Category Archives: Growth

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Looking Both Ways

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One of the earliest lessons we learn as we make our way into the world is to “look both ways before we cross the street.” We heard it as children and have said it to our own. From a business perspective,– looking both ways translates more broadly to knowing that before you head out in a new direction, you must pay attention to the world around you.

j0402780[1]Understanding Environment

“Looking both ways” reminds us of the importance of taking a look at our environment. As we prepare to cross our first street, we are leaving the comfort of what we know with a goal of moving to a new location – the other side of the street.

As business people and businesses – to be successful and achieve our goal safely – we need to know:

Where we are…

Where our customers are…

Where our competition is…

Where our competition is going…

Where WE are going…

What resources we need to get there…

&

Where do we get them?

Why say we need to know where we are? It’s obvious, right?

Not always. Often we are so busy trying to achieve the next objective or goal that we forget to step back and assess where we are today. If we do not take the time to really look at where we are today, we may miss those important “little things” that can have a major impact on to where we want to go.

As we look at where we are, there are some important questions to ask. Some are based on what the organization looks like inside while others are external, how others see you. Both are critically important.

So take the time to look both ways, it can make all the difference in your journey.

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker

 

The Difference Between Knowing and Doing

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One of the great secrets to getting better results in your business is the difference between knowing something and doing something.

j0398745[1]Very often when you read a business book, blog or article, you may say to yourself, “I know that already.” And, you probably do.

The question is not if you know it – but rather, are you doing it? Are you using the knowledge?

As we build our strategy for better business results we must USE all we know and apply it to where our business is and where we want to take it to.

Next time you read about a business strategy or process improvement and recognize it as conventional wisdom, take the next step and try to list the ways that you and your company are actually demonstrating it.  You might be surprised what you find.

Ask Yourself…

Are we doing this?

Are we consistent?

How can we do this better?

The key here is the “WE”. Very often we assume that since we know what to do, others in our organization also know – and it is not always true. The key is to share what you know with your team and to act on it – together.

  Thanks for stopping by.  Stay Tuned.

Joan Koerber-Walker

Want more business – Get a Map!

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The Impact of Services Mapping on Employee and Customer Enthusiasm

In today’s challenging business environment, creating and maintaining customer enthusiasm can make the difference between business success and business extinction.

j0402776[1]Customers have more choices than ever before and expect higher and higher service levels relative to

· product and service information 

· choice between service offerings

· tailored or custom services

· quality of delivery

· the quality of the buying experience

Across industries, companies are discovering that of these 5 customer demands, the greatest is that of the buying experience.

While a customer will forgive a service failure that is corrected promptly by a company’s enthusiastic employee ambassador, customers will migrate quickly from companies whose employees feel disenfranchised, even if the service is performed as promised.

But what is an employee ambassador, and where do you find one?

The answer is simple, employee ambassadors are all around you. They are each member of your organization who touches a customer – directly or indirectly. To create enthusiastic employee ambassadors, organizations must provide a support system to foster enthusiasm that includes:

· A consistent culture that reaffirms that each employee is key to the company’s success

· A commitment to process, structure and continuous improvement that allows the employee to make promises to customers and gives the employee faith that their promises will be kept.

As companies aggressively pursue the development and growth of services offerings and services revenue, it has become increasingly important, in fact, imperative for these firms to provide a consistent level of process, support and flexibility to support employees in their quest of keeping promises to customers resulting in the growth of high levels of customer and employee enthusiasm and the resultant customer loyalty and profitability.

All of us want our employees and customers to be enthusiastic about the products and services we provide. Employees can not be enthusiastic if they feel that they can not deliver what is promised, and customers will loose enthusiasm and go elsewhere if promises are not kept. The question is how do we create that enthusiasm and keep it? One tool, created at Arizona State University, is the process of Services Mapping.

Customer Enthusiasm SCC

Cross functional teams across the spectrum of a product or service delivery create a “map” of the product and service delivery systems. The map is broken down into five levels:

Customer View & Evidence:  What does the customer see in the way of marketing materials, articles, and information about the product or service that brings them to your door?

Customer Contact: What does the customer experience when they first make contact with your Organization?

On Stage Employee: What are the tools, attitudes, and systems in place to support a positive employee/customer interaction and the employees confidence in making promises to customers?

Back Stage Employees:  What are the tools, attitudes, and systems in place to support a positive interaction between the front line employee and those they must rely on behind the scenes.

Resources:  What are the physical, financial, and technology resources on stage and back stage employees need to keep promises to each other and ultimately to customers.

The Services Mapping process:

· Provides an Overview so employees know “What to Do” when things go right and when they don’t.

· Identifies weak links in the chain, so promises are kept more often!

· Defines the Lines of Customer Interaction between customers and employees so the employee recognizes where they can have the most impact to the customer experience and the company’s goals.

