The Point

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.

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    One of the best things about having good relationships with publishers is that I end up reading and reviewing titles that range beyond procurement or spend management. And yet, there is no question that the value and competitive advantage of a well-managed supply chain runs right through the center of all business strategy books.

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    The rise of mobile technology requires that procurement solution providers and practitioners be innovative about potential opportunities for improvement and problem solving. Through virtual team models and global supply chains, the applications and requirements of mobile technology are coming, whether procurement drives the implementation or not. In a July 2013 article on ThomasNet’s imt Procurement Journal, Pat Toensmeier referenced a study about the expected adoption rates for mobile technologies in procurement. “A study by AnyPresence Inc., a Reston, Va., company that specializes in mobile business processes, products, and services, finds that 31.5 percent of respondents have deployed or will deploy mobile apps for procurement, among other functions, in the next 12 months. An equal proportion will do the same with apps for supply chain partners and shipping and distribution.”[1] As we approach the end of that 12-month period, no developments have surfaced that look likely to reverse the trend.

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    The Moment of Clarity was a joint effort by ReD Associates founding partners Christian Madsbjerg and Mikkel B. Rasmussen. Their careers have focused on studying human behavior, problem solving, and innovation. In this book, they apply what they have learned and observed to the challenges faced by businesses today. It is apparent to the reader that they are avid readers in their own right, and their bookshelves clearly hold titles representing a wide array of fiction and non-fiction topics.

     

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    Kaizen Kreativity is the fifth book by Dr. Tom DePaoli, and the third one I have reviewed. Like his other books, Kaizen Kreativity combines examples from his diverse professional past with easy to comprehend definitions and background. His lack of pretension is particularly appreciated since he often relates cases about Lean and Six Sigma. For anyone without experience using these methodologies, the terminology can be off-putting at best, and in the worst case scenario may deter people from realizing their benefits altogether.

     

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     Despite the fact that Marcy Phelps’ Research on Main Street is not necessarily written for a procurement audience, it offers invaluable advice as well as links to the resources required to carry that advice out. The idea of ‘local’ is not limited to the location of the researcher, but rather the information being sought. Another way of looking at it is point-point information, highly specific to a business need and detailed enough to motivate a decision.

     

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    “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.

     

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    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.

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    When we think about the concept of branding from a corporate perspective, we think of the associations consumers and stakeholders have formed in response to our company, products, logo, etc. From a procurement perspective, brand or reputational risk is one of the most important things we are stewards of when we make decisions about the supply partners our company will form relationships with. But the value of building, having, and maintaining a brand extends far beyond the corporate level.

     

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    Sustain Your Gains, by Michael McCarthy, is ultimately a guide to human behavior in the face of change. Although the initial sections of the book serve as a primer to Lean and Six Sigma methodologies, hints of what is to come in later chapters pull the reader forward to see the application of Process Behavior Maintenance (PBM) in action.

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    Supplier Relationship Management in the Supply Chain by Stuart Emmett is accurately titled – it is in fact a book about the importance and execution of supplier relationship in the supply chain. But because so many organizations do not have SRM programs (or would benefit from being more supplier-centric) it is more importantly a book about change. In order to get different results, we must think and act differently. This is a simple enough idea, but bringing about such changes in an organization is complex enough that few of us have reached our desired level of SRM maturity.

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    For anyone who has read the other books in the Vested Outsourcing series, Getting to We (published in August 2013) is the logical next step in the pursuit of more collaborative, value-based relationships between supply partners. A better way to think of the book might actually be as a ‘prequel’ to the others, stepping back in time to explain how to reach the point where you are working in a Vested relationship. Getting to We is the connection between the vision of Vested Outsourcing and the negotiating tactics necessary to turn the vision into a reality.

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    The End of Competitive Advantage by Columbia Business School Professor Rita Gunther McGrath provides a perspective on the way businesses should develop and maintain their strategy to remain competitive. Gone are the days when companies could achieve a leadership position in a market and then continue to dominate for decades without significant changes. Innovative companies develop products across traditional sector lines, making the industry-based model of competition assessment obsolete. McGrath advises defining competitive strategies based on arenas, which she defines as smaller market segments defined by consumer behavior and geography as well as the product or service being sold.

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    The idea of being green is certainly not new to corporations or to purchasing professionals for that matter. That does not mean that the effort is easy, or that the path to sustainable purchasing is clear. ‘Green Purchasing & Sustainability’, written by purchasing professional, author, speaker, trainer and consultant Robert Menard, is a practical book that will help you get started down that road.

