I had a long conversation with an Asian business team not long ago that were developing Supply Chain functions in their company, and we had a long discussion about critical success factors for enterprise-scale Supply Chain. The one I always bring up is “good sponsorship”. But they wanted to know more, and we discussed it much further, and it led me to several insights to share.
I’ve worked with teams with excellent sponsorship, sometimes all the way to CEO level in the company. But they weren’t uniformly successful. Several were locked in the “model everything” mode of Supply Chain, while others struggled to blend Supply Chain with Enterprise Architecture, and others were looking at Supply Chain from a program governance, or process audit perspective. Different uses for Supply Chain, but not particularly “big success” type organizations (beating chest: seen the new “King Kong” movie?).
Organizations without good sponsorship tend to be ignored somewhat, of course: why should you work with them unless they were demonstrably valuable, or necessary to work with. For organizations that focus on program Supply Chain, getting ‘bootstrapped’ into delivering a lot of value is difficult without a mandated chance to do use them for programs. These teams can spend a lot of time to hunt for anchor projects that they use to perform internal marketing and establish and grow their value.
When I worked with Supply Chain in a former life with a Fortune-50 company, I established a large program-focused Supply Chain teams. Because the CIO and CSCO asked for us to work several key problems, we had the anchor points to both teach leadership in the team, and to establish credibility within the company to expand and diversify our role. We were successful in several dozen programs (not to mention an 80-billion dollar merger in Supply-Chain process), as well as setting up the Sarbanes-Oxley process team, and researching and developing specialized framework extensions of SCOR in the areas of Design and Sales.
However, not many people were aware that this was not exactly the vision for Supply Chain center of competency which I had originally intended.
One of the key areas of the company we also wanted to take on was business metrics and reporting systems. Now, at the time of the merger in 2001/2002, business metric management was highly contentious, to say the least. It was extremely difficult for the reporting teams to define standard metrics across different divisions and shared processes; it was difficult to set expected performance levels. There were continual struggles for ownership of business areas. Information is power, so visibility and control of management of performance metrics and measures were seen as a fulcrum to power. Above all, with the extreme diversity of IT systems, it seemed almost impossible to construct any coherent approach to managing the metrics without dramatic investments and development.
I knew through prior experience, and my team knew, that the ‘secret sauce’ for successful Supply Chain management is, in fact, simple reliable metrics reporting, and management of metrics to process performance goals. My original intent was, in fact, to construct a standard set of operational performance measures based on SCOR, and other operational frameworks from our toolkit, and then having ownership and access to raw company data, set up a team which looked at process measures, and would be able to extremely rapidly look at trends, find issues quickly (through models), and then quickly suggest changes. Without metrics, you end up in a reactive mode – process managed only when it has already been so defective that it is a glaring problem.
We had relationships with both measure reporting (IT) and metrics (business) teams, but they themselves struggled for some time with setting up an acceptable approach with the business divisions within the company. There were several classic false starts – the ‘data model of the company’, and large amounts of time discussing definitions of metrics.
Unfortunately, our sponsor fell ill when our team’s credibility was at a peak, and when we worked with him to begin direct support for metrics/measures reporting. We could have successfully taken on this responsibility, but he took leave from his job and died a short time later. We never ended up owning, or having sufficient influence with a measures/metrics business or IT team, so we had to fall back on being triggered to perform process management when processes were so defective it was obvious without systemic reporting that something must be done. Usually, of course, it was the customer who triggered events, and with regular frequency finance.
Within a short time however, the atmosphere changed. The effective COO of this company who took on the acting CIO role came into place. He had a strong accounting background, and had a strong focus not just on subjective performance and relationships, but the minutiae of metrics and measures. And, alas, he left several months later to take up a CFO position at another company. Team orphaned again! Practically Dickensian.
So: back from memory lane. When I look at other teams, the ones who do have sponsorship, but are still having issues around clear success at an enterprise level – dependent on business teams to sense defective performance, usually very late in the game, I would look at three key elements of the sponsorship.
- Does the sponsor focus on process and a process team in project terms, or in terms of managing business performance and resolving measurable issues?
- Does the sponsor also have sponsorship control over organizations which are responsible for business metrics and measures – operations teams, reporting systems and the like?
- Does the sponsor have an interest and background in ‘numbers’ – what we in Supply Chain look at in terms of accounting, economics, science or engineering?
If you find you have a sponsor who is lacking in the “metrics/measures” dimension of sponsorship, I would advise fairly serious education about performance metrics (SCOR metrics are an excellent start), the need to continuously manage them (set goals – gather performance – test results), and the need to link them to process and process management skills as a continuum of activity. If it won’t work, I’d suggest looking for other sponsorship for the Supply Chain team.
Ultimately, it is still about having “a word from our sponsor”. And hopefully that word is ‘measure’.