ProcureCon Change Management
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Everyone has a preferred leadership style. As a procurement executive, you find yourself communicating with your team and fellow business leader in many capacities throughout the day. You and your team represent what procurement stands for within your organization and it matters how you are perceived by others. So, how can you lead and influence change in a more effective way? Enjoy a number of ‘war stories’ and practical ‘how to’ advice from both expert negotiator Mike Inman (procurement leader at MGM Resorts, IAC/InterActiveCorp, US Airways, General Motors and Raytheon) and SunTrust & ACS procurement veteran Ian O’Brien. In an interactive setting, gain the information, confidence and tools to lead in- and outside the supply chain: The 3 things your boss wants you to demonstrate as an active leader Leading in- and outside the supply chain; taking the right approach to each Developing stories about wins and losses Salesmanship in procurement The power of ‘I’m Sorry’
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ProcureCon Change Management
- 1. Change Management: Leading Inside and Outside the Supply Chain By: Ian O’Brien & Mike Inman • The 3 things your boss wants you to demonstrate as an acBve leader • Leading in-‐ and outside the supply chain; taking the right approach to each • Developing stories about wins and losses • Sales-‐person-‐ship in procurement • The power of “I’m sorry”
- 2. Together with our millions of supporters, the American Cancer Society saves lives and creates more birthdays by helping you stay well, helping you get well, by finding cures, and by figh=ng back. • We help you take steps to prevent cancer or detect it. • We guide you through every step of your cancer experience. – Phone lines (1MM/year); Cancer.org (25MM/year); Moral support (groups and 1-‐on-‐1) • Offer prac=cal solu=ons to daily challenges: transporta=on; a free place to stay when care is far away from home, and pa=ent naviga=on services. • We fund groundbreaking research that helps us understand cancer’s causes and cures. – Largest private funder of cancer research -‐ ~ $130 million per year ($3.5 billion + since 1946) – Played a role in nearly every major cancer breakthrough last century: • CigareIe smoking , obesity, drugs for treatment • We help pass laws to defeat cancer and rally communi=es worldwide to join the fight. – 79% of the US populaBon is now covered by smoke-‐free laws – State laws ensuring that people have access to and coverage for treatment – Rallying communi=es through community events like the American Cancer Society Relay For Life® and Making Strides Against Breast Cancer ® • Results — 15% decrease in the overall cancer death rate between the early 1990s and 2006. — 350 more people each day who are celebraBng birthdays. • Our vision is 1,000 people a day in the US and 10,000 worldwide celebraBng birthdays who would have otherwise been lost to cancer
- 3. Addi=onal ACS Facts • 99 years old • 50 states, 900+ locaBons • Decentralized • Indirect spend: $500MM • Sourcing organizaBon is ~ 2 years old • All spend is in Sourcing’s scope • Small porBon fully sourced and managed so far • % hands-‐free transacBons • ImplemenBng Source to Pay soluBon • OrganizaBonal Design: Center led (previously extremely decentralized) • Direct reports: sourcing, supplier management, inventory management, supply chain analysts • Indirect reports: divisional procurement leads • Annual savings: 23% contracted savings on sourced categories • Procurement environment: Non-‐Mandated
- 4. Mike Inman ü 15 years in supply chain • Gaming/hospitality, publishing, internet, airlines, defense, manufacturing • Global & domesBc, direct & indirect • Buyer to head of organizaBons • $1+B in spend responsibility ü Now teaching b2b global negoBaBons with TableForce and advising on supply chain iniBaBves through C3
- 5. 3 Things Your Boss Wants 1. The job gets done! OperaBonal and financial improvements delivered 2. Healthy supply chain pracBces a. Right supplier mix to balance management effort, new ideas, and compeBBon b. Improved quality / lead Bme c. Reduced total cost of ownership d. Risk reducBon e. Revenue enhancement f. Efficiency gains 3. Internal Clients, peers, sr. execs think and say good things and ask for more!
- 6. Tradi=onal Change Management The “what” John Koqer – HBS 1. Increase urgency 2. Build the guiding team 3. Get the vision right Cliffs Notes… 4. Communicate for buy-‐in 5. Empower acBon 6. Create short-‐term wins 7. Don't let up 8. Make change sBck
- 7. The Right Approach The “how” Driver All “passengers” – Who’s driving! Backseat driver… Consigliere – trusted advisor
- 8. Stories: Wins & Losses “War stories”
- 9. Excerpt from my job interview… Me: What category is going to be surprisingly difficult at ACS? Boss: T-‐shirts Me: (??????) Me: (Aver 2 years) I get it.