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    I’ve reviewed quite a few books – most of which are on spend management or negotiation. Some have made me laugh, like Negotiation Mastery and Profitable Buying Strategies. A few have made me cry, and those will remain unnamed here. But I don’t think I’ve ever felt compelled to review a single chapter from a book until now.

     

  • When you walk into a place - school, restaurant, office - there is a certain 'vibe' that you can pick up on instantly. It is a product of the culture and the management that is there. 

    Tagged in: Culture Publications
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    Two years ago, we posted our review of ‘Common Sense Purchasing’ by Dr. Tom DePaoli. In September 2012 he published a new book that reflects a broader perspective on his experience and our profession. By taking a step up – or back – however you chose to see the difference between purchasing and supply management, Dr. Tom takes a new look at the challenges and opportunities in supply management and presents them by sharing many of his own experiences as an independent management consultant in 'Common Sense Supply Management'.

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    Earlier this year, we reviewed ‘Vested Outsourcing’, the first book in what has become a series of publications by Kate Vitasek and her colleagues on the evolving potential of mutually beneficial relationships between companies and their suppliers. ‘Vested Outsourcing’ was followed by ‘The Vested Way’, and ‘The Vested Outsourcing Manual’. Kate’s latest publication is ‘Vested: How P&G, McDonald's, and Microsoft are Redefining Winning in Business Relationships.’ I’ll include some background as well as an overview of the Vested philosophy at the end of this review. I encourage you to read my review of ‘Vested Outsourcing’ and to purchase one or all of the books in the series.

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    One idea plus one idea equals three ideas or more. You have a cow, I have a bull, together we have a business. When the output is greater than the sum of the inputs, this is value creation and it is this that has driven the whole progress of the human species.

    -- Simon Horton, Negotiation Mastery

     

    Negotiation Mastery by Simon Horton, an experienced negotiation teacher and consultant, is a practical and highly entertaining read whether you are a career negotiator or just wish your skills were a little stronger. In his decade-long career, he has helped hostage negotiators, law firms, financial institutions, and students from the graduate level through the boardroom improve their confidence and outcomes as they enter negotiations.

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    A cardinal principle of Total Quality escapes too many managers: you cannot continuously improve interdependent systems and processes until you progressively perfect interdependent, interpersonal relationships.

    – Stephen Covey (1932 – 2012)

     

    On July 16th, the world lost one of its most recognized self-improvement writers and speakers in Stephen Covey. His books, speeches and projects were aimed at improving and empowering individuals and the organizations and networks they belong to. His most well-known publication is ‘The Seven Habits of Highly Effective People’, written in 1989, which has sold 15 million copies and been translated into 32 languages[1].

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    I can tell you that windsurfing is very easy – except for the wind. The wind makes it tricky, of course. It’s not particularly difficult to find and rent great equipment, and the techniques are fairly straightforward. What messes the whole plan up is that the wind is unpredictable. It’ll change exactly when you don’t want it to. The same thing is true about customer service (it would be a lot easier if it weren’t for the customers). In fact, every single function of an organization has a wind problem.

    – Seth Godin, The Dip

    thedip

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    “The skills for becoming a champion caliber negotiator are acquired skills. Nobody is born with great negotiating skills. You are born with the skills of crying and breathing, all other skills you acquire throughout your life.” – Soheila Lunney

     

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    “The skills for becoming a champion caliber negotiator are acquired skills. Nobody is born with great negotiating skills. You are born with the skills of crying and breathing, all other skills you acquire throughout your life.” – Soheila Lunney

     

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    Good old Kenny Rogers, he gave us some great advice through the lyrics of the ‘The Gambler’: advice that stands true beyond the gaming table. Sometimes the best advice comes from the least expected place, and I have some advice for procurement professionals – from sales(*).

    Every week, I take a break from supply management topics to learn about sales through webinars, white papers and blogs. Officially, I do it for ‘The Flip Side’, a Buyers Meeting Point resource that helps procurement professionals better understand their sales counterparts. Unofficially, I do it because creativity and objectivity can be elusive, and listening to sales’ perspective helps.

    This perspective has changed the way I see the role of the individual procurement professional, the role of the department, and how we should leverage non-traditional approaches in search of better than usual results.

    We are all in sales.

