Coaching in Awkward Situations

Prologue

Coaching moments are not always obvious. What might start out as a humorous, questionable, or awkward situation may evolve into a perfect opportunity to step back and provide some impactful advice and counsel.

Our team’s global teleconference calls frequently provided just that chance. We regularly had ~300 people from more than 10 countries and 50 locations on our quarterly updates. Our operations reviews had slightly fewer participants.

You know the drill – regular, virtual meetings to update everyone on the progress and activities of the organization.

Typically, you learn to recognize voices quickly. Regardless, many insist on continuing to re-introduce themselves to the audience that already knows them well. “Yes, Emily, please continue.”

You also learn speakers’ habits … especially of those who participate frequently. Some speakers may have speech patterns or verbal ticks that can become annoying to some audiences. Some may even become chat-room fodder for the distracted teleconference meeting participants.

Let’s start here.

 

Saying Um

When Opportunity Strikes

Conference calls can be tough. Staying on track and being both effective and efficient with time is a challenge. Echoes due to poor phone connections, background noises, the unintentional use of the mute button, and questions such as “Can you go back one slide?” make achieving all of the call’s goals difficult.

One of our peer directors that had a key role in cross-organizational communications was required to speak often; he regularly led the conference calls. He had one of those vocal habits that grated on people, like fingernails on a chalkboard: he constantly used filler expressions. Filler expressions are useless words or phrases that create a pause in the conversation such as, “I mean” or “you know.” If used infrequently, they are less obvious as audiences usually focus on digesting key messages rather than analyzing every single word streaming from the speaker’s mouth.

Most of us are prone to use a filler word or two. Like, I mean, you know, those words that do, er, absolutely nothing for the content of the conversation other than creating an, um, you know, annoying or distracting pause. Right?

Derek’s vocalized pause of choice was “Um” and he said it quite often. Actually, he said “um” so often that nearly everyone on our calls became absorbed with keeping and posting the “count” on a subgroup instant message thread during our 100+ person calls.

“10! 25! 50!” And, so it went. Needless to say, this little “joke” got old fast and meetings devolved to the point where we all thought, “I hope Derek is not speaking today.” Unfortunately, he always did speak and everyone continued to keep score, whether consciously or subconsciously.

During one such two-hour meeting the count neared 100. Something had to be done. Instead of Derek’s intended message coming through to the audience, the “ums” seemed to completely obscure his important business communications.

What should be done about this?

 

Stop Saying Um Star Trek

Time to Coach

I thought about this for a bit after one call and felt terrible that one of my peers was unknowingly being mocked due to something that many speakers suffer from, so I called his office.

“Hey, Derek. What did you think of that call?” We chatted for a few minutes. “Derek, I have a question for you. Has anyone ever given you feedback about your speaking style?” “No, Michael, no one has. Why?”

I knew Derek well and I was confident that he wouldn’t mind my ribbing him so I decided to use his filler word of choice in my explanation.

“Derek, um, I want to share something about, um, the way you, um, speak during our calls. Um, you have a tendency to, um, say ‘um’ often. In fact, way too often.”

No one had ever bothered to share this issue with Derek. I was nervous at first, but he took it well. His involvement in our organization and business meetings was too important for his communications problem to be treated as flippantly as it had been.

Derek asked, “What should I do about it?” I inquired if he had ever considered Toastmasters. He hadn’t. I suggested that he seriously consider joining them and added that the company would probably pay for it.

He thanked me with deep sincerity and an also-noticeable degree of embarrassment. I told him that he’d do just fine!

Derek enrolled in Toastmasters shortly after the conversation. I told our boss what I had spoken to Derek about to ensure that the idea would gain traction.

 

Bad Habits Die Hard

And In the End

I shared the conversation with several of the scorekeepers over the next few weeks so that the background games would stop. Improving the habit of using filler words takes time.

At first, Derek’s pauses were more awkward than natural as he focused intently on reducing the “ums” that had infiltrated prior conversations. Sometimes improvement comes after a step or two back. By the time six months had elapsed, he was well on the way to being completely de-ummed.

At one point later that year we were together and discussed what he had been doing. Joining Toastmasters was a seminal moment for him. It had dramatically improved his speaking pattern in several ways and he was grateful that someone had been brave enough to make him aware of this habit. The conference call tracking games were now ancient history.

 

Making It Work … For You

What made this coaching experience successful? First, it started with a clear example of an issue to be resolved. Second, it was addressed during a private conversation because coaching is best done one-on-one as it keeps the recipient from becoming defensive or embarrassed. Third, the approach was rooted in trust, authentic concern and support. Derek had no reason to question my motives for speaking with him despite the levity of the approach I had elected to use.

As a professional, colleague, or leader, one has to remain conscious of what transpires in a given setting. Coaching moments rarely advertise themselves with bright, flashing neon lights. Most of the time, they are more subtle such as in the story above where they may present themselves in a more embarrassing or awkward manner.

True coaches and mentors do not shy away from these opportunities. Rather, they address the situation as a coach or advisor should, directly and candidly with the coachee. More often than not these opportunities develop into a successful endeavor.

It is very important to remain aware of the environment in which you and your colleagues are in. The subtle undertones of office humor may actually be a sign of the need for coaching intervention. The next time you encounter a situation that may require coaching, identify the issue, devise a plan, and, as a team, come up with a solution.

