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Tuesday, 29 November 2016

Are your KPIs inspiring positive change?

The challenge when developing workshops is to ensure that the sessions and breakouts embed new knowledge and insight for the delegates. Insight that means delegates go back to the office with changed mindsets, behaviours, ways of doings things or knowledge.

We’re all familiar with death by powerpoint, avoiding that therefore isn't that difficult to do! Developing breakouts is a little trickier, and certainly worth experimenting with.

A recent exercise for KPIs was one such example, and wonderfully helped bring the key learning points alive (even if I say so myself).

In order to have an experience of monitoring the KPIs they'd developed I asked the group to develop KPIs for the supplier management workshop that we could measure daily.

They thought they'd developed SMART and unambiguous KPIs that would drive the right behaviour, and certainly not get in the way of them achieving their stated objectives for the workshop. What we learnt however is, that even with the best intentions, KPIs can easily be counter productive or confusing.

Ambiguity of the KPI
One KPI suggested that 80% of delegates needed to get one 'a-ha' a day. 

As the workshop progressed the definition of an 'a-ha' was refined to include: something you'll do differently as a result of the workshop, an insight, something new, something that's made you think and so on. 
We discussed the % at which we'd be worried - ie 80% took the training from green to amber. What % took the assessment to red, and in need of urgent action?

Not linking KPIs to the outcome you want
Of course a-ha's are not necessarily the things that drive a change in behaviour - which is why I always ask "what will you do differently as a result of the workshop". Which could be better measured a week or month after the workshop, as delegates are asked to reflect on what changes they've noticed themselves making. Or even better their manager is asked to identify positive changes they've noticed,

Not applying weights to KPIs
We explored the impact if the above KPI did dip into red on one day - did that mean the workshop was a disaster? 

We felt the survey monkey to be sent after the workshop would hold a bigger weighting of whether the workshop was a success or not. Which meant we questioned whether there was value in monitoring a-ha's every day at all.

Responsibility for achieving the KPI is one way
I often call the a-ha's light bulb moments. 
We discussed whether it's only the content, and the trainer who has the ability to impact the achievement of these light bulb moments: Lack of clear personal goals for the workshop, distractions, resistance to change, false understanding of current competency level, and even not eating the right things, or drinking enough water can all have an impact on the attention of the delegate. As I touched on yesterday the heating in the room can also impact attention.

Which points to ensuring that the KPI's are seen as the responsibility of all parties involved not just the supplier. After all, if as a trainer I'm just chasing the big a-ha's, my sole focus on this may impact other areas of the training, and the delegates may not take responsibility for their attention and interest to ensure opportunities for a-ha moments are not missed.

KPIs that motivate wrong action
One KPI suggested time keeping needed to be 9-5 +/- 10 minutes. 

This resulted in a conversation about my ability to start before 9, and how many of the delegates would need to missing for me to not start on time, and was that fair to monitor me on something that was being impacted by their actions?  

It was interesting however to observe my behaviour. 

As we came to the end of day 1 I noticed the time was 1647 and said I'd keep in talking until 1650 in order to meet my KPI! A silly example I know, and yet such a great example that if we're not careful our KPIs can drive counter productive behaviours. 

KPI's that don't flex to suit the day to day agreements being made between both parties 
Due to flights on the final day meaning we wanted to leave a little earlier than stated, we extended day 2 by 30 minutes. We realised therefore that the wording of the above KPI needed to state 'agreed time' not to state the precise time. Otherwise we failed to meet the KPI for no reason than it was assumed that every day started at 9 and finished at 5.

The conversation about KPIs then touched on procurement KPIs that also provided examples of the above points:
  • Budget reduction targets when procurement don't own the budgets
  • Savings targets against first quote which mean suppliers could be asked to ensure they don't put in a good first quote, or are asked for quotes earlier in the process than we should
  • Savings KPIs that only monitor forecast saving, and don't go on to measure actual benefit delivered
  • Lack of any balanced scorecard with focus purely on savings   
Once you've developed your KPIs how will you ensure they drive positive not negative change in your suppliers or procurement team?

Alison Smith
The Purchasing Coach
Inspiring change inside and out

Monday, 28 November 2016

Is your Supplier Management like a thermostat?

Are your suppliers running too hot or too cold, and who is responsible for making adjustments so that they're just right?

On a recent supplier management workshop in Warsaw we were finding the temperature in the room hard to manage. At the end of day one the dip in attention and enthusiasm for the last 30 minutes was put down to the room being much too warm.

What it seemed had been happening is much like supplier relationship management in some organisations, that is:

One person adjusted the thermostat because they were too cold – taking it from -3 on the dial to +1, some time later someone took it to +2, and before long it was at +3, and we were sweltering.

Image result for thermostat
The next day we agreed rules for adjusting the thermostat:
  • One person was responsible for altering the dial
  • No one else was allowed to change the dial
  • The person making the change would get feedback from others before taking action  
  • Movement of the dial would be in single moves ie -3 to -2 to -1 and so on
  • Time would be allowed before subsequent changes to allow the earlier change to have time to take effect
Which resulted in a much more pleasant working environment.

Much the same I'd suggest applies when managing suppliers – what do you think?

Who is responsible for managing changes with your suppliers, and do they allow for small increments changes allowing time for feedback before taking further action? 

Alison Smith
The Purchasing Coach
Inspiring change - inside and out

Sunday, 27 November 2016

Are there similarities between F1 and your supplier management

Oh dear - first and second in the world would seem to be a great success but at what cost to Mercedes? More here on the news today that Nico Rosberg won the F1 title in Abu Dhabi.

As I read the report I wondered how it represented many supplier/buyer relationships in organisations?

If Mercedes is the relationship the supplier might be Rosberg, and the buyer Hamilton. Each wanting to win at any cost, ignoring the needs of the long term relationship in favour of the short term win. In fact even going out of their way to scupper the other party (apparently Hamilton drove slowly in an attempt to stop Rosberg coming in third or above).

How much time and energy has been wasted by the relationship to keep these 2 parties even talking I wonder? How sustainable are these actions for the long term relationship?

Where might you be ignoring the calls of the relationship for personal or even organisational gain?

Alison Smith
The Purchasing Coach
Inspiring change - inside and out

This blog feels aligned with the post written during the Olympics about winning together or leaving suppliers as the losers.