· Defines Lines of Internal Interaction defined between departments

· Provides a basis for identifying and assessing cost, revenue, and capital invested

· Creates a baseline for use in customer satisfaction and quality improvement efforts

When service delivery processes work, promises are kept, employee enthusiasm increases and it spreads to customers. The result is greater profits as customers stay, and more importantly, through their enthusiasm, bring more customers via the strongest marketing tool in the arsenal, customer referrals!

Thanks for stopping by.  Stay tuned…

Joan Koerber-Walker

Turning Things Around in 2009

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What was your New Year’s resolution?  Mine was to talk to at least two different people every day about what’s happening in our economy and to explore opportunities. 

It had gotten to the point where I was afraid to turn on the radio, TV, or open the paper.  The news was just too depressing.  So I resolved to reach out into my community and observe things first hand.

Since January 1st,  I have met with and spoken to a lot of people in Arizona, across the US, and even abroad.  And what I am hearing is encouraging.  Yes, times are tough, but people are moving forward, innovations are happening, businesses are making changes to speed their recoveries, and investors are looking to invest in solid business plans.  As I meet with friends and business colleagues, they in turn have introduced me to their friends…and I have returned the favor.

Here are just a few of the wonderful things I have uncovered in my search for opportunities…

  • One of my friends was working with a company with a great new product and service concept.  They were getting ready to reach out to investors and showed me their developing plan.  I even got to make some suggestions.  Hopefully, they will help this company raise their next round of funding.  They have a great concept. 
  • I spent time with two executives in Detroit.  One from GM and one from Ford.  Some of the stories they shared were sad, but there were glimmers of hope as they talked about new developments and what those companies were doing to turn things around.
  • A biotech researcher in San Diego was bubbling over with excitement when she shared news about a new development in the lab that could improve an long-standing medical process and ultimately save thousands of lives when it is brought to market.  I told anther friend about it and he introduced me to the person I needed to meet to move the process along.
  • A manufacturer in Arizona has created a new system to help restaurants be more competitive, improve processes, and save energy.  Their business is growing by leaps and bounds.
  • An architectural  glass distributor in Michigan has taken their business global and not only grown substantially but has won high honors and awards along the way.
  • Over the last weeks I have met with people looking to buy businesses and re-capitalize them, not just saving jobs, but with future growth… creating them.  Oh, and they are finding the money for it too!
  • Meetings have brought me in contact with incredibly talented CEO’s and executives who are looking for their next big project.  They were not sitting at home or hitting the links.  They were out there just like me, sharing their expertise, serving on boards of directors, mentoring others, and helping to get things moving forward again.

With all of these encouraging stories bolstering my courage, I was brave enough to open the newspaper again. And what did I find?  Well yes, there was news of layoffs and filings for Chapter 11 BUT there were also NINE full pages dedicated to positive stories just like mine.  Stories of business owners and individuals sharing how they too are staying ahead of the downturn. 

I’ve made it though seven months of keeping my New Year’s resolution.  I think I’ll stick with it.  Wouldn’t you?

Thanks for stopping by.  Stay  Tuned.

Joan Koerber-Walker

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Want to Grow your Small Business? Be Bankable.

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Just as plants need water to grow – growing companies need cash.   Why do you think they call it liquidity.

j0434131[1]So many times small business owners have trouble raising the cash they need to grow – not because it is not available but because they did not follow some basic steps to make their company bankable.

We know that as individuals, we need to develop a credit history, pay our bills on time, and start small with our personal credit and build it up as we go.  Why do we expect our business to be any different.

Here are some tips you might want to consider if you want to improve your bankability:

1.  Your tax advisor may be saving you money on taxes and destroying you future ability to get a loan.  Banks look at historical documents like your P&L, Balance Sheet and TAX RETURNS as part of the data they use to decide if you are credit worthy.  They need to have confidence that you will be able to repay what you borrowed.  Year after year of tax returns showing little to no profits is NOT a way to inspire confidence in your banker.

2. Get a personal business banker.  It’s free!  Of all my professional services providers – accountants, auditors, lawyers, etc.  Only my personal banker spends the time to counsel me without handing me a bill for his services at the end.  Plus – the more they know about my business, the more likely they are to introduce me to other businesses that might help my business grow or go to bat for me when I need it.  When we grow – they grow as more money goes into my accounts and their bank.  Its a win-win situation.

3.  Start small and work your way up.  Open a line of credit for a reasonable amount to begin.  Use it – pay it off.  Use it – Pay it off.  Show the bank that you know who to manage your credit relationship wisely and they will often reward you with higher lines of credit.

4.  Understand the different types of credit and diversify your portfolio.  Many banks have great resources on line to help you calculate  the type of credit that is right for you.  A good example is Comerica Bank – one of the top small business lenders in the country.   Go to www.ComericaBank.com  and click the Small Business or Corporate tabs based on your company size.  It is full of great information PLUS calculators to help you determine the right type of credit for what you might need.