 

Michael Massetti is an Executive Partner with Gartner who really does enjoy being a supply chain professional! Seriously. All opinions are my own.

Additional articles about coaching and leadership from Michael …

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Dear Dad …

Dear Dad,

Happy Father’s Day. The last time we got to spend Father’s Day together was 1979, a very long time ago. I was not yet 22. Just over one year later, you left us. It seems like forever ago. More time has passed since you died than the time I got to spend with you. We missed the best of times – the transition of a hyper-active, over-achieving first son into manhood and fatherhood.

You left suddenly on July 27, 1980 after a very long battle with heart disease. The same ugly disease that took your mom when you were only 9, your oldest brother before he turned 40, and your youngest sister. Thankfully, that gene seems to have been thwarted.

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I was driven by you from as young an age as I can recall to be successful. No matter how well I did, “You can do better, Michael” was what you told me. It’s never left my psyche. I compete with myself to this day – sometimes that’s been great for me, others not so much.

I always wanted to live up to whatever hopes and expectations you had for me. I put the picture of you and me sitting on a dormitory bed at Notre Dame after the graduation ceremony in 1979 on social media every year. I know how proud that made you, you never got to finish high school. And, the one with us wearing hats on our couch with the caption “Men in hats!”

I never got to hear directly from you about how proud of me you were. Mom always told me when we reminisced about you. I learned a lot about it at your wake and funeral when the long line of friends and colleagues you had paid tribute. It did not take away the sting of your death.

I never got to call you when those life’s moments faced me and I was not really sure what to do. I never got to call you when celebrating a great moment, like the birth of my two daughters. They never got to see either grandfather as both of you died well before your times. Trust me, there were many times I needed to call you …

What lingered in my mind too long was the summer after 4th grade when you punished me to write “I must be good and I will be good” after a school year of straight A grades but “Not Acceptable” in conduct – I was very hyperactive and not challenged in school. Nevertheless, it was a very long summer being stuck in the house every day. Regardless, I knew you were serious.

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What I know now that I did not know then is that you developed in me a very strong sense of self-confidence. The hyperactivity of youth became a constant personal energy source. I am always positive with a hopeful outlook on life. If I’m known for anything, it’s the smile and infectious energy that I exude, thanks to you. You instilled that hope and faith in me while pushing hard to be the best I could be.

You’d be very proud of many of the things that I’ve accomplished in my career. You’d also be disappointed of the mistakes and bad judgments I’ve made. It’s all part of life. If there’s one thing about life that I’ve learned, it’s the fact that there are no guides to al

l the situations that you will face. “C’est la vie” is one of my overused clichés.

I wanted to be a great father, a caring and loving dad. There are many great memories for my girls but many difficult moments, too. It was almost 10 years between your death and the day I got to hear “Happy Father’s Day” said to me. It was almost more 10 years afterwards that the enormity of you being gone really struck.

I was laid off of work in 2001 but was back working in just under a year, I was fortunate. But unemployment hit me hard, harder than I could understand or admit at that time. I recalled

 

how hard our lives were in the mid-70s when you were out of work. I feared that moment for my own life every day since and I still do as I approach 60. It scared me more than anything had up to that point in my life.

Being out of work changed me forever, in many good ways and some bad. I really needed you then, but there was no one to call. The void was overwhelming. It was Father’s Day in 2004 that it really hit me about you being gone, I broke down and cried for what seemed like an eternity.

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When I look back on our short time together, I remember the great things like the first baseball game when you and our neighbor kept laughing at the goofy jokes of the ushers. The next thing we knew, we were in the seats behind home plate for the 2nd game of the double header. Or, how we managed our way through a weekend camping trip of nothing but pouring rain.

 

 

 

I remember the confidence you showed as we came home from a family visit in NYC when you gave me the keys to the car during another rainstorm while mom sat white-knuckled in the backseat of the car. With rain as the theme, our drive to Notre Dame the first time was wild when we could not see past the front of the Triumph Spitfire on I80 near Cleveland. All good memories.

It’s now 2017. 60 is just down the road. I’m healthy, employed, happily married, and watched my children grow. One is on the verge of great success. The other’s path is still uncertain. I did my best to get them where they have both gotten to. I know that they have to take it from here. I just wish they had met you.

Mom died three years ago. She lived happily after you left with her second husband. It’s just me, Rick, and Joanne now. Thankfully, we’re connected to many of our cousins and your closest sister, Millie.

I just visited my wife’s dad for Father’s Day, another NYC Italian of immigrants, just like you. He’s 96 and still kicking. I call him Dad. I tell my wife how lucky she is to have him around for her entire life so far, it’s a blessing.

I am grateful for every day that I have. I’ve had a lot more time than you did and I appreciate the chance to see my family all grow. I have 2 step-grandchildren, too. What a joy that is!

Well, it’s time to call it a day. To sum it all up, I beckon the call of Frankie, your musical love that has passed on down to me. In the song that you took as your own that I have since co-opted he says, “Regrets, I have a few. But, then again, too few to mention. I did what I had to do and saw it through without exemption. And more, much more than this I did it my way!”

 

Love you, Dad!

Michael

 

From Excellence to Legendary

The 3 plays in 372 days that made Derek Jeter a baseball legend …

 

Prologue

It’s not always easy to identify that moment in a professional athlete’s career when he or she has passed through the threshold of greatness to legend. By the time Michael Jordan finished his 3rd NBA championship, his legend was secure. For Wayne Gretzky in hockey, he transcended from prolific scorer to Stanley Cup Champion in 1984 and his legend was born. Others are defined by extended periods of greatness yet we struggle to find that moment in their career when they took that indisputable step forward.