    I used to see sales people as professionals compensated for closing deals. But contracts are a side effect of an effective sales process. The core of the sales process is quickly and accurately diagnosing opportunities for improvement and then winning over prospects to the recommended solution.

    Procurement does this all the time – or at least we should. We ‘sell’ finance on a new opportunity to drive efficiency. We ‘sell’ the executive team on the strategic advantage we represent as an in-house dedicated function. We ‘sell’ internal stakeholders on the merits of a new supplier or a standardized specification that will save money.

    The key is to be a quick study, sometimes adapting mid-meeting, in response to organizational requirements. We must prove we understand the challenges at hand, sometimes to colleagues that don’t have a clear perspective themselves. Once you accurately articulate a problem, brainstorming can begin on solutions to be ‘sold’ to internal customers.

    Sales people believe buyers have the advantage.

    I benefit the most from the Q&A that takes place during sales webinars. What do sales people really think of procurement? What kind of advice do they get from their mentors?

    I’ll over-generalize to make a point: sales people see procurement professionals as a steely cold bunch. (One webinar participant commented that procurement conference rooms and offices are the coldest places on earth…) Our poker faces have apparently done the trick, because many sales people would like to check our backs for control panels to make sure we are human.

    Sales believes procurement holds all the cards in the negotiation process. I have heard our advantages repeated multiple times from different sources: “Procurement already has access to so much information that we struggle to appear well-informed about our own market.” “We can’t enter the sales/buying process until they decide it is time for us to start participating.” “Procurement is so active in their use of social networking during the purchasing process that we are outpaced by our customers.”

    Sales can compete on value creation.

    We know that negotiating cost savings is no longer enough. We need to create value for the organization. We hear it from executives, associations, publications, and thought-leaders. Knowing how to get started is a challenge because every situation and opportunity is different.

    Successful sales organizations evolved in response to the need for value creation a long time ago. With strategic sourcing came apples to apples comparisons on price alone. Suppliers couldn’t refuse to provide pricing, so they tried to influence the decision-making process by proving themselves of such value that they broke the mold.

    The time has come to recognize supplier innovation. The increased focus on value by our corporate leadership, and the ability of sales to speak their language, will either open a door for procurement or clear a path right past us. If a sales person sees an opportunity to bypass procurement and reach the right execs, they will take it. Capturing value does not mean surrendering in the battle over price, just balancing costs and benefits. In that scenario, I want to be the one holding the scale.

    Looking back and ahead.

    The big-picture realization from my year of visits to The Flip Side is that the procurement/sales relationship is not about us v. them but about all of us. They feel the same stresses we do, and often see us in the driver’s seat when we think they are driving. They aren’t terrible people (mostly) any more than we are bloodless cost reduction zombies.

    We can’t fully collaborate with sales in every category, but when the conditions are right, partnering with a supplier is the only way to a better solution. It goes against most of what we know about creating competition and harnessing the forces of the market, but recognizing opportunities for collaboration can be the difference between tactical and strategic category management. After all, ‘Every hand’s a winner, and every hand’s a loser … the secret to surviving is knowing what to throw away and knowing what to keep.’

    (*) Note: This post originally appeared as a guest post by Kelly Barner on Procurement Inisghts.

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    If you watched Peter Faulk play the character Lieutenant Columbo in the thirty years ‘Columbo’ was on television, you undoubtedly saw him break a case by turning back at the last moment and asking, “Just one more thing…”, a question which always ended up breaking the case.

    Maybe procurement need to stop and ask another question or two as well. In a recent blog post, ‘What Questions Should Your Clients be Asking’, sales blogger S. Anthony Iannarino talked about the challenges sales people face when they are not able to communicate the value of their solution because the buyers they work with are not asking the right questions. His advice provides some techniques for redirecting the conversation or asking the missing questions so that the necessary information gets across.

    While we want to have a complete picture of each solution so that we can accurately compare our options, we’ve all made the mistake of asking questions that are so open ended that sales people talk ad nauseam about something we can't compare across the suppliers in contention. But that doesn’t mean there aren’t pieces of information we are missing out on.

    Buyers Meeting Point’s long time advisor The Sales Guy has always advocated asking sales people something about their compensation package or their company's business development priorities so those factors can be brought into a thorough evaluation. What else should we ask?

    Here are a few questions that The Sales Guy suggests working into your face-to face supplier meetings. Some are relevant for incumbents and some for new companies you are evaluating, but all of them will allow you to put together a better category management strategy and contract.