5. Monitor your progress.  Talk to your personal business banker.  Know what your Dunn and Bradstreet profile says about you.  Create a credit portfolio and manage it like you do your stocks and other investments. 

So you might want to work on your business credit – you never know when you might need it!

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker

A Time for Growth – the era of the entrepreneur

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Recently, I had an opportunity to share ideas with a group of legislators, educators, and business leaders on the role of the entrepreneur – now and in the future. Any time you get a group together, getting agreement can be a real challenge. But on one area we had unanimous agreement – Entrepreneurs and entrepreneurial activity in both the private and public sectors will be a significant driver out of our current situation and for long term economic growth in the years to come.

 More and more Americans are starting or running their own businesses –

j0439328[1]There are a number of factors driving a change in how many of us view work today. In the last five years, during both the up cycle and our current down cycle, many workers left traditional jobs in corporations and explored new alternatives.

In some cases, what they found was more rewarding than their former jobs and they will not be going back to the corporate world again. They have opened consulting practices, restaurants, retail establishments and on-line businesses to name a few. 

Others will return to more tradition employment as the current job cycle corrects itself.

Additionally, population demographics are changing. In 2010, over one half of the world population will be over 50 years old and the average life expectance in the U.S. will be approaching 100! People will be healthier, more active, and less likely to retire, but will want the flexibility of non traditional jobs. A new entrepreneurial or self employed life style is very attractive to many of the people embarking on their ‘second 50 years’. In many cases, ”Boomers” have or have access to the resources and key factors for starting or growing a business – education, talent, experience, and the drive to create something new and different. .

Are you a “-preneur”?

An entrepreneur is someone who organizes, operates, and assumes the risk for turning an idea into a business venture while an intrapreneur is a person who does the same thing within a large corporation. In both cases, you take direct responsibility for turning an idea into a profitable organization or finished product through assertive risk-taking and innovation. The prefix before the “-preneur” simply shows where you are in the organization when you are driving change and growth. When at the helm of my own company – I am an entrepreneur. When working with clients – they have the ultimate responsibility and my job is to help them as the entrepreneur or intrapreneur. I like to think that as a “-preneur” you can make things happen – no matter what the structure of the organization you are in.

Is being entrepreneurial enough?

Not if you want your business prosper over time! The purpose and values of an organization are the next KEY to growth.

Defining the core purpose of an organization is actually the process of centering in on what you really care about – what you are really good at – and in the area where these activities come together – what you can do that creates a degree of value that people will pay you for. This is your core purpose or the primary reason that you are in business. If all of your strategy, goals and activities are focused only on what satisfies each of these three criteria, there is a much higher probability for success. Conversely, activities that do not fall in these areas are opportunities for outsourcing or partnerships.

The basic premise is to do what you do best and for the rest – partner with whoever is best at it. This defines WHAT you do as a company. The next key factor is HOW you will accomplish it. This is where values come into play. An organization’s values define how they do things. We always talk about how a company does something but the reality is that it’s the people inside that make things happen.

People’s values determine how they do things. How they act. How hard they work. How creative they will be. If you can match the values of your organization to the values of the people who are in it (or come into it), you’ve got a winner. When people share the same values, they don’t have to be motivated. They already are motivated. They find new ways of doing things. They focus on the customers. They make things happen because they believe in what they are doing.

Are you ready to grow…

j0439318[1]Be sure that growth fits in with your core purpose and values. Very often we see an opportunity to grow and we jump into it before we take the time to fully evaluate what it means to our business in the long term. Growth for growth’s sake can be very dangerous. Companies that grow too fast can lose their focus, confuse their employees or adversely affect the quality their customers have come to expect. In the most extreme cases they can even run out of cash and without cash everything stops. Here are a couple of questions every company should ask themselves as they move towards growth:

  1. Does the new product, location or service fit into what we have defined as our core purpose?
  2. Do we have the operational and financial resources to support the levels of quality and service our customers have come to expect from us?
  3. What should we be measuring each step of the way through the growth process to ensure we are continuing to move in the right direction?
  4. Who are the partners we work with who can help us with this growth and how can they help us? What are they best at?

The best advice…

Find something you can get really excited about. Starting any new business – or growing an existing one – is hard work and few pay off right away. You need to really care about what you are doing. It keeps you energized and enthusiastic when things get tough.

Once your business is established, use your passion, your purpose, and your values as a guide. Find employees and partners that share your passions and values. Together you can’t help but grow!

Thanks for stopping by…

Joan Koerber-Walker

 

Heading Back to School

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It seems like only yesterday that we were celebrating high school graduations, ramping up for fun in the sun, and celebrating not having to make an early morning run to the bank or Safeway at the crack of dawn for the weekly lunch money! But before too long, it will be time to head back to school.

back to schoolWhether you are sending your first grader off to his first big adventure, sending out a senior with dreams of diplomas dancing in her head, or making the journey yourself, the first day of school is a big deal. Heading back to school brings changes – new experiences and friends, new challenges and successes. How you achieve success is up to you – a little planning can make all the difference. Are you ready?

