The Shift from Service Provider to Integrated Alliance Partner

As end users become more sophisticated in their operations they understand through experience the real advantages of optimizing product delivery processes.  It is natural that they should want to extend those advantages to key services, both provided and received.  Supply Chain Management (SCM) is often thought of as a manufacturing discipline, which it indeed is.  Today, however, SCM principles are being adapted to the services side of business as well, with rewards and dividends to both sides of the provider / end user relationship.

For many this is a fundamental change requiring acquisition of new skills, knowledge, and mind sets.  These folks must learn to walk first, but getting up to “business speed” cannot take too long.  Others have the requisite skills and knowledge but need to extend them to new areas of their business.  In both cases, overcoming ingrained cultures running counter to the initiative is paramount and something that should be thoughtfully done.

Across industries and market sectors companies are looking for service providers who want to partner with them at new levels.  Whether the end product is machinery, financial services, a new building, or operational in nature; optimizing the delivery process is now a holistic agenda that encompasses all required resources.

What Is Driving Business Integration?

For starters, better educated and more demanding customers.  As organizations improve internal management systems and mechanisms they develop new intelligence about themselves, their competition, customers and yes, service providers.  Business intelligence is a greater differentiator now than ever before.  Process improvement, Six Sigma, metrics programs and other initiatives of their ilk are changing the way we understand and organize our work.  As that intelligence matures it begins to ask new questions, test new ideas, and probe for new advantages.  Extending that intelligence beyond the boundaries of your own organization by challenging business partners to match it in their domains and align their processes with yours is a natural next step.

Competitive intensity has increased in recent years, partially the result of economic stress.   Focused by the need to survive some companies have pared away non-core businesses, reduced or expanded offerings, or taken advantage of opportunities to expand and grow.  Behind all of these strategies is a single imperative – succeed when others do not.  The oft-quoted exhortation to “Never let a good crisis go to waste” has been taken to heart. These activities amount to a reshaping of business, each incidence an opportunity to streamline processes.  Many companies have gone after these opportunities with zeal and more often than not they challenge their business partners to match them stride for stride.

Customers seek to minimize the number of business relationships they must manage.  Their goal is to lower the amount of management friction that is applied to the business of doing business.  As a result, strategic business alliances often form in which multiple businesses collaborate in competition against other alliances.  It’s not just your company competing for business anymore, it is your alliance competing against other alliances.  That means each alliance partner has a vested interest in each partner’s business performance; and it motivates alliance partners to plan, act, measure, and communicate in similar fashion.  You cannot do that when your processes, standards, and tools are different.

Fulfillment of customer requirements has always been the primary business purpose - it has not always been the primary business activity. Although SCM began as a manufacturing discipline, business in general is moving from a production-based model to a fulfillment-based model, improving business speed and alignment.  The foundational principle at work here is that of connectivity, creating networks of entities that share business intelligence and act together in synchronized fashion.  As this model moves further down the chain efficiencies and advantages are increased to the advantage of all in the network.  Inherent in this model is the recognition that individual firms depend upon resources controlled by others in the network.

Integration Tools

Deployment of secure and integrated information technologies across the customer – provider alliance enterprise enables process synchronization and speeds the flow of information.  In classic terms, such seamless operating protocols make pulling resources vs. pushing them possible, thereby avoiding stranded investments for inventory, space, and management systems at each level of the alliance.

Common measurements and language are critical elements.  Each partner in the alliance may elect to retain measurements they feel are uniquely important to them but which are not relevant to other partners; all partners, however, should adopt common measurements and language for tracking and reporting enterprise activity.  If, for example, the customer’s five most important Key Performance Indicators (KPI’s) are expressed as cost per end unit or cost per revenue unit, then the alliance partners providing support services to the customer should provide measures of their business that feed into the customer’s metrics in similar fashion and language.

The human part of the equation requires specific attention.  The degree of transparency required can be a challenge.  Sharing business intelligence and allowing visibility and integration of key processes may be a new dynamic for some.  Employing managers who have a collaboration orientation, are comfortable working with a range of technology systems, and who understand process design should be a priority for any firm engaged in an alliance business model.  Linking compensation to alliance performance strengthens the leverage towards implementation of cross-enterprise best practices.