As he waited to step into the batter’s box before the start of game four of the 2000 World Series against the New York Mets, Derek Jeter’s excellence was already established. By the time he finished his storied career, his iconic plays had been given monikers that all baseball fans knew – “The Flip”, “Mr. November”, “The Dive”, and so on. Like music fans remembering their favorite songs by the titles, Derek’s “Greatest Hits” all had names of their own.

His retirement after the 2014 season started the clock to the inevitable first ballot Hall of Fame induction in 2019. The only question is whether he’ll be voted in unanimously or not (no-one has yet achieved that in baseball).

As he readied himself, his stance, his bat, and his eyes on the pitcher that night no-one had a clue that his indelible mark on MLB’s storied history was about to be stamped on us with surgical precision.

With what was about to transpire over the next 372 days through three epic and game-determining plays, Derek Jeter would go from being an excellent shortstop on the winning-yet-again New York Yankees to a legendary shortstop on yet another dynasty in this amazing franchise’s history.

Why? Let’s explore it some more.

 

Game 4: 2000 World Series

The Yankees were clinging to a two games to one lead over the Mets as game four started at Shea Stadium in the 2000 World Series. The Mets held serve in game three to close the 2-0 gap to within one game of a tied series. Their late rally in game two put a scare in the Yankees – all three games were close. Would the pesky younger NY baseball siblings tie the series and make it that much more pressure-packed?

The Yankees had already won consecutive World Series titles and they were on the verge of winning the third. This game was a pivotal point for them to achieve that goal.

It happens rarely. No one ever expects it. When it happens, since it’s such a rare event, it’s always very emotional and powerful. To do it in the key game in the World Series against your crosstown rival, that’s taking it to an entirely different level.

Derek Jeter hit the very first pitch from Bobby Jones in game four of the 2000 World Series for a home run. Of course, the score was now 1-0 Yankees.

Yankees fans erupted with joy and you could feel the collective sense of Mets fans all being punched in the stomach with that hit. In one play, he turned the game and series into a Yankees 4-1 dominant performance to win their 3rd in a row and 4th in 5 years. Epic in any stretch of baseball that does not already include other Yankees’ dynasties.

 

“The Flip”

The 2001 MLB post-season was played under a dark cloud. Delayed by the terrible events of 9/11, baseball was hoping to generate excitement to help bring the country back together. The Yankees were again pursuing a championship. If successful, this would make 4 in a row.

The Yankees found themselves on the verge of defeat after losing two games at home against the Oakland Athletics. The A’s won two games against formidable Yankees pitching – Roger Clemens and Andy Pettitte were beat in close games. Losing two games at home and heading to the West Coast is not the script that manager Joe Torre or the team wanted.

Game 4 was another close won. Scoreless through four innings, Jorge Posada hit a home run in the top of the 5th to give the Yankees a 1-0 lead. The score remained 1-0 by the time the A’s got up in the bottom of the 7th.

Oakland was threatening the 1-0 ballgame with Mike Mussina pitching a gem. With a runner on first base, Oakland’s Terrence Long hit a ball into the right-field corner with two outs. With Jeremy Giambi rumbling around the bases towards home, the ball thrown by right-fielder Shane Spencer sailed over the heads of two cut-off men … heading towards nowhere land and a potential game-tying run.

Out of nowhere, Derek Jeter appears at a spot on the field near home plate that is nowhere near routine for a shortstop to be at that moment. Albeit, he was! He made an all-time back-handed flip to Jorge Posada to get Giambi out to end the inning and the threat. The Yankees held on to win 1-0 and eventually win the series. Disaster averted.

Jeter’s play not only saved the game, it was an instant classic for ESPN and others to play over and over again that night and to this day. It became known forever as “The Flip.”

Two down, one to go.

 

Mr. November

With the Yankees about to pursue their fifth World Series championship in six years and four in a row in 2001, the story had transformed from one about an all-time Major League Baseball team to a family rivalry.

The only other teams to ever have had this type of streak were the earlier historic versions of the New York Yankees. This group was attempting to stamp a dynasty rating on themselves that only their older siblings could rival. Yankees dynasties of the late 1930’s and early 1950’s had won four and five consecutive World Series, respectively. The team that had won four in the past five years had a chance to elevate themselves into the “greatest ever” debates.

Jeter was in the middle of it all and was poised to put his own mark on his role in this stretch of Yankees dominance as Mantle, DiMaggio, Gehrig and Ruth had before him. He had already proven himself with four rings, four All Star games, the never-equaled, same-season, All Star Game and World Series MVP awards, and played a leading role each season while hitting .331 over the 4-year stretch that ended in 2001.

3000 hits was years away. He had not yet emerged from “The Dive” with his face bloody. They were both years away at this moment in Derek’s career.

Then, with the unfamiliar position of being behind in the series and barely pulling out the prior win to take the series to 1-2 upon them, Jeter once again is there on center stage.

Joe Buck announced to the television audience what was shown on the big scoreboard – we were now officially playing on November 1. Everyone knew this was unchartered baseball territory.