So as you prepare for the 2009/2010 school year, here are 7 tips to help you through whether you are a parent coaching a first grader, a seasoned veteran of the homework wars, or a returning life long learner:

1. Set a goal

Ask yourself or your student – “What do you want to get out of school this year?” This gives you a ruler you can use to measure your success. A friend of mine likes to say that “What gets measured gets done.” Good grades of course are a common goal, but that is not all you might shoot for. Get creative with your goals – something like – “learn something new every day” – keep it in a journal so you can look back at it at the end of the year. Another goal might be to get involved in a club, a sport, or a study group so that you add a little spice to your regular learning diet. .

2. Create a system

The next step in making the most of your back to school adventure is to create a system to help you achieve your goals. It would be nice if all we had to do was dream it and it was so, but usually it takes a little more than that. Even Itzhak Perlman, one of the greatest violinists of our time still has to practice – carefully – everyday. Being great takes more than just luck or talent, it takes planning and hard work. Ask yourself…

3. “Who do I want to be at the end of this journey and who can help me get there?”

Will you be a scholar – embracing knowledge for the love of it – or perhaps, you wish to be a teacher or tutor, sharing your knowledge with other students.- or maybe your goal is just to get through – gaining enough knowledge to meet the requirements for moving on to the next level while you focus your energies in other areas. It could be all of the above, or none of the above, the choice is up to you. The trick is – make it part of your goal and your plan to choose.

4. “What tools can I use to achieve my goals?”

There are many tools you can use to help you achieve your learning goals. Some are simple – a notebook, a pencil, a compass, or perhaps an eraser. (Nobody’s perfect.) Perhaps your phone can be a tool. Use a smart phone like the Motorola Q® or a Blackberry or PDA to manage your schedule of assignments or even use your camera phone to capture a blackboard full of notes. Phones today have everything from the cameras to calendars, and calculators to the Internet.

Fill a backpack with the tools you need, from snacks to keep up your energy, to reference books, or a planner if you choose a lower tech solution to keep things organized. But beware the bottomless back pack. It’s the nemesis of every helpful parent and erstwhile student. Bottomless backpacks eat notes and assignments. Backpacks are useful for carrying things, but if it all goes in – to never again see the light of day – they can be more hindrance than help! Use your tools wisely along your journey.

5. “Where will I go to focus?”

Get the lay of the land. Find your learning place. When I went back to get my MBA after 20 years, I knew that my study skills and lifestyle had changed. Now I had so many distractions – work, family, dumb things I needed to do. I needed a place where I could focus without any distractions. I tried setting up a place at home, but that did not work and even if I went into the office early – the day to day distractions followed me there. Finally I found a Burger King® around the corner from my office. They opened at 5 AM and were more than happy to let me study at a corner table. I had my breakfast and did my school work until 7AM before packing up and heading to work. The staff all thought it was funny and even became part of the plan – bringing me refills as I worked through my text books and even flowers when I finally graduated! Where will your learning place be? Find a quiet corner in your home, at the library, or anyplace where you can set yourself up, stay quiet and focus on what you need to do to learn. If you are a parent working with a young student – help them set aside their special place. Let them know that it is their little corner of the world. You are just around the corner if they need you, but it is their place!

6. “How will I focus in on achieving my goals?”

How we get in focus works differently for everyone. Some of us may use music to tune out the rest of the world’s distractions, others may need perfect quiet. If you are a fan of The Secret set up a Vision Board to help keep the positive thoughts around your learning goals in focus. A vision board is a simple tool. It can be a framed collage of the positive things you want to achieve – a picture of a report card will high marks, a diploma, or the college you want to go… Perhaps on your vision board you also have a picture of what you will do after school is through – a dream job or a get away location. If your learning place is outside of your home, use the front of your notebook or binder to make a portable Vision Board you can carry with you. Look at your Vision Board every day – see yourself achieving your goals, then buckle down and do what you need to do to get there.

7. “Whose job is my success?”

The answer is you. Each student must accept responsibility for achieving their goals. It is not the teacher’s job or a parent’s role force study or get necessary assignments in on time. YOU must make the commitment to your learning and to your goals. If you are coaching your children through the learning process, help them understand why what they are doing is important for them – not for you. “Do it because I said so” is not a learning motivator. Help them understand how what they are learning will help them get what THEY want. The job of a parent as learning coach then gets 100 times easier! Never nag a child about homework – it turns learning into a chore and defeats the purpose. You get frustrated, they get frustrated and you head into the homework death spiral. Instead – create a No Nag Contract with your student (or yourself). Come to an agreement where if “A”, “B” and “C” get done correctly and on time – then NO Nagging! This gives your student a chance to control their destiny and makes your home life a whole lot more pleasant!