Information is the Currency of Integration

Integrating and managing the supply chain seeks to assure that the right part shows up at the right place, at the right time.  The goal of services integration is to speed information to the point of need exactly when needed, thereby enabling the deployment of services in the most efficient manner.  The opportunity to integrate services to the level discussed here is enabled primarily by technology and information systems.  Information becomes knowledge, and knowledge becomes wisdom.  Wisdom, when acted upon correctly and speedily, becomes advantage.

Condition-based service management systems proliferate today.  I get an email from the car dealership with an appointment date and time when it is time for an oil change in my vehicle; not based on distance driven or elapsed time but on the actual condition of the oil and operating conditions of the engine, and on the day of the week and time of day I prefer based on the history of previous visits.  Sensors communicate automatically when set parameters are reached, triggering a process that results in my pulling into a service bay.  In building management an exact parallel occurs when an outsourced HVAC maintenance provider is dispatched to service a unit by automated sensors linked to intelligent building systems.  This model can be applied at multiple levels, even to stocking paper for copiers.  The fact that cloud computing largely eliminates the cost of deploying these technologies is speeding their adoption.  Service vendors lower inventories, redeploy capacity, and reduce costs.  Customers have greater visibility, can forecast more accurately, and have more control over cash flow.

The philosophies behind service chain integration are not new: Deep integration of business processes by alliance members who are invested in each other’s success, who are intensely customer-centric, who trust each other and accept accountability, who are driven by a desire to achieve process excellence, and who share business intelligence willingly.  When merged into a cohesive operating system each becomes a force multiplier for the others, improving service quality, cost and efficiency.  

Are Productivity and Email Mutually Exclusive?

I recently worked a major development project and found that the 600+ emails a day were completely paralyzing me, and I knew I wasn't alone.  I announced that I was implementing a new policy of "Planned Neglect."  Essentially, I said "I will look at emails first thing in the morning and in the evening, no more than thirty minutes each.  If you have a crisis that I absolutely must participate in then come see me or call me.  You know where I am and you have my numbers.  Use them."

As a result I discovered that,

• My ability to focus concentration on the most important matters and tasks increased dramatically
• My productivity and value contribution soared
• The quality of personal interactions improved
• People respected and even cheered my stance, and
• I enjoyed the project and life a whole lot more

This was not me running away and hiding from the world.  I did not limit my accessibility to the team, in fact I improved it.  Lesson learned?  Some day email will go the way of the Dodo Bird.  Until then it needs to be managed, as does any other good tool that turns into a time killer.

Your productivity and value quotient are the most important assets you contribute - protect them.

Your Transparency Is Showing

Whether you know it or not, your actions and motivations are more transparent today than ever before.  Those around you observe and note, not just how you respond to things you are directly responsible for, but for those you have a less defined but still important relationship to as well.  Stakeholders, both internal and external are observing, forming perceptions and opinions, and acting. 

In today’s era of Corporate Social Responsibility (CSR) we are held to a different standard of engagement.  Co-workers, leadership, and customers expect us to take a broader view of our responsibilities and the wider reach of decisions and actions.  They expect us to be accountable not just for the details and bottom line of our job, but for the effect of our efforts beyond the parameters of this year’s performance goals.  They expect us to care about the effects of what we do.  This is not a new phenomenon.  None other than Peter Drucker connected the dots between our actions and our responsibility for them on a broader scale.

“One is responsible for one’s impacts, whether they are intended or not.  This is the first rule.  There is no doubt regarding management’s responsibility for the social impacts of its organization.”

Sometimes knowing what we should feel responsible for and how to act are not always easy.  The old adage “do the right thing, the right way, for the right reasons” is a good place to start.  Adopting that principle as a foundation simplifies what can become a complicated equation at times.  When individuals and organizations operate from this perspective transparency illuminates motivations and increases acceptance and support for good efforts.