Who made the moment his and only in the way a player could? Derek Jeter hits the home run that was heard around the world. The first home run ever hit in November in MLB’s history. It was the culmination of the lows and highs of what NYC and the USA had just gone through. Derek resurrected New York City’s spirit out of the horrible feeling that took down The Towers. And the Yankees were tied two games each with the Diamondbacks. Once again, Derek was at center-stage and delivered.

While that series ended with the Yankees losing, Derek’s legend was secure.

 

Cooperstown Bound

First, it was the lead-off home run against the Mets in game four of the 2000 World Series, then, it was “The Flip” in Oakland in the divisional series to save the Yankees from losing the series and then, finally, the walk off home run on November 1, 2001 against the Diamondbacks in game four at Yankee Stadium.

These three plays over the course of 372 days cemented the legend of Derek Jeter.

It was that night, that point in time on November 1, 2001 that one now realized Derek Jeter not only is but has also been an elite, legendary player who has been coming up with epic plays when it was critical for the Yankees his entire career. It’s at this instant, the culmination of 372 days and three larger-than-life moments in Derek’s history as the Yankees shortstop, that Derek Jeter became a baseball legend.

History tells us that Derek continued his greatness for thirteen more seasons – taking the Yankees to two more World Series, winning the final one in 2009. In 2011, Derek put gold plating on his already cemented legend with a home run for his 3000th hit (and went 5-5 that day, knocking in the winning run, too). On his last game ever in Yankee Stadium, he hit the game-winning, walk off hit to put that final exclamation point on his resume.

He finished his career with 3,465 hits – the most ever by a shortstop or by a NY Yankee – and number six all-time. His five World Series rings are second only to Phil Rizzuto, another NY Yankee, for shortstops. Of course, Derek’s #2 was retired by the Yankees.

 

Michael Massetti is a life-long NY Yankees fan and a lover of baseball. In his professional time, he is an Executive Partner with Gartner who really does enjoy being a supply chain professional! Seriously. All opinions are my own.

Procurement Integrity Breach – A Sure-fire Way to Get Fired

The following story is true; no names or companies will be mentioned.

“Hello, Rebecca. Great to hear from you this morning. What can I do for you today?” I said to my direct report on my cell phone.

“We have a situation that needs your attention.” Her voice foretold that this was one to pay extra attention to.

“What’s up?”

“I just got a call from corporate security. They are investigating three people in our company, two in our organization, for fraud and embezzlement of a supplier.” I was really sitting up tall now and turned away from the computer completely with a pen and piece of paper. “Please, go on.”

The details were still a bit sketchy but pointed to a serious breach of our business conduct guidelines. Security needed our support to do the full investigation. It was a no-brainer and we both agreed to proceed at full speed. I called my boss to provide what we knew and that I’d keep him aware.

The day had taken a turn for the worse. I was shaken by the reality that our people, our trusted procurement professionals, were being implicated for fraudulent behavior towards our suppliers. Is there anything worse than cheating your suppliers as a procurement professional?

 

The Most Fundamental Attribute of Procurement – Honesty & Integrity

The supplier-procurement relationship is the cornerstone of the engagement between two companies doing commerce with one another. A formal supplier relationship management process is the tool for managing collaborative relationships with suppliers to achieve the required business objectives and overall supply chain strategy. The most fundamental attribute of this relationship is a foundation of honesty and integrity between the two parties.

Suppliers engage with procurement in negotiations continually, sometimes formally during periodic pricing reviews, during requests for quotes, when issues arise that need to be addressed, and more. Both parties are always pushing for the best position they can achieve. To make this work, both sides must have the baseline assumption that each are being open and honest with one another.

Without honesty and integrity between the two organizations, the relationship will never achieve what it is capable of for both sides.

 

Reality Check – The Breakdown 

The story began to unfold. It was a lot worse than we imagined.

At the time, we were introducing new products on a regular basis. Several of the commodity categories were relatively new and suppliers were vying for key positions in our approved supplier list. The procurement team had the challenge of keeping supply available at the right price, quantity, quality, and performance in a highly competitive and dynamic period. Additionally, they had to continue looking forward for the next-best products. This meant a close relationship with engineering to evaluate and qualify the products and suppliers.

This is where it got out of hand.

The three people representing our company were working with one supplier that was very close to getting onto our approved list. If the supplier succeeded, their revenue might be a couple of million dollars per year and an opportunity to grow further with us.

The supplier was very hungry for our business. The procurement and engineering teams knew this. Somewhere along the line it broke down and segued to an unacceptable point – fraudulent behavior and attempting to embezzle the supplier. They crossed a line that sealed their fate with our company and broke every code of business ethics in the industry.

The three forced the supplier to hold “business meetings” at seedy establishments, take them out to extravagant and expensive dinners, and requested money / stock grants to elevate the supplier’s position on the qualification list if they played along. It went way too far and, thankfully, the supplier called our ethics hotline.

 

Conclusion

As the investigation proceeded, the choice was very clear. Rebecca and I stayed in close touch throughout. My boss told me he’d support our decision once we made it. It did not take us long at all once the final report came out. We decided that the perpetrators would be fired immediately. As it turned out, one of the procurement professionals had recently left, so the other two people were released.

It was our only choice. We knew that and it was quite an easy decision to make.

We knew that the credibility of our organization and the company would be irreparably harmed if we chose any other course of action.

What would happen if the word got out to other suppliers? How fast would the relationships we had worked so hard to develop with our supply base disintegrate? How much would our access to new technology be disrupted? The implications of any other choice were too great.