    1. “If you are selling to my competitors what products and services are they buying more of and what is the value provided?”  “What are they buying less of?”
    2. “We are spending $XXXK dollars with your company on an annual basis.  If I was to spend that same amount differently what changes would you recommend and why?” 
    3. “What can our companies collaborate on that would help your company bring new products to market and provide competitive advantages for my company?”
    4. “What business model changes is your company introducing and how might they be advantageous to my company?”

     

    If you have a question for The Sales Guy, click here to submit it and we will get you an answer!

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    “Reverse auctions are loved by corporate purchasing managers, loathed by suppliers, and rarely discussed publicly by anyone involved.”

    – Max Chafkin, Inc. Magazine

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    Sometimes the most interesting part of a blog post is the comment thread that follows it. Such was the case with a recent blog post on the Harvard Business Review Blog Network.

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    This week’s trip to The Flip Side is based on a post written by Reed Holden on his blog Pricing With Confidence: ‘Procurement: Kings or Jokers’. Holden has written a number of books on pricing and negotiation. His primary focus is helping Fortune 1000 B2B companies in a number of industries maximize their growth through setting optimal go-to-market strategies.

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    This week’s Flip Side coverage comes from last week’s webinar on negotiation hosted by Think! Inc. The primary speaker was Brian Dietmeyer, CEO and President of Think! Inc and author of several books on negotiation including Strategic Negotiation. Although this event was predominantly geared to a sales audience, negotiation is negotiation. If you aren’t sold on the connection to procurement performance, read on to learn more about the ‘moment of truth’: when a sales person is facing their procurement counterpart across the negotiating table. 

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    On July 10th, Value Selling Associates hosted their monthly sales training webinar on Deliberately asking good questions. If you are interested, you can listen to the event on demand (without registration) on their site. VSA President and CEO Julie Thomas opened the event by describing the Socratic method, a problem solving approach that involves asking a series of questions to arrive at an answer.

    The connection between the Socrates’ philosophy and the modern sales process is the idea that it is possible to be regarded as wise without having all the answers. In other words, you can ask a lot of questions and still be perceived as knowledgeable.

    There are obvious benefits to the approach known as ‘Socratic Selling’. The more questions they ask, the more talking we do, the more information they collect – allowing the supplier to craft a proposal that more closely meets the goals and objectives of the buying organization. On the other hand, not all products and services lend themselves to this method. Transactional, price-driven category decisions don’t require a supplier to impress us with their deep thoughts – just to have the information we need to compare options and make an informed choice.

    Tim J. Smith, Ph.D., and Chief Editor of the Wigleaf Journal (dedicated to Sales, Marketing, and Entrepreneurship), wrote a piece on this topic called ‘Pedantic or Socratic?’ where he compares two approaches to demonstrating wisdom in sales: one where the sales person effectively ‘tells’ the buyer what they need, and one where the sales person leads the buyer to a desired conclusion with a carefully crafted set of questions. Both can be effective in the right circumstances. 

    Pedantic Selling

    Pedantic selling approaches are easy to recognize: presentations full of details about features and functionality that clearly communicate availability, pricing and benefits.

    This approach works perfectly well with traditionally purchased indirect categories like office supplies or janitorial services. There are no deep dynamics to uncover, just an office full of professionals that want to have pens on hand and clean workspaces.

    Socratic Selling

    Socratic selling, also called consultative selling, are focused on uncovering information about the buyers motivations and needs, both to inform the sales team and to help the buyer better understand their own position.

    When a category is associated with a change in strategy or will enable operational change, deeper probing is in order for both sales and procurement.

    Knowing the Difference

    Many sales organizations are trying to move to more Socratic or consultative models, because they believe that such an approach will result in increased trust, longer contracts and larger deals. Regardless of the prospective size of your purchase, you are likely to encounter some open-ended questions early in the sales/buying process as the supplier rep works to ‘qualify’ the deal: to figure out if and when it may happen, and how large the opportunity is.

    As you get further through the process, however, a Socratic sales approach can actually be a red flag. Is the sales person trying to build a foundation on which they can either up sell you or secure a longer contract? If the questions being asked seem to repeatedly lead you from the product or service you are focused on to a complimentary offering, beware of how it affects your buying intentions. Determine up front whether your category is likely to be relationship-based and don’t let anything short of a full internal team meeting change your course.