Celebrate Success

Last but not least – as you are learning and achieving you goals – take time out to celebrate your little successes along the way. What is the point if you are not having some fun as part of the process? Reward yourself or your student with a movie, a walk in the mountains, or even a hot fudge sundae (my personal favorite!) Interim goals and the small successes that you celebrate generate the energy you need to succeed in making your long term learning goals a reality. So take a minute – chill out – look at your vision board – or just imagine what it will be like next May – when summer vacation rolls around again.

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker

What DO you do?

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Friday I got a tweet very early in the morning, just as I was heading out to a 7 AM meeting across town.  It said simply “What Do you do?” I sent of a quick note explaining with a link to my website and my number so the person could call me later if they wished.  Grabbing my purse, I headed out to the car.  As I was driving to my meeting with The Shea Group that question stayed on my mind.

Silver_Bullet_GripsThe Shea Group is a collection of executives and business owners who understand that learning and career development is a lifelong process.  Each time the group meets, a speaker shares their experience as part of the session.  This time it was Jack W. Milligan of Leathers Milligan & Associates a long time veteran in the area of human resources and executive career management.  Jack told us a story that really resonated with me.  It went like this…

“This is a secret that only human resource professionals know.  Hidden deep in every company, there is a special closet where they keep the silver bullets.  On the day that you start, they will engrave your name on one.  On the day that you leave you will get it back.  They may shoot you with it, or they may hand it to you as they once did an engraved gold watch.  But, that bullet is there and it has your name on it.  It is up to you to be prepared.”  Jack W. Milligan

Jack went on to share tips and techniques that every executive should be employing to manage their career both during employment and during the transition process that is sure to come at one time or another. 

So today I decided to give some real thought to answering the question – What Do you do?  Not just based on what someone might find on my resume or bio – which shows what I have done, but in  terms of what I actively do and engage in and what I hope to bring to the next growing company I have the opportunity to lead.

My “What I do list”

  • Engage employees and partners in our organization’s vision and with them develop a plan that delivers tangible results.
  • Lead throughout the execution process by example.  Never ask another to do something that I personally am not willing to do.
  • Communicate openly and often on what is working, what needs work, and what is yet to be done. Use every appropriate platform – from public speaking,  to writing, to informal chats to deliver the message.
  • Listen to what our customers and our market has to say, learn from them, and put those lessons to work.
  • Take forgotten or underutilized resources and redeploy them for added results
  • Reach out to our community to offer assistance, share ideas, and keep our organization connected, engaged, and respected.
  • Develop and mentor the people around me so that when my silver bullet comes, they can continue on the journey to find even greater success.

What’s on YOUR “What I do list”.  It’s a great exercise – try it and see.

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker

Looking back at a Perfect Storm

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During the downturn that shook the foundations of the technology industry after the dot.com implosion, I wrote and article about the Perfect Storm that hit the industry.  In that article I suggested that there are Seven Deadly Sins that can challenge the stability of the supply chain and our overall economy.  This was written in July 2002.

Reading it now, seven years later, it is amazing how we have seen the storm hit once again – this time in the construction and finance industries.  Hopefully someday we will learn our lessons.

bigwave2The Perfect Storm:
What happened to the Supply Chain in 2000/2001
and could it happen again?

July 3,  2002.

In November of 2000, Roy Vallee, Chairman of the Board of Avnet, Inc., the worlds largest electronics distributor, announced, at the Avnet, Inc. Annual Shareholders Meeting, that Avnet was seeing indicators that the Technology Boom of 2000 may not be sustainable.

This unleashed a storm of protest from analysts, investors and supply chain participants. While today we all know that those indications were all too true, with hindsight, we, as an industry, only wish he had been wrong. As the technology sector slowly begins the climb out of the most dramatic downturn in its history, the question asked repeatedly is… “How did this happen? & “Will it happen again?”

Many hypotheses have been put forward in the last year as to what happened and why it was so extreme. Some attribute the cause to:

  • The external environment – globalization, industry consolidation, Y2K, or the dot.com implosion and resulting telecom plunge;
  • Industry cyclicality – sharper and more dramatic cycles as the size of the industry and key sectors within it grow disproportionately;
  • Technology – our sophisticated IT systems let us down. The forecasts were all wrong;
  • An increasingly complex supply chain;
  • Wall Street – pressure for growth driving unrealistic forecasts; or
    All of the above – a Perfect Storm!

Pick any of the above and you can find people to agree with you as to what was responsible.

Interestingly, each of these factors is a “thing” we can point to. We do not have to take personal responsibility because it was an external economic effect, an industry group or corporation at fault, not us.

Organizations and IT systems do not make the decisions that drive the supply chain, people do. Each one of us represents a link in the supply chain and it is the choices we make every day that drive the outcome. Until each of us within the industry chooses to accept this responsibility, we are doomed to face similar extreme business cycles in the future.

