“All models are wrong but some of them are useful”

This is my full article contribution as published in Procurement and Supply Australasia earlier this week.

There are times that we get so engrossed into the black and white way of thinking that we forget that life is far from having absolute truths.

George Box put this in a succinct way:

“Essentially, all models are wrong, but some are useful”.

                                              George E.P. Box (Statistician)

Math model

WHAT IS A MODEL?

A model is a particular way of interpreting the world. A great definition can be found here:

“A representation of a system that allows for investigation of the properties of the system and, in some cases, prediction of future outcomes”.

We have been using modelling since times immemorial as, it is our means of understanding the world. Models have always superseded older versions or worked alongside each other satisfying different targets.

e.g. Isaac Newton had conceived a very elegant model of understanding the cosmos which worked very well until it was superseded by Einstein’s (see here for details).

Well, it happens to the best of us.

PROCUREMENT AND GEORGE

George Box’s quote above is relevant to any discipline.

Specifically, in Procurement we have many models we are working with: RFP, RFQ,RFI, Krajlic, ROSNA, Pareto, ABC and the list goes on. But, there is not one of these though that can apply to all situations.

As an example consider this:

If the requirement is to simply get the best price e.g. for commoditized products in fragmented supplier markets, then a strong candidate to use as a model is an RFQ tender.

The RFQ model though is not working for e.g. high spend/high risk categories. That is where you would want the supplier to invest in the relationship and collaborate achieving innovative customer solutions as you are probably also targeting new product development.

Especially when in today’s world the battle is between Supply Chains and not organizations in isolation, strategic alliances are becoming key differentiators for organizational success. RFQs as well as other transactional Procurement techniques do not work for developing such relationships.

I know that we all have personal favourites.

Models that may have produced great successes in the past. So, deep inside we tend to give these models more credit than they deserve.

The important thing here is to recognize every model for what it truly is i.e. just one more tool in our toolbox to choose from and use.

Reading, discussing with colleagues, experimenting,continuously learning allows you to expand your toolbox enabling yourself and your organization to choose wisely the right model for your next procurement project.

So, when on your new procurement project remember dear old George and spend time in choosing the right model for your targeted outcome, because:

“All models are wrong but some of them are useful”.


 

[Image courtesy of fdecomite / flickr.com]

“3C+1L”: The 4 basic qualities of an exceptional team member.

Can you describe an exceptional team member in five words?

Quite hard isn’t it. However, I believe it can be done.

THE QUALITIES OF AN EXCEPTIONAL TEAM MEMBER

A good team member should be:

  1. Caring
  2. Curious
  3. Courageous and
  4. a Good Listener

Let’s see why these qualities form the basis of today’s peak performing workforce.

600px-Working_Together_Teamwork_Puzzle_Concept

SKILLS FOR A WORLD OF COMPLEXITY

As mentioned before here,the complexity of today’s team structures make it hard to have universal standards.

Teams come in many sizes and have varying interests and targets. They can be self-organizing, rigidly structured, matrix, adhoc etc.

Thus, you would employ your team depending on the unique qualities required each time.

For contemporary teams though, one thing is for certain:

One size doesn’t fit all.

In saying this, I believe that there may be some underlying qualities that EVERY supervisor, team leader or manager would want their team members to have.

I call these the “the 3Cs and 1L of an exceptional team member” and they are:

1. CARING

Good projects are those that meet the requirements in time and quality and also over-deliver. Those that, as marketing gurus would put it, delight the customer and aim to do more than just satisfy the stated needs.

Practically, what this means is that, taking advantage of good listening skills, you develop what is required (what is required can be describe as the stated needs) but at the same time also prepare for the unasked question, the remark that will inevitably be made. Then build this solution into the project or have the answer ready to go.

Caring enough to endeavour to reach an exceptional outcome is a great quality to have in every team.

Caring enough to consider alternatives, contingencies and ask questions is the key to successful task and project deliveries.

This means that the team member desires to do exceptional work, works on the skills required to take his/her work onto the next level and finally aspires to become what Seth Godin so eloquently described in his great book Linchpin (a book that is highly recommended. A visual summary can be found here).

2. CURIOUS

As mentioned and elaborated on here, innovation and continuous learning are qualities that will be essential for the workforce of the future.

Innovation means that teams are curious enough to ask the right questions, clarify the essential facts, look outside the organization for best practices and bring new ideas to the table.

A guide to a simple but effective method of innovation can be found here and here.

The most important question to ask

in the 21st century is not Why but

Why not?

3. COURAGEOUS

In the past century, especially considering the era of the Ford product lines, obedience was a quality that was highly regarded. Obedience in the sense that workers needed to blindly follow orders. This makes sense when the expectation was to work in factory process lines doing repetitive tasks over and over.

Well, we changed century since then and now, the common denominator is not blind obedience anymore but thinking, creating and “contributing” (as Peter Drucker would suggest).

Process work becomes more and more automated. This is because computers and robots can perform transactional /process work much faster than you and I can, at a fraction of the cost.

So, the right question to ask now is: “What is the value that each team member brings if process work becomes more and more extinct?”

As discussed here innovative thinking, having new ideas and also having the courage to challenge the status quo are qualities that are and will be much in demand in the 21st century.

So, if you have hesitations speaking up, I am afraid that in the near future there will be very few positions left, if any, that would not include the courage to articulate your ideas as a key skill.

Of course, speaking up means that you provide a meaningful, respectful, positive contribution to the organization towards securing the organization’s success.