It was the the most difficult situation I’ve experienced with a supplier. It was also a decision that still resonates to this day.

 

Ethical Procurement Links

Please read the Institute of Supply Management’s Ethics and Business Conduct or Chartered Institute of Procurement & Supply’s and National Institute of Governmental Purchasing’s Ethical Procurement code.

 

What are your thoughts about this subject? Have you ever experienced this blatant of a situation in a supplier-procurement engagement?

 

ciao…mam

Michael Massetti is an Executive Partner with Gartner who really does enjoy being a supply chain professional! Seriously. All opinions are my own.

 

Other articles by Michael

6 Essential Attributes of Strategic Supplier Partnerships

Though the phrase partnership is often used, what really constitutes a strategic supplier partnership?

In a previous article about supplier management, I suggested that the more a supplier tells you that they are strategic, the less they really are. Strategic is a term that is often overused. Whether the phrase refers to sourcing, procurement, relationships, or other matters, its use is prevalent.

The notion of partnerships is equally ubiquitous and similarly both mis- and over-used. This article will identify a taxonomy for a strategic partnership between two parties.

What are the essential attributes of a true partnership between a supplier and their customer/partner? Let’s start with a simple framework for the stratification of a supply base and then explore the attributes of the partnership segment.

Based on my earlier post about supplier relationship management, I introduced a three-tiered model for segmenting and managing suppliers.

  1. Strategic Partner – strategic, long-term relationship
  2. Preferred Supplier – operational, on-going relationship
  3. Approved Supplier (aka, Vendor) – tactical, transactional relationship

Vendor is the most commonly used term to define the entire spectrum of suppliers. A vendor is the most tactical of suppliers. They supply goods and/or services that are readily available, are commodities, and price rules.

A preferred supplier has a longer-term, more intimate relationship with the customer. This category of supplier earns the right to sell through a disciplined evaluation and selection process (RFP or RFQ). The relationship between the preferred supplier and customer is deeper than that of the vendor level. Supplier performance measurements are tracked and are the cornerstone of the longer term relationship.

The strategic partner is the most far-reaching relationship of all three levels. Of course, not all strategic suppliers become partners. The strategic partner occupies the elite position at the top of the supply base hierarchy. Partnerships develop over time with conscientious effort on both sides of the relationship. There must be a multi-faceted commitment between the companies to establish the requisite foundation for the relationship to be mutually productive and valuable. Strategic partners may be the fewest in number but they are the most critical to the success of the buying organization. Ideally, both parties have this perspective.

The baseline metrics for performance of a partner are the same operational parameters used for other suppliers. The partnership relationship compels the need for additional attributes to be evaluated between the two companies, including the relationship itself. This enhanced scope is crucial because both companies have significant financial and strategic business ties. This commands a more holistic set of criteria to assess the total partnership.

 

Defining a Strategic Partnership

Let’s introduce the following traits to categorize the multiple facets of a strategic partnership: vision, strategy, investment, planning and management systems, communications, risk, and reward. This forms the expanded domain for developing and maintaining a strong and viable partnership. In fact, each facet must also be “shared” between the parties to truly reflect the nature of this more intimate relationship.

Let’s look at each component in more detail.

 

Shared Vision & Strategy

The most fundamental aspect of a relationship between two companies is the vision both have for their businesses. These visions of what it takes to be successful in their respective markets must align or overlap to ensure that the partnership can develop and remain strong. The relationship must embrace the strategic plans of each entity or it will suffer under the stress of everyday business.

One example is in the world of out-sourced software development. For a relationship between two partners to be viable and value-generating, there must be a clear understanding about intellectual property ownership, market exclusivity, and more. If the partner who performs the work on behalf of the customer attempts to parlay the work they are paid to do into their own market entry, it would undermine the relationship completely. The shared vision and strategy in this example is one where access to valuable intellectual skills is required by one party to be successful and offered by another. From the other vantage point, skills to complement the core investment by the buyer are essential for market success.

Shared Investment

There is money to be spent to bring new products or capabilities to market. Success will be contingent upon appropriate resource allocation and investment by all involved. This does not mean that the investment amounts are necessarily equal. The financial value received by both companies in this engagement may not be equal either. Regardless, it does require both parties to support the vision, strategy, and plans with the appropriate level of investment in human and financial resources and the commitment to stay the course.

Shared Planning & Management Systems

With both companies approaching their joint activities with alignment at the vision and strategy level, the detailed plans must also be congruent. Plans establish the resources involved, the milestones for the key activities, and responsibilities of both parties. Planning has to be mutual and both parties need to be actively involved and vested with the entire plan. Falling short here will set up misaligned expectations and when issues do surface, the ability to easily resolve them suffers. Regular business reviews are an integral part of a management system. Build them into the relationship plan to ensure alignment at all levels of the business.

Shared Communications

Since a partnership sits atop the supplier hierarchy, a high degree of collaboration is required for the supplier and customer to be successful. This implies a structured and managed approach to communications and engagement across all dimensions of the relationship. Communications will span the management hierarchy and the functional disciplines of both parties. Open, transparent, and strong cross-functional engagement between the partners is as important as the contractual and formal aspects of long-term performance and value contribution. If communications channels are not open and bi-directional, long-term success will be compromised.

