One of the interesting things about consistently reading and hearing content from quality sources is that you start to notice trends. It is amazing how often the same topics arise at the same time in different places. We use this blog as a way to help you stay on top of the major themes in procurement and supply chain management.
“Very few organizations manage sourcing so well that there is no room for big gains. Category management is about changing sourcing in a radical way or a way that gives radical improvements.” (p. 33)
This quote from Jonathan O’Brien’s Category Management in Purchasing neatly sums up not only the idea of category management as he defines it, but also the full use of the content in his book, which is to support purchasing or procurement teams with a desire to significantly improve the way they manage sources of supply. The book provides all the background, strategy and tactics to stage a successful procurement transformation along category lines.
Like many people, I had too many sweets and treats over the holiday. It's a new year and I shouldn't even be thinking about cookies. However, I just finished making a batch of oatmeal chocolate cookies for a party tomorrow. Nothing like fresh cookies out of the oven!
Many times my children would want more than the two cookies I was offering. I would offer two , they would want three or four. After a few times back and forth, I would change my offer to ZERO cookies. Then all of a sudden they felt that two cookies was a great option!
In procurement, we are sometimes in situations where we want more cookies than are being offered. Or we want to include cold milk at the same time but that is not available at the price point we are interested in.
This week’s webinar notes are from a January 9th event hosted by Procurement Leaders and sponsored by iValua, with a case study presented by Whirlpool. The event is available for replay on iValua's site. If you are interested in more on the topics covered in the webinar, you can also download a free report (no registration required) that shares the results of iValua’s first Procurement Executives survey.
Just joining us? Last week we looked at performance reviews from a procurement manager’s perspective. This week we are looking at the same topic from the perspective of the person being reviewed.
You will likely have a performance review coming early in the New Year. Some people see performance reviews as “facing the music” while others see them as an opportunity to “toot their horn”. For the sake of your own career, I recommend thinking in terms of the latter.
Review time is an opportunity to display your accomplishments, demonstrate your capabilities, and discuss potential opportunities with your manager. At a higher level, this is also a good time for introspection to honestly access your future with the organization.
Many of us have played the telephone game as a child. You all sit in a circle. The first person whispers something into the next one’s ear. By the time it gets around the circle, the last person says what they heard. Almost always, it is completely different from the original statement.
This week’s webinar notes are from a December 2013 event presented by Coupa and CFO.com with featured speakers from Deloitte and Blackstone Group. The event is available on demand on CFO.com and if you are interested in the content, there are two Deloitte whitepapers you can download:
- Charting the course - Why procurement must transform itself by 2020
- The Deloitte Global CPO Survey 2013
While the four trends defined by Deloitte’s John Mavriyannakis are new topics for procurement, he did offer some interesting updates, added to by practitioner commentary by Blackstone’s Scott Whitehill.
It’s that time of year.
Don’t shrink from the performance review process. It’s a time to reflect on the past year’s results, recognize accomplishments, and reset expectations with your staff for the upcoming year.
Purpose of the Performance Review
The primary purpose of performance reviews is to measure individual performance against the goals and objectives agreed to at the start of the previous year. I’ll dig deeper into this idea in a forthcoming post on Procurement Goals and Objectives.
Ask each employee to gather their final metrics and plot them next to their initial goals. This exercise reinforces the department’s goals and objectives to employees. Moreover, upon seeing their results, conscientious employees will honestly reflect about their performance before the actual performance review with their manager.
Structure of the Performance Review
Companies use a variety of evaluation systems, but most follow the same basic format.
A rating is assigned to a small number of essential competencies such as “Accomplishments and Results”, “Planning and Organizing”, “Interpersonal Skills” etc. There’s often an area of the performance review reserved for Manager Comments (see Practical Tips below). Finally, an overall score or rating is assigned to each employee – often the most problematic part of the process for managers.