In today’s world increased visibility and instant communication platforms foster instant judgment making and perception decisions, often without the benefit of the full story or proper diligence.  Society generally expects us to be aware and accountable.  The degree to which we are perceived as being good or bad actors on the societal stage is important to us as individuals and organizations.

Parallel development of increased awareness of actions, improved access to large amounts of data and the ability to analyze it, and enhanced sensitivity of stakeholder communities combine to increase transparency.  The question is not “Am I transparent?”  The real question is, “How will I act to assure my transparency is a positive force?”

Many companies today are actively engaged in CSR efforts.  Some are large scale and visible, and get press because of the corporate logo they are associated with.  Some are small but no less important, undertaken in a “everyone do what they can” spirit. Some of these are important and beneficial, changing the lives and future of workers in distant parts of the world we never thought of or cared about before.  I wonder, however, how many CSR programs amount to little more than “CSR-washing” (to borrow a phrase from the Green world).  As is often the case in life, I suspect that the difference between substantive programs and those which seek primarily to bolster marketing efforts is one of motivation.

In the HBR article “Leadership in the Age of Transparency,” Christopher Meyer and Julia Kirby set out guiding principles for acting responsibly.

Take ownership of the things you are directly responsible for.  With increased communication, measurement and analytic systems we can today understand the effects of our decisions and actions in ways we could not before.  That fact alone brings accountability for the extended impacts we create. 

Take action even when the impact cannot be precisely measured.  When we understand or learn that harm is occurring on our behalf we have a responsibility to act even if we are not directly causing the harm.  A good example of this would be taking the initiative to train supply chain partners producing products in a way that is detrimental to workers or the environment. 

Take interest in those things that we may not be directly or indirectly involved in but which have a connection to our activities.  In the article Meyer and Kirby use the example of an oil company that is helping to develop an affordable and clean-burning alternative to cookstoves uses widely in undeveloped regions of the world.

The issue of responsibility, whether corporate or personal, is really an issue of integrity.  I am not suggesting that each of us is responsible for everything we see and know.  I am suggesting that we are responsible for those things that we are involved in and for which we have the capability to affect or influence.

Transparency, responsibility, and integrity are linked in a way that cannot be broken.  It is not about an agenda or cause.  It is not about a current trend or market share.  It is about....

Doing the right thing        The right way       For the right reasons

Transparent Leadership

If you have ever worked for a leader who is genuinely and intentionally transparent then you understand the freedom such a leadership style creates.  It is in part a freedom to take appropriate risks, but only in part.  More to the point, it is freedom to be honest, direct, accountable in a non-threatening manner, and to create.

While many transparent leaders may be naturally wired this way I do not believe this leadership style can be successful unless intentional in design and consistency.  A transparent leader must have confidence in himself or herself, trust in others, and establish an environment that encourages transparency on a broad scale.  These leaders can be recognized by the traits they exhibit.

Transparent Leaders Focus on Solving Problems:  Approaching failures as problem solving and learning opportunities allows those involved to objectively search for facts without assigning blame.  Accountability remains an important organizational value with the underlying goals of improving future outcomes through honest investigation and analysis.  When the root causes are out in the open everyone will know what the contributing factors were and who was responsible for them.  Blaming is not necessary, learning is mandatory. 

Transparent Leaders Value Candid Talk:  A common mistake in the midst of failure or conflict is the rush to move past the point of pain to re-establish a comfortable, non-threatening equilibrium.  This prematurely shuts down the kind of honest discourse that challenges assumptions and reveals root causes and future opportunities.  Respectful dialogue and relationships are key to creating an environment where candid talk, direct talk about important issues, is viewed as non-threatening. 

Transparent Leaders are Fully Engaged:  Leaders who “parachute in” to give motivational speeches, make urgent demands out of context or worse, embarrass or humiliate, put their own insecurities on full display.  Some may still value the full on autocratic leadership style but it can rarely be successful in today’s business world.  Teamwork and collaboration, the hallmarks of contemporary business, require a level of trust that can only be developed by being fully engaged, having the team’s best interest as first priority, and establishing a win-win environment.  Doing so requires that the leader be “present,” engaged, and focused on removing obstacles to success.