Shared Risk

All business ventures have elements of risk. When two companies come together to do business, they are both taking on new and shared risks. Some of these are unique to their business or market and some are shared by the fact that they are collaborating to be successful. It is critical that both parties acknowledge these risks and be transparent with one another. An open, honest engagement will provide the clarity both parties need to deal with risks when they occur without jeopardizing the partnership.

Shared Reward.

Winners beget winners. At the end of the day, success in the marketplace needs to be shared all along the value chain. Supply chains with close, vested, and mutually-beneficial relationships at the highest levels of the supplier hierarchy will succeed the most. Successful partnerships will generate more mutual value than lesser relationships. When set up properly, there is reduced chance of arguing over who got what or not later on. Market share growth, access to technology, improved profits, and other measures are examples of what each party may accrue.

 

The strategic partnership is the pinnacle of supplier relationships and takes a more holistic management approach to be successful. When making decisions about very strategic engagements, consider each of the above elements to ensure that the partner selection is well-founded.

 

Michael Massetti is an Executive Partner with Gartner who really does enjoy being a supply chain professional! Seriously. All opinions are my own.

6 Bold and Creative Techniques for Supply Chains to Weather a Stormy Market

What would you have done with your supply chain in 2007 if you knew what was about to transpire in 2008/9?

The Institute of Supply Management (ISM) data shows that the US manufacturing index has been below the break-even level for three consecutive months after thirty nine months of growth. Will the trend continue? If so, how long and will it get worse? Is the slowdown in China going to have a significant impact on the rest of the world? It remains to be seen.

It’s déjà vu all over again and perhaps the third time since the turn of the century for the global economy to tread water and decline. How are companies dealing with this? The least mature organizations will wait and just react – it will be ugly. Leaders have begun to orchestrate their entire value chain and make changes now that will provide buffer during the downs and catapult them out when growth resumes. Existing Gartner clients can read: Gartner’s Demand-driven Value Network Maturity Model.

What role should the Chief Supply Chain Officer (CSCO) or head of supply chain undertake to stay ahead of the storm?

 

IBM

The Great Depression of the 1930s presented an “unprecedented economic challenge, and Thomas Watson, Chairman of IBM, met the challenge head on, continuing to invest in people, manufacturing, and technological innovation despite the difficult economic times. Rather than reduce staff, he hired additional employees … – not just salesmen … but engineers too.” (Wikipedia)

The trajectory that IBM had after World War II catapulted them ahead of the rest of the industry. It took many technology disruptions, including one that IBM created themselves, and nearly 50 years for IBM to relinquish its position as the world’s most dominant technology company.

What lesson does this provide for supply chain organizations today? Does the IBM approach to difficult economic times suggest an alternative universe of solutions? Was Thomas Watson the first Mode 2 Jedi?

At Gartner, we use the concept of a bimodal supply chain to distinguish between the daily operations of a business from the more strategic view of the future. “Mode 1” is defined as traditional state of supply chain and the everyday drill of cost reductions, delivery performance improvements, and the usual culprits of operational performance. “Mode 2” is an exploratory state, driven by innovative approaches, changes in the market, growth opportunities, and new models of business that impact supply chains. Watson was clearly in a Mode 2 conviction after the stock market crash. “Damn the torpedoes, full speed ahead!” (Admiral David Farragut). Existing Gartner clients can read: Gartner’s Disrupt or Be Disrupted – Defining the Bimodal Supply Chain.

 

Risk / Reward

Too often we’ve seen dramatically poor forecasts. While forecast accuracy is an interesting concept, when it comes to market dynamics, we have to consider whether we are inclined to bias ourselves more towards the positive and hit the gas pedal when it appears as the sky is the limit. And, do we tend to shrug off downward projections without understanding the real implications of such a laissez-faire attitude? In either case, betting wrong has impacts.

Usually, if we do not appropriately anticipate and prepare for a downward trend, the typical after-the-fact response is the venerable Mode 1 stereotype: cut people, stop all discretionary spending, and slam on the brakes. It’s a no holds-barred knee-jerk response. Who has not been there before?

How would we have dealt with the most recent market collapse in 2008-2009 if we knew in 2007 that it was coming? We only get one attempt at each challenge, what can we learn about the past that can be applied going forward?

 

Think Advanced Maturity and Mode 2! 6 Steps to Success

The typical supply chain response to a downturn is to shut down factories, layoff production workers, cut orders on all suppliers, shut down future-focused improvement activities, etc. This approach impacts the ability to grow in the future.

What if we approached this differently? Does the lesson of IBM in the 1930s offer us a window to view an alternative scheme? Proactive strategies fall into the realm of “an ounce of prevention is worth a pound of cure.”

  1. Let’s start with talent. Watson hired well ahead of the curve in the 1930s. While admirable in the 20-20 hindsight view it is not always possible. CSCO’s should approach a potential downturn as an opportunity to retool the organization and to acquire skills that the supply chain knows it will need in the future. Instead of purely reacting to the “cut 10% of the HC” directive from the CFO, have a plan in place to retool the organization.

Downturns usually unleash a wave of excellent talent available to the market. Be prepared to reduce your team by more than the 10% target and then begin the acquisition plan once the dust has settled. The CEO and CFO will applaud the forward-thinking. In their eyes, you will still achieve the cost reduction targets but be in a much better position to accelerate when the upward trajectory resumes.

