratulations to Andrew and his team on creating such an impactful event.

Can you help your CPO sleep better at night?

What’s the organizational life span of the Chief Procurement Officer?

Business man protecting new business growth concept

When I started working, the head of purchasing had a job until he retired and then next person-in-waiting usually took the helm. Today it seems that our Chief Procurement Officers have about the same longevity as a coach in the NFL or MLB. In the past year or so at least seven of my friends and colleagues holding the position of Chief Procurement Officer experienced unplanned exits from their organizations. Many of these CPOs had a very big public profiles, they all made a large contributions to the organizations they served, all were actively engaged on the Management Executive Committee in their firms and in some cases were driving key projects with Board of Directors visibility. I’ve discussed the short lifespan with industry experts and other consultants who have seen the same trend for the CPO. It’s been researched and reported by CAPS Research whose study of CPOs in 2014 reported that the more than half of the CPOs in Fortune 500 companies had been there for less than 4 years and that only 10.6% were promoted to the position from within. The study also found that very few CPOs were promoted to higher executive positions. What can be done to prolong the lifecycle of the Chief Procurement Officer?

The Chief Procurement Officer may be more vulnerable than the Chief Executive Officer with an average life cycle of about 5 years. There are ever increasing expectations that CPOs will deliver continuous deliver cost and value improvement, align with multiple business units and objectives, service the business in a matrix organization structure, manage myriad stakeholder demands, work globally across borders, accelerate speed to market, integrate the supply chain and manage merger and divestiture activity.

The longer the CPO is in place on the job, the more difficult it is to rejuvenate and create new strategies to continue the generation of continuous cost reduction, which is still the primary measurement in many businesses. As new initiatives become increasingly important, the organization expects the CPO to be proactively ahead of the curve on programs like risk management, sustainability, re-shoring, big data strategies, best country sourcing and leaning out the supply chain.
How can CPOs increase their lifespan? Here are 3 key strategies for survival:

1. Talent Management

To be effective in the organization, the CPO requires a top team to execute the global strategies, align and support the business, architect the supply chain, and drive the metrics that will change management focus from cost to value delivery. Talent is scarce and there is a lot of competition between CPOs to recruit, develop, and build a team capable of executing a world class results based global strategy. The inability to develop a world-class team as a prime objective is one factor in shortened longevity on the job.

2. Total Cost Focus

It is critical that the CPO educate management on the Total Cost of Ownership and value extraction from the supply chain. A CPO with a sole focus on continued price reduction is destined to fail. While everyone likes reductions, we know that suppliers are not a source of incremental margin for the buying company. All suppliers need a healthy margin to reinvest, innovate and drive industry changes. With the ability to conduct cost analysis, there is little doubt about the transparency of cost. If a CPO with a strong emphasis on price reduction will soon run out of runway and require new suppliers and additional sources to drive margins down forcing industry consolidation.

The real opportunity is value enhancement and true cost reduction through specification change, redesign, capital investment with faster cycle times and least cost sourcing. In addition reduced warranty, risk mitigation, speed to market, target costing and innovation will play a role of increasing importance in future CPOs. Ignoring these will be a sure way of sealing the fate of the CPO.

3. Get a Seat at the Table

In the future, the CPO will play an increasing role in business success. It is essential that they play a key role in the executive management of the company, report to the CEO and have some accountability to the Board.

Currently, purchasing expenditure accounts for about 50% of a business’ cost. I see this increasing with global sourcing, outsourcing, industry consolidation, and value maximization. The ability to integrate suppliers in the supply chain, drive for least cost production, and increased levels of value and supplier relationship management will ultimately drive the lifespan of the Chief Procurement Officer.

Time to take inventory and assess your phase in the company lifespan.

Change or be changed.

What have you done for them lately?

I worked with a food industry client whose team was dedicated, hard working, and focused on their mission to reduce costs and deliver value. It was extremely competitive industry and the media reported that competitors were doing poorly based on price increases on commodities and raw materials. When this client reported a 57% increase in profit with a 9% increase in sales for the quarter, it became obvious to all that the procurement team was driving the results.