Transparent Leaders Share Leadership:  With a style that is focused on developing an environment that values accountability, candid dialogue and engagement; transparent leaders tend to trust team members with greater responsibility and freedom.  This allows others to take leadership roles themselves, helping to develop personal and organizational assets that strengthen the whole.  Releasing team members in this manner and allowing them to share in leading, including its challenges and rewards, encourages trust and the kind of shared respect that will serve well in tough circumstances.

Transparent Leaders Hire Well:  Choosing those you will partner with in a transparent organization is especially critical.  With increased transparency, trust and loyalty expectations of team members leaders must evaluate talent from a different perspective.  While intellect, training, experiences and education are always important factors, personal integrity traits take on greater importance.  Hiring the smartest candidate with the best experience background may not be the best option if you have questions about their commitment to the team.  To the old adage “hire the best and the brightest” you should add “and the most trusted.”

The transparent leadership style is not just about the leader’s personal make up.  True, some personality traits make it a more natural style for some than others.  But it is also a purposed style with specific values and goals, all of which can be developed and duplicated.  And that in one sense is the real value of the transparent leader – duplicating his or her value through leading and mentoring; developing new leaders who understand, appreciate, and seek to replicate transparent leadership.

The Magic of Doing One Thing At A Time

Tony Schwartz has a great blog post at HBR on how multi-tasking is not always such a good thing.  Good stuff and I'm a believer.  It's more than longing for "the good old days," it's about being able to maximize the impact of our time.  Check out ....  http://bit.ly/y7wvHy

The No Asshole Rule in One Company: A Simple Decision-Tree

Simply too good to pass up, here is a reblog from Bob Sutton's Work Matters site.   What I like about Bob's work is that it is common sense and no nonsense.  He tells it like it is and he is almost always right on.  

I recently posted an updated version  of People and Places that Use The No Asshole Rule.  In that spirit, a group of students in my class Organizational Behavior: An Evidence-Based Approach did a little case study of how a local start-up (with about 150 people now) is sustaining a civilized workplace.  I liked this simple decision-tree as it captures much of the essence of how to enforce the rule -- assuming they actually use this rather than just talk about it!

How Can You Lead When You Don’t Agree With Your Leader?

Leading can be messy business.  It has its rewards but challenges are never in short supply it seems.  Partly I think leading is complicated because it is relationship based and relationships are always in flux. It is easy when the person you look to for leadership is aligned perfectly with you and the same is true of your relationship with those you lead.  But that doesn’t happen very often.  In a large sense, successful leadership is defined in our ability to be effective in spite of these mis-alignments.  Yes, one of a leader’s most important functions is to improve alignment, but when alignment is a goal and not the reality a leader and those he or she leads must still be effective.

Understanding the other person’s perspective is a key for me when I am in this misaligned state.  To understand I must listen, pay attention, synthesize, evaluate and reach conclusions on why the other person has the perspective they do, its validity and importantly its motivation. 

An interesting thing happens here.  I cannot understand without information.  In order to get the information I need to ask open questions and listen honestly.  I must probe to find out what the other leader believes, why he or she believes it, what experiences or data has led them in this particular direction, and I must be willing to accept that they may be correct.  I must engage our relationship in open dialogue which in turn engenders mutual respect, transparency, and trust.  In the end I may not necessarily agree with their conclusions or they with mine, but if I can understand their process and reasoning I can make an informed decision to support them anyway or continue the dialogue to press my perspective. 

It’s that relationship thing again.  By nurturing it through rough spots I help strengthen it.  By abandoning the effort I weaken it.  By leaving it I lose my voice.

This is not an unimportant point.  People sometimes flee positions because of misalignment conflict, robbing themselves of an opportunity to contribute and mature.  These are conditions that will be repeated often throughout a career.  Fleeing such a situation now does nothing to prepare you for the next.