4. GOOD LISTENING SKILLS (active listening)

Team work’s inherent requirement is to be able to effectively collaborate. Active listening is one of the cornerstones of collaboration.

From simply specifying the deliverables to “selling” the final project outcome, today’s organizational culture requires this essential skill.

Especially, considering the risk and repercussions of conflict in a team environment, which is notoriously emergent when deadlines are tight and/or stakes are high, good listening skills is something every team should have in abundance.

For an analysis on Conflict Management and reference of active listening as a very effective tool towards conflict resolution see the Harvard Law School’s special report here.

 

For me, these are the four underlying qualities which are the sine que non for every team member.

What do you think?

Blog Sign up 9

George Vrakas (MBA, CMILT) is highly reputed in the fields of Services Procurement and Logistics with over 19 years experience in Procurement and Supply Chain. George is passionate about Procurement, Innovation, Continuous Improvement, exploring trends that will shape the Future, Team Development and the Modernisation and Automation of processes. George is currently serving as a Board member of CILTA VIC and is also a member of CIPSA and IACCM. George is the author of http://www.george-vrakas.com blog and has presented on Globalisation, Procurement and Continuous Improvement at various venues and universities in Victoria, Australia.

Image courtesy of Flickr user lumaxart of http://www.lumaxart.com


12 Essential Tools to maximise Productivity, Profitability, Employee Retention and Customer Satisfaction!

In previous posts (here and here) I explained how by using the concept of (Net Promoter Score) NPS you can establish  whether your notion of running a great Team / Organisation can be measured by this simple feedback loop.

But, how can you tell which areas you need to improve on when your internal NPS score is low?

Let’s look at a simple and practical method to do just that.

East Stroudsburg University

THE METHOD

The method I am suggesting is a simple 12 questions survey as detailed in Marcus Buckingham‘s books, “First Break All the Rules” and “Now, Discover Your Strengths”.

The survey was developed by the Gallup Organisation after their 25 year study of more than 1 million employees and 2,500 business units. What they found was a strong correlation between positive answers to this 12 question survey questionnaire and the below key business outcomes:

  • Productivity
  • Profitability
  • Employee retention and
  • Customer Satisfaction

THE GALLUP ORGANIZATION’S 12 QUESTION SURVEY:

    1. Do I know what is expected of me at work?
    2. Do I have the materials to do my work properly?
    3. At work, do I have the opportunity to do what I do best every day?
    4. In the last seven days, have I received recognition or praise for good work?
    5. Does my supervisor or someone at work seem to care for me as a person?
    6. Is there someone at work who encourages my development?
    7. At work, do my opinions seem to count?
    8. Does the mission of my company/department make me feel like my work is important?
    9. Are my coworkers committed to doing quality work?
    10. Do I have a best friend at work?
    11. In the last six months have I talked with someone about my progress?
    12. This last year, have I had opportunities at work to learn and grow?

                                                                                                   Marcus Buckingham, First Break all the Rules

QUESTION CLUSTERS

As you have probably distinguished the above 12 questions form 4 distinct clusters:

  1. Questions 1 and 2 -> “What do I get as an employee?”
  2. Questions 3 to 6 -> “What do I give as an employee?”
  3. Questions 7 to 10 -> “Am I in the right place to make the greatest possible contribution?”
  4. Questions 11 and 12 –> “How can we all give as a group?”

NECESSARY CAVEAT:

As with any such survey, running a productive culture survey means that you have established trust within your Team so that the survey outcomes are useful.

The survey can be run anonymously. This is recommended especially, the first time you run it as this can be used as a benchmark.

Thereafter and provided that you have worked on overcoming any trust issues, it is recommended to seek eponymous feedback so, you can discuss specifics with the respondents afterwards.

 

[Image courtesy of East Stroudsburg University / www.flickr.com]


What can a jungle story teach us about leadership?

Leadership is one of these words which, when you ask someone to define it, you usually get a vague answer or a platitude.

This is because people feel what Leadership is when it is present but otherwise, they find it very hard to describe it in words.

In such complex subjects I have found that storytelling has much to offer.

Drriss & Marrionn

A compelling story about leadership comes from Stephen covey’s classic book The 7 Habits of Highly Effective People.

If you have not read the book, it certainly has much to offer. If you have read the book, I am sure you will enjoy remembering this excerpt as much as I do.

STEPHEN COVEY ON THE DIFFERENCE BETWEEN LEADERSHIP AND MANAGEMENT

The story goes like this:

You can quickly grasp the important difference between the two if you envision a group of producers cutting their way trough the jungle with machetes. They’re the producers, the problem solvers. They’re cutting through the undergrowth, clearing it out.

The managers are behind them, sharpening their machetes, writing policy and procedure manuals, holding muscle development programs, bringing in improved technologies and setting up working schedules and compensation programs for machete wielders.

The leader is the one who climbs the tallest tree, surveys the entire situation, and yells, “Wrong jungle!”

But how do the busy, efficient producers and managers often respond? “Shut up! We’re making progress.”


I find this an excellent example of what the difference of management and leadership is all about. The story is both thought-provoking and self-explanatory.

So, next time anyone asks you “how would you describe leadership” maybe you can tell them a jungle story about the leader that both knew where the team was supposed to be and had the courage to cry “Wrong jungle!”

What is your leadership story?

[Image courtesy of Drriss & Marrionn / www.flickr.com]