    But if your purchase is strategic in nature, and if it will require the long-term cooperation of the solution partner you select, learn to appreciate and benefit from a Socratic sales person. Take the opportunity to learn as much as you can about what your organization really needs and what will ultimately motivate an award decision and a solution choice. Just remember that you don’t have to answer all of the questions out loud to benefit from them being asked…

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    Last week’s webinar on reading income statements, hosted by The Executive Conversation, provided a great overview of one of the most common financial statements. You can watch an on-demand version of the audio and video without registering by clicking here.

     

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    Of the many causes of communication breakdown between procurement and suppliers, one of the most contentious is the statement of requirements. Before an RFP or RFQ is issued, procurement spends considerable time with internal stakeholders understanding category requirements as they stand and then probing deeper to determine what are really requirements and what the stakeholder just wants.

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    Last week I attended a webinar run by the Sales Management Association on the topic of social media and sales operations. This event gives us a second look at the topic we first considered last week with the TAS Group’s ‘Enabling Social Enterprise through Sales’.

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    Last week I attended a webinar run by the TAS Group called ‘Enabling Social Enterprise Through Sales’. The focus of the event was to look at how much time sales professionals are spending on various social media sites and what kinds of activities they are engaged in.  If you are interested in experiencing the content for yourself, you can view the webinar on demand (registration required) or view the slides on slideshare (no registration).

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    One of my favorite sales blogs is, ‘The Sales Blog’ written by S. Anthony Iannarino. He is a sales executive and coach that believes in the value sales people can add during the buying process.  Since we are mentioning him this week on the Flip Side, I’d also like to extend our congratulations to him on recently hitting a milestone 1,000 posts.

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    As a buyer, have you ever noticed how much effort sales teams put into the training, strategy, and education of their people? If you type "sales training" into Google, you get well over FOUR MILLION hits. In order to put that figure into perspective, typing "procurement training" into the same search engine pulls only 235,000 results.

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    This week’s Flip Side post takes us to a sales article on ‘Selling to the Four Temperament Styles’ by John Boe.

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    This week on The Flip Side, we look at a blog post from SalesTrainingAdvice.com on The Most Underutilized Strategic Advantage. With such a promising title, the answer to the question must be something big – huge even to be THE MOST underutilized strategic advantage.

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    As the economy starts to rebound and leverage positions change, becoming a ‘customer of choice’ is being discussed in many procurement conference rooms. You would think that us sitting around discussing how to be the most fabulous customers possible would be music to a sales person’s ears!

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    Last week, I attended a ValueSelling Associates webinar called ‘Closing the Gap: Your Sales Process and their Buying Process.” In this event, VSA looked at the differences in timing and expectations between the supplier and buyer sides of the procurement process. Two types of value come from this kind of event.

    • We get a window into Sales’ perception of procurement professionals and our process, and
    • We learn how to improve our performance by hearing which parts of our process may be preventing us from accessing potential value or innovation.
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    In this week’s Flip Side coverage, I want to take you through a sales-oriented post from a blog called The Pipeline on ‘Selling to Procurement’. The Pipeline is written by Tibor Shanto, Founder and President of Renbor Sales Solutions Inc., and creator of Objective Based Selling.

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  • “As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.”  John Fitzgerald Kennedy

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    IBM's Institute for Business Value (IBV) just released the largest, most comprehensive Chief Procurement Officer Study ever conducted, with participation from 1,128 CPOs from organizations with annual revenue in excess of US$1 billion. According to the study, “Companies with high performing procurement organizations have profit margins 15 percent higher than the average company and 22 percent higher than those of companies with lower performing procurement organizations.”

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    Many of us have taken the Myers-Briggs personality test, either in school or on the job. One of the core principles is that there are no bad personality types. Taking the test is supposed to help you know yourself better, understanding your natural inclinations. That way, when you are under stress, not only will you be able to predict how you are likely to react to different situations, you may be able to alter your reaction to reach a desired result.

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    Last Saturday, Cindy highlighted a blog post by John Maxwell, a leadership coach, on how to fail successfully. There is much to be learned from our failures, and in many cases they are the price of admission to the victory celebration at the end of the journey. Thomas Edison is a fantastic, if complicated, example of success despite setbacks. We all know how many tries to took to make the light bulb a reality, especially because of the quote Cindy used to open her post:

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    In order to help procurement better position ourselves and communicate through all of the channels available to us, Buyers Meeting Point reached out to a colleague with a background in marketing and experience in the procurement space. Sheryl Johnson is the founder of BD-PRo Marketing Solutions and focuses on implementing creative marketing and business networking strategies for small and medium sized businesses, as well as a professor of marketing at the Community College of Allegheny County in Pennsylvania.