- 10. Relay For Life Global phenomenon that raise much-‐needed funds and awareness to save lives from cancer: • Annually: 3.5 million people in 5,000 communiBes in the United States • 20 countries Survivors celebraBng life
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- 12. Though front is consistent (primary brand), many divisions have developed their own supply base and varia=ons on t-‐shirts colors, styles, etc. Division 1 (Illustra)ve) Collegiate Shirts Community Shirts Par=cipant Shirts Par=cipant Shirts White, Custom Back White, Custom Back White, No Back White, No Back CommiIee Shirt CommiIee Shirts Sky Blue Stock Blue Sky, Stock Back Survivor Shirt Survivor Shirts Purple stock back Purple Stock Back
- 13. Division 2 (Illustra)ve) Par=cipant Shirts Survivor Shirts Collegiate Shirts White Lavender Custom Custom Lavender Stock Caregiver Shirts CommiIee Shirts Purple Custom Lavender Custom Frost Blue Custom Purple Lavender Stock Frost Blue Stock Stock Purple Custom Grass Green Custom Team Captain Shirts Purple Stock Grass Green Frost Blue Custom CommiIee Shirts Stock Frost Blue Stock Frost Blue Custom Caregiver Shirts Grass Green Custom Frost Blue Stock Lavender Custom Grass Green Stock Grass Green Custom Lavender Stock No back Shirts Grass Green Purple Custom Frost Blue Stock Purple Stock Scarlet White Custom Back Grand Club Shirts Grass Green White Custom Scarlet-‐ Customer Lavender Grand Club Shirts Scarlet Stock Purple Red-‐ Custom White Red Stock Team Captain Shirts Frost Blue Custom Frost Blue Stock Grass Green Custom Grass Green Stock Survivor Shirts Lavender Custom Lavender Stock Purple Custom Purple Stock
- 14. Division 3 (Illustra)ve) PURPLE College SURVIVOR White Par=cipant Tee PURPLE SURVIVOR (8 sizes) (10 sizes) (10 sizes) Purple w/ back White Purple w/ back College Par=cipant Tee White Custom Back (8 sizes) White White Custom Back Star Supporter Shirt (6 sizes) LIME TEAM CAPTAIN Maroon with back (8 sizes) LIME College Committee (6 sizes) Lime w/ back Orange College Team Captain (6 sizes) Lime w/ back Orange w/ back ORANGE COMMITTEE (8 sizes) Orange w/ back Royal College Security (4 sizes) Royal w/ back
- 15. 2011 RFL T-‐Shirt Na)onwide Inventory Mix (Illustra)ve) Sizes Shirt Type Color Weights Brand Front Design (12) (15) (17 variaBons) (3) (3) (2) 6.1 Heavier Brand1 Wgt 5.X Mul=ple Brand2 Lighter 5.X Brand3 Mul=ple Lighter Variability has massive effect on SKU combinations
- 16. 2012 RFL T-‐Shirt Na)onwide Inventory Mix (Illustra)ve) Shirt Type Color Weights Brand Sizes Front Design (12) (x variaBons) (x variaBons) (1) (1) (2) 1 weight Brand1 Effect of reduced variability and other process changes: • 90%+ reducBon in combinaBons available • More consistent brand • Redeploy staff to more mission related acBviBes • More consistent quality • Simplified processes (internal and external) • Increased flexibility • Reduced supplier inventory obsolescence and stockouts • Reduced pricing • PotenBal posiBve impact on revenue
- 17. 2012 RFL T-‐Shirt Na)onwide Inventory Mix (Illustra)ve) Shirt Type Color Weights Brand Sizes Front Design (12) (x variaBons) (x variaBons) (1) (1) (2) 1 weight Brand1 Relevant example for en=re organiza=on • Visible category • Easy to understand • High benefits • Concepts apply across many categories – good teaching opportunity
- 18. U=lize trusted advisors Challenge: Sourcing was new in our organizaBon. Our reputaBon had not yet been established. Ques=ons: Who can support our concepts? Whose opinions does the business trust?
- 19. Results • Support from trusted parBes can drive change (Suppliers? Finance? Another business unit?) • These real world stories helped drive real supply chain change: Change Impact • SKU reducBon • Reduced cost • Expanded Bme lines • Increased quality • Improved forecasBng • Reduced risk • Simplified and standardized • Increased revenue processes • Increased efficiencies • Listen to supply base • Increased innovaBon • Increased flexibiliBes • Increased revenue • More producBve suppliers
- 20. Sales-‐person-‐ship CommunicaBon plan – INTERNALLY -‐ StarBng statements to open the door • “Help me to understand what you’re trying to accomplish?” • “What’s your biggest problem?” • “In a perfect world, what would you like?” • THEN TAKE TIME TO REFLECT – SILENCE IS GOLDEN – What are they saying is but HOW they are saying it is key too • Are they “entrepreneurial”…. or lean six-‐sigma operators??? • Are the finance people or funcBonal??? – Mid-‐project • With suppliers – “This is what the team is looking for” – You: “bad cop” if/when necessary – Internal clients: must develop a good relaBonship for the long term • Internally – publish the agenda and updates
- 21. Sales-‐person-‐ship The project close-‐out • Credit – be a giver! • Emphasize benefits beyond cost – proudly and early From: Inman, Mike To: Exec Team Subject: Re: Agency of Record results To respond to your initial request, before looking at the fees (and I assume you’re also looking for the associated reduction) I think we were able to: 1) get a fantastic agency (supported by more objective criteria than just “they’re very creative” – attached is the final evaluation) 2) improve the service offering (adding strategic planning and web) 3) increase the amount of work we expect the agency to perform (both strategic and tactical) 4) reduce the risk contractually (as they are new and hungry, we were able to get very favorable terms to reduce our risk of going with them, something that would have been more difficulty with the incumbent agencies) and lastly, reduce costs... • Ask for feedback – let them feel like they’re a part of YOUR change management process too!
- 22. The power of “I’m sorry” • NOT the same as taking responsibility for others issue… • Builds bridges and deepens relaBonships • Displays true confidence • Solidifies respect and leadership
- 23. Finishing up! • Have a plan – What does your boss want + ??? • Research the what? – Tools in your tool belt • Consider the “how” – EffecBve role – Sales-‐person-‐ship • Follow up breakfast! 8:00 – 9:00 23