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. 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. 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);  (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. 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. 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. 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. 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.  Dont  let  up  8.  Make  change  sBck    
  7. 7. The  Right  Approach   The  “how”  Driver All “passengers” – Who’s driving!Backseat driver… Consigliere – trusted advisor
  8. 8. Stories:  Wins  &  Losses         “War  stories”  
  9. 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. 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  
  11. 11. 11  
  12. 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. 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. 14. Division  3  (Illustra)ve)     PURPLE College SURVIVORWhite  Par=cipant  Tee     PURPLE SURVIVOR (8 sizes)(10  sizes)   (10 sizes) Purple w/ backWhite     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. 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. 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. 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. 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. 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. 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. 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. 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. 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