    Click here to read more about the 'Marketing of Procurement' series of posts on Buyers Meeting Point.

    Click here to read our last post in the series, Why Having a LinkedIn Account is Critical in Today's Business Environment.

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    In order to help procurement better position ourselves and communicate through all of the channels available to us, Buyers Meeting Point reached out to a colleague with a background in marketing and experience in the procurement space. Sheryl Johnson is the founder of BD-PRo Marketing Solutions and focuses on implementing creative marketing and business networking strategies for small and medium sized businesses, as well as a professor of marketing at the Community College of Allegheny County in Pennsylvania.

    Click here to read more about the 'Marketing of Procurement' series of posts on Buyers Meeting Point.

  • Today’s eSourcing Wiki-Wednesday topic is How to Find a Good PSP.

    When we have had to hire someone to do work on our house, we got references, interviewed multiple contractors and of course reviewed their proposals. While it is not just about the money, that is clearly a key factor. I am sure that drill sounds familiar to many of you.

  • Today’s eSourcing Wiki-Wednesday topic is Managed Services is not Tradtional Outsourcing.

    Managed Services works with the client on strategic areas that the client can not do for themselves either from an expertise or resource perspective. There are also areas that are high volume and transactional in nature which is another strong candidate for Managed Services.

    I came across this article from a few years ago but it does still hold true today. ISM has published a short article, When Procurement Outsourcing Fails: How to Sidestep Easily Avoidable Blunders.   

    Authored by J. V. Kelly, he spends some time looking at the evolution of the procurement role and how that has played into the outsourcing trend. In most organizations, purchasing is no longer just a transactional function but takes a more strategic approach to the process and the results. Like any other relationship, setting the appropriate expectations is key. Here are some unrealistic ones that Kelly mentions:

    Unrealistic Expectations

    • 50% cost savings in the first year? Highly unlikely.
    • Reduction in cycle time to 1 month on all sourcing engagements? Not realistic.
    • Expertise in every category of spend? Many outsourcing firms do not offer this.
    • Complete demand management with no maverick spend? Mandates don’t work, buy-in is more effective.

    They article warns against outsourcing all procurement functions. They recommend keeping the strategic areas internal.

    What has your organization done in this area? What expectations were set and how much of your sourcing is done internally versus externally?

  • The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

  • Today’s eSourcing Wiki-Wednesday topic is The Basics and Advantages of Procurement Outsourcing. This is something that has been reviewed and utilized for several decades at this point.

    Many organizations realized they should outsource administrative functions such as payroll and accounting and IT/Telecom. This allows the key resources to focus on the core business strategy and really drive them to the next level. The same can be said of the procurement function, either in part or as a whole.

    If a company is going to do that, they must be careful to arrange it properly to truly take advantage of the benefits and not to get bogged down with inefficiencies. this article offers Six Top Tips and is focusing on IT outsourcing. However, I feel it can be utilized for any business function.

    When done correctly, the various individuals truly work as a team. If you look at the picture above, you can not tell who is an internal associate and who is an 'outsourced' resource.

    Top tip #1: Define SLAs and OLAs

    A service level agreement (SLA) is the foundation of any outsource contract and provides the standard for expected service levels. This must be agreed on between both the outsourcer and client, and once established, will outline the requirements such as time-to-respond and mean-time-to-repair.

    Top tip #2: Communication – a two-way street

    Communication is an important component of a successful outsource contract and should be a ‘two-way street’ whereby feedback is given from both the outsource provider and the client. If communication is not clear and well-structured from all sides, issues and problems may ‘slip through the cracks’ and impact the business. This in turn will impact service delivery, which may fall below expected levels, resulting in poor outcomes.

    Top tip #3: Appropriate skills levels

    It is vital for the outsource consultant to have the appropriate skills when engaging with a client. If consultants are not equipped with the required skills to match the needs of the client, they will not deliver the required services efficiently or effectively.

    Top tip #4: Culture fit

    If the culture fit between the client and outsource provider is not aligned, it can lead to poor service delivery. Outsource providers should also be flexible and sensitive around the issue of culture fit, and if there is a potential problem, to proactively remedy.

    Top tip #5: Measurement of service

    All aspects of the contract, including the SLA and OLA, should be monitored on a regular basis to ensure the highest levels of overall satisfaction.