So, if human beings are the key factors that control the supply chain, what are the human conditions that drive our supply chain behaviors?

The Seven Deadly Supply Chain Sins

The Path of Least Resistance: In our increasingly busy roles, seeking the path of least resistance comes naturally. Whether as engineers, we design with parts we have always used it the past (designing in parts at the end of their product life cycle or missing out on possible benefits procurement or manufacturing may gain with a more commonly available part) or as procurement and materials professionals we do not make the effort to establish part numbering standards so we truly know what we have and what we need. At one time or another, in good times and bad, we have all fallen into the trap of viewing the old ways as “good enough” rather than making the extra effort to optimize our systems and our processes.

Self Preservation: From birth, self-preservation is the most basic human instinct. Each of has a natural inclination to protect ourselves, our jobs, and our companies. In times of allocation or constraint, a buyer may double order or increase forecast requirements to ensure his company gets what it needs to keep the production lines going. In isolation this may be a small thing, but across an industry, this can create a groundswell of demand that may be unrealized as capacity is increased and product frees up. Within our organizations we use this nature of self-interest by creating incentive programs to drive certain behaviors. Unfortunately, these often conflict from department to department. Thus, our materials team must keep inventory low to earn their incentive and the sales team needs product on hand so they can get the sales level they need to make their sales goals. These conflicting interests lead to distrust and ultimately to breakdowns in communication or even distorted information as each individual protects his or her own interests. If our lines of communication break down within our own companies, how can we provide accurate information to our partners across the supply chain?   

Risk Avoidance: If as human beings we have a natural inclination to protect our selves, the next logical progression is to shy away from risk or find ways to shift the risk from ourselves to another. In the supply chain this manifests itself in many ways. In our contracts and legal forms we add penalty clauses and loop holes to shift the risk of doing business from us to another. Whether it’s the quality of imperfect forecasts, the liability for service or product failures, or artificial or often unnecessary restrictions on date codes, we often spend much more time and effort constructing rules and systems to shift risk to another than we do investing together to improve processes and systems to identify and mitigate the real risks we face. 

Fallibility: “Nothing and no one is perfect. There is always a margin for mistakes. But naturally the other guy will let us down more often then we will err. We must protect our selves from his failures.” This is the thinking that leads us to greater supply chain inefficiencies – bonded inventories, excessive buffers, padded forecasts, and ultimately inventory gluts. It is often easier to assume our supply chain partner will let us down than it is to pick the RIGHT partner and work closely with that them to develop strategy and process so both of us will be successful. 

Distrust: If everyone else is driven by self-interest, risk averse and fallible, no wonder we find it so hard to develop the levels of trust we need to share good information and partner effectively. When we do not trust our suppliers to deliver, we compensate in the supply chain. When we do not trust the product groups to have enough inventories, we pad the sales forecast. When we do not trust the MRP system we tinker with it. When numbers don’t give us the answers we need, we “adjust” them until they do. With everyone doing what comes naturally, it’s a wonder we get any good information across the supply chain at all. 

Greed: Whether you believe that “Greed is Good” or greed is bad, the interesting thing we often forget is that greed is not just about money. Greed is getting your “unfair share” of money, market position, market power, attention, and information. Interestingly if you take the word greed out of the description, it reads like the objectives of many of our companies. 

Increase Revenue & Profits
Increase Brand Position
Increase Market Share
Increase Market Intelligence

It is when greed gets out of control that we get into trouble. At the peak for the last technology wave, that is what happened. As investors we got caught up in escalating stock prices based on company projections that had little basis in financial reality or business basics. This influx of capital created a flurry of investment in telecom systems, IT infrastructure, and other products creating a groundswell of demand. As demand increased and supply became constrained, as buyers, we compensated within our supply chain to ensure we got our “unfair share” of what we needed. As sellers, we raced to capture orders and market share to get our “unfair share” of this inflated demand. And as an industry, we reeled in shock as the whole thing imploded. And then we started looking for someone to blame.   

Denial: When we refuse to acknowledge the truth, we are in denial. Another way to look at denial, one we got caught up in this last time around, is getting caught up in a wave of unrealistic optimism that approaches euphoria. Things were so great in our industry and we were so proud of our strategies, our growth, and our success, that we failed to look closely at the business basics our companies were founded on. Not only do we need to be aware of our own tendencies to get caught up in unrealistic optimism, but we must also be aware of the affect of those around us. When our biggest customer doubles his forecast, we double ours, plus a little extra just to be safe. So does his next supply chain partner and the next one. Soon the forecast has grown beyond anything sustainable, even assuming that the first projection of double growth was correct. At an industry or market level it is even more complicated. Here, when the analysts predict the market will grow by X%, each market participant projects that they will capture their unfair share. If you go back and add each company’s projection up, the aggregate often exceeds the level of projected growth. These are some of the storm clouds on the horizon that signal rough weather ahead.