When I had a conversation with the CEO about providing a reward and recognition for this hard working team, he was astonished that I would ask what he planned to do for the team. Admitting he’d not thought of holding an event to reward and recognize the entire team, he was willing to try. He decided to host a dinner at the city’s finest restaurant. He invited all of the purchasing employees and their significant others and arranged a limo pickup for each. The CEO provided a nice gift for both the employees and their guests and thanked the guests for their sacrifice for the company to achieve this milestone. Needless to say, this recognition was the talk of the company for a long time. The team continued to excel and later the CEO acknowledged that this low cost activity provided many benefits long after the event occurred.

When economic and business conditions deteriorate, many companies cut employee reward activities when they are needed most. Low cost events can pull the team together and focus them on a shared vision and mission. While most companies acknowledge teambuilding as a key to organization development, they fail to see how a reward event can drive:

• Goal alignment
• Interpersonal relationships
• Role clarification
• Improved problem solving skills
• Sense of purpose

I think every leader should budget and plan for team events globally. These do not need to be elaborate nor expensive to be effective. The ability to have fun, get to know others in a non-work/political setting, and build understanding and trust go a long way to improving team performance and team dynamics. Don’t wait for a formal meeting or strategy session to do some teambuilding, although that is what many firms do. With finding and retaining talent a challenge, don’t forget the importance of a feeling of belonging to a team and company.

Looking for ideas for team activities? Here’s a good list I read recently “5 Team Building Activities That Don’t Suck”, January 2, 2015 — Posted By Kim Tracy Prince. And, here’s a list of fun events I’ve seen:

1. Whirly Ball
2. Bocce ball
3. Paint Ball
4. Picnic in the parking lot on a work day
5. Bowling
6. Attend a sports event

Casey Stengel said: “Gettin’ good players is easy. Gettin’ ’em to play together is the hard part.”

What will you do for your team?

Strategic Agility is a Leadership Imperative for Procurement and Supply Chain

I read an interesting blog post by Steven Krupp (CEO Magazine) on strategic agility that can be applied to Procurement and Supply Chain leaders. In my 20+ years of consulting, I’ve learned that procurement leaders will fail and lose all credibility and effectiveness if they are not flexible and display strategic agility. It’s a career-ending move to say we don’t do it that way, we can’t do it, we tried it before and it doesn’t work. All of these demonstrate non-openness to change, lack of flexibility and limited strategic agility. Today’s business environment with its uncertain economies, drive for short-term earnings, increasing regulation and unstable markets can threaten the procurement leader who likes the status quo. It takes consistency, a great deal of courage, discipline and tenacity for leaders to be flexible during change and agile in strategy. Good leaders lead their charges to calculate and take the right risks to achieve their goals.

Each Procurement and Supply Chain leader must develop these skills:

  • Anticipate changes in the supply chain
    Do a minimum review with the team once a quarter to identify where key markets are headed. Be able to anticipate changes in the global economic climate. Review where exchange rates are strong and where they are weak. Be sure that you have a supply chain that is aligned with your business strategy. Work to develop strong supplier relationships that add value that will be seen all the way to the customer.
  • Challenge the conventional wisdom
    Strategic leaders are not afraid to challenge the conventional wisdom. Rather than having extensive category and industry experience, recruiters and organizations are now looking for a proven track record of conventional challenge. To challenge conventional wisdom, it’s necessary to speak up and voice your opinion on key topics even if not popular to show how ways, processes and opportunities can be met by changing traditional business thinking. Leaders display innovative ideas, strategic plans and solutions to age-old problems.
  • Learning from Experience
    There is no better teacher than experience. Giving people the responsibility, authority and accountability for decision-making will make them stronger and provide the opportunity for changing the status quo. Of course, there may be mistakes, but good leaders use those mistakes to build a learning organization that takes calculated risks for the benefit of the entire company. A true leader is open to this type of delegation and a culture of learning vs. retribution.

To be successful in this profession, a leader must anticipate changes in the global economy, category markets and integrated supply chain. Leaders of the future are those who challenge conventional wisdom, create new ideas, consistently improve performance and encourage their teams to take calculated risks and rewards, modifying plans as necessary.

How are your strategic agility skills?