    Top tip #6: Maintain the management of the contract

    Customers who maintain control and incorporate regular communication around this will typically receive higher levels of service and greater value than organisations that don’t.

     

  • Many cultures celebrate the harvest and offer thanks for a bountiful season. As the United States enjoys their Thanksgiving, we felt it was appropriate to thank those who walked along with us this year on our journey. No one succeeds alone and we are certainly aware of that!

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    Today’s eSourcing Wiki-Wednesday topic is Harnessing the Power of Community. This is the last of 21 strategies for innovation in procurement through next generation sourcing. If you are interested in the rest of the series, you can read them on our Wiki-Wednesday news page.

    This topic is well timed, as the United States plans to take a short break for the Thanksgiving holiday – we stop and take a moment to realize just how many people are critical to our successes. While it has always ‘taken a village’ and there has never been an ‘I in team’ these days our communities are increasingly virtual. Associations that were previously regular meeting spots have moved online. Our personal and professional networks are larger, but we bear responsibility for making sure they run just as deep. It means very little to have 500+ connections if you don’t know who any of them are well enough to leverage their knowledge and experience.

    Since Buyers Meeting Point is a virtual entity, we’ve gotten pretty good at building and maintaining productive relationships with people we will probably never meet. Here are a few of our tips for virtual collaboration:

    • Book time on your calendar to join discussions on LinkedIn. This doesn’t have to mean a daily or weekly time commitment. Once a month, allow yourself an hour to browse a few of the groups that are large enough to be interesting but not so big that they aren’t being moderated effectively.
    • If you have a good exchange with someone via email (or other social media channel) find an opportunity to jump on the phone. It may only take 15 or 20 minutes, but making the effort to introduce yourself ‘the old fashioned way’ will not only make an impression on the person you’ve connected with but will pay dividends in terms of what you can accomplish in email moving forward.
    • Do a favor for someone. This can be as simple as retweeting something of interest or giving a #FF (FollowFriday) where you think your followers will be interested. Take the simple step of “Liking” a post or a discussion with your Facebook account. People who make an effort to put good work forward will appreciate the simple gesture and you may be able to open a door to a better connection.
    • Remember to ask for help when you need it. If you find yourself stuck, look through your network to see who might be able to help you out. People love to be regarded as knowledgeable, and the fact that you respect their experience enough to ask for their opinion will make them regard you positively in return.
  • The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

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    The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

  • The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

  • The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

  • The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

  • The Seven Habits of Highly Effective People, first published in 1989, is a self-help book written by Stephen R. Covey. It has sold more than 25 million copies in 38 languages worldwide, and the audio version has sold 1.5 million copies, and remains one of the best selling nonfiction business books.

    The approach continues to be pertinent in every day life at work and at home. Buyers Meeting Point will be reviewing each of the Seven Habits over the next few months.

  • This past week, the world lost one of the inspirational leaders and mentors when Steven Covey passed away. There are quite a few blogs and articles posted that are asking how did Steven Covey’s books and seminars impact you. For me, I was first exposed to his teachings in a course I took called “What Matters Most” It was a phenomenal time management class that helped identify priorities and the way we spend our time in our WHOLE life – both work and personal . I particularly remember the exercise to write the speech that someone would give about you on your 80th birthday. I was in my 30’s at the time so of course that seemed like so far away. But it certainly made everyone pause to reflect on what was really important.

    I was so moved by the tools and the class, I recommended everyone on my staff attend the class over the next year as part of their performance objectives. Pretty soon, it was a class required for all management in our organization.

    I then read the “7 Habits” book that of course millions of others have as well. I use his phrasing in my every day speech such as “First things first” and “Sharpen the Saw”. I had the opportunity to hear Steven Covey speak during one of his seminars. He was so approachable and normal. I was impressed that he could be a father of nine and balance that with his speaking schedule and writing books too.

    I remember the week after I heard his lecture, I was in a parking lot and witnessed a confrontation between a truck driver and a passenger car. I utilized the "Seek first to understand and then to be understood" approach and it worked like magic. It was beautiful and amazing all at the same time.

    What I find most refreshing is that nothing of this is too complicated and very easy for all of us to understand and implement. Of course that is what differentiates one from another. Do they apply these simple principles? Some days yes, and other days not so much.

    I have found a great deal of value out of Steven Covey's books and philosophies. It is very fitting that Steven Covey's organization merged with Franklin (of Benjamin Franklin of course!). I am sure if they lived in the same era, they would have had some very interesting conversations.