Are We Doomed?

So with all of our faults, is it hopeless? Are we doomed to ever increasing and sharper cycles? NO! Each of us, at each level of our organizations has the power to drive change in the performance of the supply chain.

Looking at the bigger picture: Whether we call it a supply chain or a supply network, the reality is that the choices, decisions, and actions of each of us, individually, link to others within our companies and across the supply chain. If we are to truly develop the level of quality information needed to drive to success, we need to recognize the linkages to internal customers, partners, and external customers and ensure that we are sharing the highest quality information available at all times if we are to be successful in reaching optimal levels of performance.

Each of us must Dare to Innovate – Design for Supply Chain Information – Providing the design engineers with not only easy access to technical information, but also information on the product life cycle of the components, their availability over time, and parts that are most commonly used within their company and within their industry to reduce the potential for stock outs in time of constraint and liability inventory in times of excess. 

Materials Management and Procurement – Investing in resources, tools and partnerships to create solutions for standardization of part numbers and sharing that information between departments (like engineering) and other manufacturing sites around the world.
Manufacturing – exploring systems, tools and processes that add visibility into inventory activity at the point- of use and relaying it back through the supply chain to support lean manufacturing for lower manufacturing costs and greater inventory trend data to support improved forecasting within the materials management function.
Operations – establishing systems and processes to link global operations and create inventory and supply chain visibility. (This is especially challenging for international companies running on disparate computer systems.)  

Channels To Market – Ensuring that we have the right channels mix to match our products and services to the needs of our customers. Then, ensuring that the right information and support systems to support those channels are put in place to get maximum return on the Sales and Marketing efforts across the direct, representative, distribution, and self -service channels. 

Be generous with your supply chain partners: The opposite of self-preservation and self-interest is generosity. This willing ness to give and share freely is the key to our success as partners in the complex supply chain. Generosity manifests itself in the willingness to share complete and accurate information to partners, not just that portion that supports what you need right now. It also extends to the willingness to pay for the value a supply chain partner provides, and the openness to share what portions of the partners’ value proposition truly adds value. In today’s tight financial times, neither buyers nor sellers can afford services that do not add measurable value to the supply chain process. 

Understand Risks and create process improvements to mitigate them – Accept responsibility: No business relationship is without risk, especially as you move across a complex supply chain. The key is to mapping the process to identify the potential for problems and establishing service recovery systems to address them. In recent years the trend has been not to manage risk, but to try to shift it across the supply chain from the OEM to the CM to the distributor or Manufacturer of the component. For the supply chain to work effectively and for the participants to openly share information, each supply chain partner must accept responsibility for that part of the supply chain information and risk that belongs to them. Otherwise, innovation and trust between partners becomes impossible. 

Dare to Trust/Share REAL information: The key to being able to trust your supply chain partners is to pick the RIGHT partner, then give them complete and accurate information, set reasonable allocations of risk based on accountability for the supply chain information each generates, and then let them do their job. Choose the right partner based on their ability to get the job done, their track record within the supply chain and the innovations they can bring to your processes that add value and help you realize your goals. 

Greed is not all bad, but blind greed is dangerous: Wanting to get your “unfair share” is what business is all about. However, when we blindly pursue market-share, revenue, or other business metrics beyond what the marketplace can support, we all ultimately suffer. New innovations and businesses are developing to help us look at excess inventories across the supply chain. Identifying these excesses and redirecting them inside our businesses, channels, industry groups or the marketplace allows us to circumvent the build-ups of inventory that ultimately lead to gluts and market declines. As an industry we must enter into new types of relationships with our supply chain partners to add greater transparency to not only the product we need for the future, but also the residual inventory that is left sitting across the supply chain. By increasing this visibility, we get a better picture of what is needed, what is left over. We then have the opportunity to shift the resources back through the chain and put those assets to work for us rather than pushing them off to a partner as a liability. 

Temper Optimism with Realism: At the height of the boom, optimism was at its highest point. The cyclicality of the technology industry was “a thing of the past” and business was continually headed up and to the right. As the market drastically corrected, reality set in and we all scurried for cover, drastically cutting back on our product requirements, canceling orders and pushing as much liability away from our selves and back towards our supply chain partners. In the darkest days of the downturn, we lost our optimism and trust in each other, cut our costs wherever we could and battened down the hatches to ride out the storm. Looking around us, we hoped that we would make it through and knew that some others may not.

Today the storm clouds are beginning to dissipate and many analysts predict that we are starting a slow recovery from the Perfect Storm that started in 2000/2001. As we move towards recovery, there are lessons we have learned that point us towards smoother sailing in the future if we choose to heed them and learn from the painful times we have been through. We must hold on to the optimism that better times are ahead, and invest accordingly, but we must also temper that optimism with a never ending awareness of the market forces swirling around us and not be afraid to raise the storm flags when optimism conflicts with market reality. 

So, to answer the questions we started with: How did this happen?
Because we let it.