  1. Do you know where your supply and demand is? If you are a mature organization with strong supply chain analytics capability, you clearly do. If not, you are driving somewhat blind, looking back at what has been accomplished but with no sense of what is coming. Don’t wait to start because it will be too late.

Why not partner up with the IT team immediately and seek out some critical target areas for better information and analytics to support your supply decisions. Regardless of your areas of strength or weakness, diving in now before you are asked to change will put the CSCO in the driver’s seat in advance of any challenges for the typical Mode 1 “cut headcount, shut down factories, etc.” request later on.

  1. Don’t wait until there is no choice and be forced to shut down factories and lay off employees. With a strong S&OP process in hand, CSCO’s can begin to evaluate how to reset manufacturing earlier as signals begin to drop. Instead of all-in reductions in work force after the fact, production shifts can be slowly reduced ahead of time without impacting key performance metrics, especially customer service and cost – as they lead to major exposures in revenue and margin. Existing Gartner clients can read: Gartner’s Hierarchy of Supply Chain Metrics.
  2. What downturn has not been met without asking your supply base to do something? The usual suspects come to mind: take back inventory, delay and cancel purchase orders, extend payment terms, cut prices, and compromise well-nurtured supplier relationships. These are all so typical in their Mode 1 demeanor. We can be much better than that. Key suppliers should be viewed as partners – this changes the entire dynamic when challenges arise.

The CSCO or CPO knows that the suppliers see the same avalanche coming their way. There is no better time to dust off the supplier relationship program and evaluate the entire supply base than beforehand. Who is performing very well (cost, quality, delivery, innovation)? Is it possible to shift more supply to these top-performers, especially in multi-sourced categories now? Have we lived with 3 or more suppliers in certain categories when, in reality, 2 is sufficient? It is very important to consider the myriad options ahead of time than to be stuck with a limited, mode 1 playbook later on.

  1. Risky Business! Yes, there is always the issue of risk with a more consolidated supply base, but what is more important now – cost optimization or overall risk? When we talk about risk-making and decisions, the CSCO must know what she is getting into. By understanding what data and intelligence exist about past downturns, the CSCO and CPO can make informed, low-risk decisions today instead executing a reactive response tomorrow.

Engaging top suppliers early demonstrates the trust and confidence the supply team has and creates enduring goodwill. Mutually advantageous strategies can be developed and called into action at the right time. We may be wrong about the projected situation but one might argue you’ll be better off by taking a Mode 2 approach. It’s only bad risk when you have no data or experience to judge with.

  1. You’re not alone in this – what opportunities are lurking? Take advantage of this and realize there are a number of ways for you to do so. First, you have colleagues in the same impending mess as you. Sharing experience and issues allows you to test ideas and find out from others what is or isn’t working for them. Gartner’s exclusive network of diverse and experienced supply chain executives provides an excellent opportunity to talk to someone who understands. Peer networking continues to be the most sought-after element of a CSCO’s repertoire with Gartner.

Next, look ahead of you in your value chain – you will see are customers in the same predicament. A truly orchestrated supply and value chain means that these upstream conversations already occur naturally and are an important facet of everyday supply chain engagement. Ask them about what they see, what they are considering and, you’ll find ideas to help key parts of your supply chain be ready in a holistic manner.

 

Check your mode, now.

Are you thinking ahead and considering innovative and unique ways to persevere through difficult times working out scenarios of what might be? How will you be prepared to respond? Will you wait before you plan on a response tactic? Or, will you lead the charge and start now – ready to pounce on the opportunities that will present themselves while the rest of the pack gets washed ashore? What knowledge assets do you have at your disposal to test ideas against?

 If you are interested in learning more, please go to Gartner’s Supply Chain page or contact me via LinkedIn.

 

If we don’t learn from our past, we are bound to repeat the same mistakes over again.

Michael Massetti is an Executive Partner with Gartner who really does enjoy being a supply chain professional! Seriously. All opinions are my own.

The Snowy Big Data Supply Chain Event of January 2016

Prolog:

Did you see it coming? Sometime during the droning sound of The Weather Channel announcers describing Winter Storm Jonas I realized, “Holy cow! There is a gigantic big data event going on.” Not just gigantically big, but galaxy-like big.

How much snow was going to fall? What will the distribution of snow depth be? What is our projected absolute error range? How many plows do we need? Where? What is their capacity? Do we have enough fuel in all of the stations in the target range? Where will the snow all go? Can we calculate which roadways should be cleared first in the city so that assets can be deployed early and be ready (the grid of Manhattan has to be very easy to optimize)? And so on. We just need all of the data.

While the people in the target story zone were fretting over bread and milk, the folks in Buffalo, Syracuse, and Rochester were saying “Let’s get some brie, baguettes, smoked meat, and winter lager and watch those folks out East deal with this event!” While many of us remain skeptical about weather forecasts, communities, cities, and governments cannot afford to under-estimate the potential impact. Readiness is paramount.

The amount of “things” required to prepare for and respond to storms or major events is enormous. Some of the things already are part of the data network needed to manage the response. Many elements are not in place yet (for example, distributed sensors informing the agencies about the current state) and should be part of future planning. The more “things” that can provide data, the better agility we’ll have. We all know, the Internet of Things (Iot) is the next Big Thing! Some say it’s bigger than any other next biggest thing. Ever.

Well, we have our history about weather. We have great models that modern-day media love to show off – despite historical accuracy issues (I wish I got paid to be wrong!). We have supply and capacity in place – but how much can we handle?