    The "7 Habits" has been out for over 15 years. If for some reason you have not read it or you are new in your professional life, I would highly recommend it. The book is entertaining, thought provoking and easy to read.

    Steven Covey will be missed. His legacy will impact many for years to come.

    Tagged in: Steven Covey
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    Note: This post by Kelly Barner originally appeared in the March 2012 PSD Group Procurement & Supply Chain Newsletter.

    In this week's eSourcing Wiki-Wednesday excerpt on Seven Facets of Cost Reduction and Avoidance, compensation structures are brought into question as they incent procurement professionals to behave a certain way, 'Like all employees, a supply manager will engage in behaviors rewarded by the company. This will create a problem if cost avoidance or cost reduction efforts beyond hard savings do not count toward a supply manager’s compensation and performance.'

    As organizational expectations of procurement increase, many practitioners are questioning the structure of their compensation plans. Traditionally, procurement professionals received a straight salary. If there was a bonus structure in place, the bonus was typically based on corporate performance against stated goals and qualitative individual performance rather than savings targets.

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    In a recent Buyers Meeting Point guest post Bryan Robinson asked What if the US Government Embraced Strategic Sourcing?

    Cynically upon reading the title my first thought was... "Nothing."

    The issue isn't FAR and it isn't the people doing the sourcing, like nearly all things it comes down to incentives.

  • Editor's Note: The application of strategic sourcing and strategic procurement in the public sector have generated a significant amount of discussion from practitioners, thought leaders, and solution providers. If you are interested in reading more about the opportunities that may exist, we recommend Generating Economic Benefit and Growth Through Smarter Public Sector Procurement, a white paper by Colin Cram.

  • There has been a lot of focus in the past year on Supplier Relationship Management, and rightfully so. As the efforts of Strategic Sourcing initiatives begin producing diminishing returns, SRM is heralded by most to be the next step: focusing more on delivering value to the organization and developing relationships that can produce competitive advantages in the market. However, an SRM policy is only effective if the proper suppliers are in place, which is why it is routinely classified as the next step after strategic sourcing. There is little value in curating and managing relationships with suppliers that are not firmly aligned with your organization’s strategic goals.

  • This is the last in a series of posts on performance reviews and objective setting for the start of the New Year. Click here to read my recent posts on performance reviews from the manager’s and employee’s perspectives, as well as objective setting for procurement managers.

  • Are you just joining us? We’re working our way through a series of posts on performance reviews and objective setting for the start of the New Year. Click here to read my recent posts on performance reviews from the manager’s and employee’s perspectives.

    If your company works on a calendar year financial close schedule, your Annual Operating Plan (AOP) for 2014 is probably well-developed by now. While these AOP objectives will form a large part of your staff’s goals and objectives, a more comprehensive approach is required for achieving great things in 2014.

    Developing and effectively communicating goals and objectives to your staff may be the most crucial thing you can do as a manager.  

  • 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.  

  •  

    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.  

    Get Personal

    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.

    Practical Tips

    • 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.

     

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    The following question and response are in the ISM – Purchasing & Supply Chain Professionals group on LinkedIn. If you would like to join either the group or the ongoing discussion, click here.

     

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    Click here for part one of this series.

    “SciQuest, originally an e-market exchange, went public in 1999 with a $2 billion market cap. Two years later, SciQuest was on the verge of shutting its doors: the gross profit margin was running at 2% and the company was burning $25 million a quarter. With only $50 million in its coffers, this prototype for the dot.com era was on track to run out of cash by year’s end.”

    The above excerpt from The American Business Awards 2008 Winners website made considerable references to the areas upon which I touched in my 2005 white paper on SciQuest. Specifically, was the SciQuest value proposition scalable beyond the cottage industry success that enabled it to grow to the point of going public with a $2 billion market cap in the first place?

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    In my July 10th, 2013 post “Forrester’s Duncan Jones and His Big Bang Theory Relating to Market Evolution” I had made reference to Jones’ comment regarding the IBM acquisition of Emptoris.

    Specifically his remark that it was “too early to expect IBM to have coherent plans for what to do with its (re Emptoris’) services procurement product.”

    I of course did not agree with the totality of Jones’ position as it appeared he was suggesting that “acquisitions such as the one made by IBM when they acquired Emptoris are largely intuitive and representative of a nebulous fear of falling behind as opposed to being a reflection of a deliberate, forward thinking strategy.”

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