Will it happen again? By the nature of technology, there will always be a measure of cyclicality in our industry, but the shape of those cycles is up to all of us based on our supply chain behaviors. Eventually, there will be other storms in the high tech industry. It is our choice if we sail right into them, as we did this time, or if we plot a new course, one marked by the sharing of accurate and complete supply chain information between partners, a willingness to be held accountable for our supply chain information and decisions, and a willingness to take the time to find the RIGHT partners and then give them what they need to support us across the supply chain.

How will you chart your course?

(This article was originally published in the CorePurpose Executive Brief,  July 2002)

Thanks for stopping by.  Stay  Tuned…

Joan Koerber-Walker

Are Leadership and Management Mutually Exclusive?

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Are you a LEADER? Do you even want to be? One of the hottest topics of conversation in business and education today is leadership. We talk about it in the boardroom; we look for it in our elected officials, and integrate it into the classroom from the elementary school to the university. Back when I was in school, we focused on learning how to manage. Today we focus on learning how to lead. But, we may have shifted the focus too much. Contrary to so many things we read today, management and leadership are not mutually exclusive skill sets.

innovation 4The reality is that we need both managers AND leaders depending on the circumstance. Probably the easiest way to know what style is needed when is to look at what you are doing. When we are involved in making sure an event comes off smoothly, a plan is executed cleanly, or we are keeping track of important things at home or at work, we need to manage. When we are motivating people, changing directions, or exploring new areas, projects or things with our family, friends, or work teams, we have the opportunity to lead. Note that we have an opportunity – not necessarily an obligation – to take the lead. In many cases, too many leaders can be worse than too few. If multiple leaders are pulling the team in different directions – you don’t have leadership – you have confusion. But if you build your team with a solid mix of managers and leaders – with both respecting the contribution the other brings, you have a better chance of getting to where you are trying to go.

To manage or to lead? That is the question.

Much has been written on the difference between management and leadership. Two of my favorite writers on the subject are Warren Bennis and Ken Blanchard. Both have created great models that explain the difference between managing and leading and both draw the distinction between managing processes and leading people. The following table is a combination of their ideas and mine. It gives you a nice short list of the styles and behaviors we use when we manage or lead.  

Managers Leaders
Are Systems Focused Are People Focused
Direct Activities Encourage People to get on board
Control Assets Create or find resources
Risk averse Risk tolerant
Administrative by nature Innovative by nature
Focus on How and When Focus on What and Why
Emphasis on doing things right Emphasis on doing the right thing
Goal/Plan Oriented Visionary
Monitor near term results Look to the far horizon

As you look at the differences between the two, it is very clear – great leaders are important for our future direction – but it is the team and the managers that actually get the work done and make sure things happen. It’s like Oreo® cookies and milk – both are good individually, but together they are even better.

Preparing mangers and leaders…

So often we hear of people who are born leaders. Implying that leadership is instinctive or programmed into your DNA. You either have it or you don’t. But if you look at the games we played as children, they actually laid a foundation for our future management and leadership skills. In our early years the best follower was usually the winner. Think about games like Simon Says, Mother May I, and of course, Follow the Leader. Paying attention to details, following directions, and doing things just like your ‘leader’ was the key to success. If you were the best at observation and imitation, you won the game and moved to the front of the group.

As we grew older, new activities began to focus more on our talents and skills whether it was in the class room, scouting, clubs, sports, or music. Normally we chose the person we would follow based on their skill or experience. The games or activities had rules or guidelines, but within boundaries, we were encouraged to be creative in order to achieve our goals or win as a group. We also quickly learned who was best at a particular activity and more often than not, they became the leader for the day. Our parents, teachers, coaches, or troop leaders became our role models. How they managed or led were the examples we used to develop our own individual style. When we saw things we admired, we emulated them. In other cases, we may have rejected what they did and how they did it. Creating our own style based on the way we wish we had been treated. If you follow this logic, managers and leaders are not born. They are formed by the examples and the experiences we give to them. When I think of it this way – it makes me think twice – suddenly it’s just about what I need to accomplish, but it’s also about the way I will do it. If someone is always watching, how I choose to manage or lead will impact not only today’s activities but can have a lasting impact on the future managers or leaders who are watching what we do.

If no one is following you – how can you be a leader?

As every good drum major knows – they may be marching out in front – but the band makes the music. Good leaders and managers know that it is their team that makes the difference on whether or not they will reach their objective. Leadership implies that there must be followers. Management implies something to manage. Good managers and leaders must also not be afraid to step back and follow when another’s skills, talents or experience would provide a better solution. And as role models, we can demonstrate the value of being a follower as well as the person out in front. Our job is to recognize what skills to use and when so that the team is successful, the job gets done, and the vision becomes reality. After all – that’s what management and leadership are all about.

Thanks for stopping by.  Stay tuned…

Joan Koerber-Walker