High-performers naturally want the highest scores. Anything less may lead to pouting or worse. But what if you are fortunate enough to have a whole staff of high-performers? What if your company has implemented the controversial Forced Distribution or Bell Curve process for employee appraisals where you must assign 10% top score, 80% middle, and 10% bottom?
It comes down to judgment. If you’re hamstrung in the above situation, make it known jokingly to your staff that you can only award one ‘Exceeds Expectations” appraisal next year. Use it as an opportunity to introduce some good-natured competition among your staff, and make the metrics as transparent as possible along the way to avoid conflict later.
Executing the Performance Review
Regardless of how warm your relations are with employees reviews should be formal; this is good time to remind both parties of the nature of the relationship and demonstrates how seriously you take their performance.
Allow sufficient time for each employee appraisal. This is the employee’s one on one time with the boss and it should never feel obligatory or rushed.
Keep the conversation focused on the results. Methodically compare each metric or result vs. the objective. Make sure the employee understands your expectation for each measureable.
The conversation need not be limited to cold metrics. It’s also an opportunity to have a personal discussion with the employee about their strengths, opportunities, and aspirations.
The good might be: “You’re excellent at managing a variety of personality types” or “I really like the way you break down complex information to cross-functional groups”.
The bad might be: “I’ve observed that you struggle to communicate with some Engineers” or “You have an opportunity to sharpen your presentation skills”.
For each improvement opportunity, have potential solutions as well as specific examples ready: “I think you would benefit from Extended DISC training so you are better prepared to deal with different personality types” or “ I want to review your next couple presentations with you in advance and show you how to keep slides / topics flowing smoothly”.
The best performance reviews are the ones where your employees leave fired up and motivated for the New Year; metrics alone rarely accomplish this outcome.
- Deploy a 360 or rounded feedback template to the employee’s key stakeholders; this is particularly useful for assessing interpersonal skills
- Dump the essay format; use bullet points and semi-colons to string together short, sharp language when summarizing the employee’s performance; incorporate final metrics achieved in these comments
- The performance review is not an occasion for “gotcha” moments. Like steering a ship, micro corrections are necessary throughout the year. Nothing shared in a performance review should ever come as a surprise.
As another year comes to a close and we are looking at the start of a new one, we wanted to take this opportunity to wish you and your families a healthy and happy holiday season. We have enjoyed working together on your behalf to present information that we hope you have found useful this year.
We will be taking a break until January 6 while we plan our strategy for the coming year and have a few moments of wel-deserved rest and restoration. We are excited for the opportunities in 2014 and all there is to learn and share. Please check back with us in January at that time for updates.
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This week’s webinar notes are from a December 4th event presented by Ardent Partners on what they have dubbed “The New Procurement”. If you want to read more from Andrew Bartolini and his team, visit CPOrising.com.
I have read and reviewed a number of business publications, most of them directly related to supply management, but The CPO is truly a unique creation. This book captures the adventure of procurement by outlining principles and concepts for success – not through dry or prescriptive chapters – but through the very engaging story of a fictional CPO and the challenges he faces on the job and at home. Thomas Sutter, the main character (dare I say hero?), captured my attention immediately and held it right through the final pages. I’ll even admit (my apologies to the authors for cheating) that at one point I was so wrapped up in the interpersonal dynamics of the story that I peeked ahead to read the end so that I might relax and absorb the full message of the book as I went.
When we embark on a home improvement project, it is good to have all the appropriate tools and supplies. We inevitably are missing something or several things and that requires multiple trips to go procure them. It slows the process and adds expense. Alternatively, we have gotten too much of something which is a waste of funds and adds to the complexity when we want to dispose of the excess.
Change makes people anxious and frustrated. When a grocery store decides to move their aisles around, the consumer can’t find things easily until they get accustomed to the new system in place. Sometimes, the marketing team also changes the packaging. That favorite cookie or cereal is now hiding on the shelf, similar to the game of “Where’s Waldo”.