 

Winter Storm Jonas

The storm that is now in the record books provided a tremendous vehicle to assess the full breadth and depth of what’s capable for IoT experiences that can generate unprecedented volumes of real-time data that are rich with the informational nutrients of how to prepare and respond that are truly transformational to society.

This information is essential to the supply chain part of the discussion. Supply chains thrive on timely, accurate data and information to remain both agile and focused. The supply chain elements are the “things” in the Internet of Things aspect of this big data opportunity.

There are big data lakes everywhere along the infrastructure waiting for deeper analysis: transportation, food & beverage, energy distribution, emergency services, consumption trends, and more. These all need to be mined for the requisite information to determine readiness (historical analysis vs. current capacity) and deploy the assets (snow trucks, salt, sand, water, emergency services) when needed – even days ahead! Supply planning starts with historical data about consumption rates and performance and the impending storm event.

“Data is the new science. Big Data holds the answers. Are you asking the right questions?” Patrick P. Gelsinger, Senior High Technology Executive

At one point on TV, one official said “We cannot handle snow above 3 inches per hour!” That’s the capacity of the current system. Is there additional flexible capacity nearby that could have been deployed much earlier? How much more is actually needed? If we moved all of the cars out of the roadways earlier, would our plowing efficiency go up and increase effective capacity? If public officials were given the tools to ensure well-ahead of time that the sufficient supply and capacity was available, the impact of the storms could be measurably less.

If you look at the map above, one can see that areas of the region usually well-prepared and equipped for large snowfalls went un-touched (Great Lakes snow belt, northern New England). Was a formal assessment done to determine if those assets (plows, snow, and emergency crews) were available and mobile enough to help out the storm area? If not, this is an opportunity that the right analytics tools can determine.

Snow in Minnesota

With the right system in place to model and determine what is required, the new demand (projected storm size) is loaded into the supply network and artificial intelligence (AI) tools manipulate the data to suggest likely outcomes. The AI engine(s) recommends a full deployment map of all essential infrastructure (capacity) and consumable assets (supply) based on confidence models from the weather predictions. If there are gaps, the model can reach out to other assets close to the region at risk. Ready. Set. Go!

The models that do the weather predicting (demand generation) will eventually feed the emergency system directly and scenarios played out will look at redistribution of supply (assets) within range (cycle time) in advance of the storm. Back to the things part of this, adaptive sensors throughout the affected area will keep pace with storm accumulation and clearance rates to adjust both capacity and supply – an agile supply chain with real-time data. True, there might be occasional errors of over-commission that leaves assets under-utilized, but we know this is a less risky and costly situation than not having assets in place due to under-forecasting.

With the correct supply, projected demand, and historical consumption data available from the aforementioned things, cities will also be able to know in advance where all transportation assets (planes, trains, and automobiles) are sitting and which ones need to go get out of Dodge; which ones to stop from coming in; which ones to store; and which ones are needed. Traffic flows can be adjusted to streamline exit paths and security assets (police and/or National Guard) can be sent out to monitor and guide. They will be redeployed later in the day as the snow begins to accumulate and eventually fades into the sunset. Once it is all said and done, everybody goes home, safe and sound.

Why should anyone ever be stranded on a highway again? The entire system in the affected area can be prepared for the event and take preventive action much earlier. While the chances exist that we over-forecast, the alternative is much worse – which we’ve seen many times in the past.

“Get the milk! Get the bread! Get the toilet paper! It’s gonna snow a ton!”

Once the storm and clean-up are over, there will be a brand new set of data available about the entire event, from the original warning to the last bit of snow moved. These data go into the existing pools of data and help set up the supply/capacity response for the next storm. Of course, record storms reset all of the averages and distribution of potential impacts – future events will benefit from the learning achieved. Simulation models will have new parameters to use during the next event’s planning.

Our ability to respond to widespread severe weather events must be proportional to the degree of recovery needed. This may mean that readiness spreads out geographically. With some capabilities (electricity, for example) the risk is higher that a storm can affect millions of people. Do we have the data and information necessary to help assess and plan for the impact of outages? With information such as this, government and private services can be deployed at the right levels and at the right cost.

Until the next biggest weather-driven supply chain event!

The discussion can really go on longer.

What do you think about this?

Well, time to check out The Weather Channel once more before going down for a long winter’s nap. I’m rooting for NYC to beat its all-time record and watch people stranded helplessly on TV. That’s winning, right?

“Let it snow, let it snow, let it snow!” Sammy Cahn (writer)

 

Epilog

After flying successfully from Seattle to New York City’s LaGuardia Airport, the reality of the problem became very evident. Hundreds of people were landing in the NYC airports once the flights were released. Unfortunately, the roads were not quite as ready. Accidents, slow moving traffic, and atypical congestion clogged up the LaGuardia airport late Monday afternoon through the night. Clearly, the incoming traffic exceeded a reasonable level given the overall situation. Busses, shuttles, limos, and taxis could not get through. Rental cars were quite depleted and emergency crews were dealing with the mess. 1 hour and a few dollars later, the driver from Avis accepted my “offer he couldn’t refuse” and took us to the Hertz terminal. Clearly, this is yet another opportunity for minimizing the disruption in this type of event with better data, information, analysis, and integration with the services in the region.

 

Michael Massetti is an Executive Partner with Gartner who really does enjoy being a supply chain professional! Seriously. All opinions are my own.