The value of visible conflict resolution should not be underestimated in its effect on others.  When these types of leadership conflicts exist in organizations it makes people nervous.  There will probably those who are aligned with each side for a variety of reasons, but everyone will know that the leadership tension exists, and that will make people nervous.  Some may even begin postulating negative repercussions of the conflict and then begin to act on those concerns, creating another set of issues that must be overcome.  But, just as everyone will know there is a conflict among leadership they will also know how it is being processed.  They will see when you are honestly looking for ways to make it work, and that fact alone will build their trust in your leadership.  Why?  Because they will see that you take it seriously, are willing to listen and learn, and that you conduct yourself respectfully – all traits that people value in leaders.

Asking yourself what you need to learn about a particular conflict is possibly the most important step when beginning to face a conflict in leadership.  This internal question sets the tone for how you will engage the other leader.  Often you will find that the most important things you have to learn are about yourself.  What is this situation trying to teach me?  What deficiencies do I have in dealing with this situation and how can I improve them?  How can I approach the other leader in a way that encourages transparency?  What is my responsibility to those I lead and the larger organization in this circumstance?  What is really at stake here?  All of these are important questions to ask as you begin to seek information that will contribute to resolution.

Leading really is a relationship thing.  Paying attention to your relationship with other leaders should be a purposed and principled behavior.  Expecting that you will be in perfect alignment with them at all times is not reasonable.  Seeking to fairly understand, communicating and leading effectively as you work to resolve misalignment issues is absolutely expected of you – by those you lead, other leaders, and I hope by you.

Prime Directives of Leadership

If you have even a passing interest in the subject of leadership then your bookshelves are probably full of volumes on the subject.  New books appear monthly, not to mention journal articles and other forms of publication.  That is all well and good.  I am not here to suggest that all the attention devoted to the topic of leadership is unwarranted or unhelpful.

I do suggest, however, that the prime directives of leadership - the very core things that it seeks to accomplish, are well known.  There may be new concepts and techniques on how to successfully lead, but the key goals remain largely the same.

Leadership is personal.  It is a matter of substance but style is important as well, sometimes fundamentally so.  Since it is personal each leader must walk his or her own path.  That makes a leader’s understanding of who they are, who they are engaged with, and the environment in which they lead a most critical function.  In order to come to a point of clarity on these issues one must be thoughtful and intentional.  Leadership doesn’t just happen.

At the end of this evaluation process you will have reached conclusions about the organization and people you lead, and yourself.  What is it that makes you the right leader for this group at this time?  How does your style support or hinder what you are trying to accomplish?  Where does it need to be strengthened or changed?  With the answers to these and other questions you will be prepared to think about how to set about accomplishing your own prime directives of leadership. 

What are your leadership prime directives?  Where have all those books you’ve read, the challenges, failures and successes you have experienced, your observations about the environment around you…where has all of that led you to in terms of your own Prime Directives of Leadership?  Here are mine.

Leadership Directive 1:  Lead with Integrity

Integrity is at the top of my list because I believe effective leadership without it is impossible.  People must be able to trust those they follow or they will not do so willingly, enthusiastically, or when the going gets tough.  To me, integrity is about that earned trust.  Leading with integrity requires that you have a set of principles, goals and strategies which are transparent, worthy, and consistently applied. Leadership is not about smoke and mirrors.  It is about honesty, directness, focus and attention to detail; all applied in a way that moves individuals and organizations forward.

Leadership Directive 2:  Envision, Energize, Empower

Leaders must articulate a vision that will energize others towards a better future.  The “vision thing” is so big that without it one is not a leader.  The vision should challenge people and inspire them help create its reality.  Leaders cannot accomplish big things alone, they must have the active and enthusiastic support of others.  To gain that kind of engagement the leader’s vision must be released.  People must feel they have permission to adopt it as their own, morph it where needed, and activate it through their own creativity and energy.  One of a leader’s biggest accomplishments is the adoption of his or her vision by others.  Instead of trying to control it, release it and watch what happens.

Leadership Directive 3:  Recruit Intelligence, Curiosity, Energy

To use a sports analogy, I generally prefer to draft the best available talent instead of the best available position player.  Only when a key specialty skill or knowledge is missing from the mix do I shift to a positional focus.  Otherwise, I want the best and brightest, period.  I want their intelligence to challenge me and to create breakthroughs, their curiosity to help discover new opportunities and solutions, and their energy to see it through and energize those around them.  When you have a group like this; intelligent, curious and enthusiastic, work becomes fun, problems become stimulating, and success becomes all the more enjoyable.

Leadership Directive 4:  Serve

If I have clearly articulated a sound and achievable vision, recruited the right team and gained their trust, then all of the requirements for success are in place.  Now my most important function is to do everything I can to remove the obstacles to their success.  As a leader I should be mentoring, coaching, teaching and challenging the team.  I should also be anticipating and searching for the things that impede their progress and doing everything I can to eliminate them.  By releasing the vision to others and then prioritizing my efforts towards their success I multiply myself many times over and increase the leverage I have on any particular problem.

Successful leadership is an intentional art.  It projects the leader and the organization forward in a way that enables a better future.  It is not accidental and requires a purposeful focus, and the ability to define oneself through the success of others.  I’ve shared a few of my personal “Prime Directives of Leadership.”  Do you know what yours are?

Procurement Diligence Pays Dividends

In today’s business world it is important that FM’s get the maximum value for investment while minimizing risk.  Being a smart customer is a good way to improve both domains.  Many of the business partners you depend upon daily remain under economic duress, which may affect their ability to perform successfully.  When the video store on the corner closes its doors it’s an inconvenience, when your outsourced maintenance provider or sub-leased tenant goes dark it’s a whole different issue.

An informed customer has a much greater probability of making smart decisions.  I am sure you do a lot of research when you prepare for a major personal purchase, such as a car.  You investigate quality and true cost of ownership, and read reviews from experts and other owners.  It is only when you feel fully informed and armed with the best information that you proceed to the dealer’s lot.  Making a major business purchase is no different – information is king. 

Who does the research is also important.  Abdicating this responsibility to your Purchasing group is not a good strategy.  You know the industries, issues and players.  You are prepared to ask telling questions that will reveal a potential partner’s true viability.  And it is you to whom leadership will look should a business partner’s performance jeopardize your operation because they are cutting corners or have failed.

Basic investigation should include a comprehensive evaluation of financial health and risk.  If a major financial or mission dependent decision is at hand then rigorous investigation is needed.  This should include a review of financial health including how well the company is capitalized, a review of their stock price history, independent conversations with clients of your choosing (ask for a full list and make your own judgment on who to call – don’t just call the three or four they recommend), and a SWOT analysis to understand their market vulnerabilities.  At the bottom line it’s about the bottom line.  Capital is the lifeblood of business.  Make sure they have it and know how to use it wisely.

Take advantage of leverage but maintain balance.  There are lots of ways to gain pricing advantage when dealing in a buyer’s market, but it is possible to damage future performance and the relationship by being too aggressive.  Unsustainable terms may look good now but can cause the provider to fail if they are not able to support operations in an acceptable manner due to cost pressures.  While you are busy figuring out how to get the best possible deal, turn the coin over and consider what provides the best possible value.  Aggressive but fair economics combined with performance measurements and penalities/incentives that compensate the provider based on true value enhancements to the customer will help set a win-win environment.

It’s all in the contract.  All the good intentions in the world aside, it is the contract that rules.  For important commitments contract negotiation should be an FM responsibility with Purchasing and Legal in a support role.  It is fair to include penalties and often it is smart to include incentives, as mentioned above.  Importantly, however, there must be a basis for understanding and interpreting performance in a way that minimizes ambiguity.  Performance data, metrics, SLA’s and KPI’s offer essential legal protection but must be well thought out and agreed to, as should the processes for collecting and reporting.  Another key clause is the right to re-bid and/or renegotiate the contract at any point at the customer’s sole discretion, with an appropriate notification period.  This will allow you to take advantage of economic shifts in the customer’s favor should they occur mid-cycle before you would normally have a chance to re-compete, or to replace the provider should performance fail to meet requirements.