Resources - “Just because there is a cheque book, doesn’t mean that you can write cheques.”

Due to the nature of the job, many supply chain employees are in a unique position that allows them to see how organizations function as a whole. Because of this whole picture viewpoint they tend to be called upon to provide leadership in areas that are not necessarily their key expertise. Subsequently, buyers who once purchased assets might be called on to become salespeople to clear out surplus assets. Supply chain people involved in acquisition of goods may also be asked to participate in the acquisition of services. While all of these activities fall under the umbrella of procurement, the parameters and issues associated with each can be quite different.

I found myself in a similar situation while involved in the project management and leadership of a national real estate project. The major component of this project included a plan to reduce the footprint of the corporate office. They realized that to continue the growth and evolution of the business, more sales people needed to be on the road rather than in-house. To accommodate this, the head office would become open concept with satellite workstations. As with many other initiatives the aim was to accomplish this in the most cost effective manner possible and with the minimal amount of risk. While the importance of this endeavour was acknowledged, no one felt comfortable taking it on so it was languishing in the “not my job” pile. Needless to say, it landed in my lap; after all, from my vantage point in supply chain I’d observed similar projects being undertaken.

This blog is not to recount the reasons for stepping up to the plate (although at RSVP, we highly encourage that type of initiative) but rather to tell you about the key learning that occurred along the way. CFOs are generally risk averse and big projects such as the one we were considering tend to make them very nervous because inevitably they know there will be large front-end costs. In this particular case not only would the CFO be the one supplying the funds but this project directly affected his territory and environment: the corporate office. He was also very close to the end of his career and while he recognized that the changes being made were necessary to the company’s success, I sensed that seeing his territory so radically changed before his eyes was quite difficult and not exactly the type of project he’d envisioned to close out his tenure.  Despite this though he was completely on board and supportive of the changes that were being made.

Keeping costs reined in didn’t go exactly as planned because while I might have a good handle of the whole picture viewpoint, I was unaware of some critical components involved in reconfiguring an office space. For example, reworking the electrical supply wasn’t as straightforward – we were hit with higher than expected fees and went over budget on that portion. The CFO was notified of these cost overruns and while he did approve the final expenditure he included the following caveat:

“Just because there are cheques in the chequebook, does not mean you can continue writing cheques.”

This simple statement really struck a chord with me and came to signify all the important things I’d learned while undertaking this project and that I continue to look to as a guiding principle even today. While the message was straightforward, looking beneath the surface I could see how the underlying concept had broader implications and could be related to other matters. For example:

• Strategic alignment. Agreement on strategic initiatives at all levels is key. Although many of the executive team were seemingly committed to the project, when it personally impacts them, it may be a different situation. Even though they can see the ultimate benefit, they may have deep reservations about being involved in it. When you are embarking on large-scale change, spend time nurturing relationships. It will make the initiative run more smoothly for yourself as well as for those involved. As an added benefit, it can help facilitate more open communication.

• Know the limits. These limits include not only tangible resources but people, time and financing. In the era when this project occurred not all items were clearly communicated and many assumptions were made that were not optimal for the organization.

• Go in with Open Eyes. Although you can volunteer for various types of roles, don’t project the illusion that you are an expert in all areas. Although there may be a cost, reach out to seek assistance. If I had done this, I would have better understood several components that were not included in the original plans and perhaps avoided the additional funding calls.

RSVP for Change: Run scenarios where there may be too much risk exposure. Then ask the question “Is what you are doing aligned with business objectives?” You may want to focus only on activities that align with objectives.

Management Insight: Knowing what items to focus on is key. Clear focus followed by successful implementation of those items will create value beyond dollar and cents savings. By leading the focus of a few items, it allows for better direction to leverage knowledge and lead the organization.

Linda Craig (@LindaCraigRSVP)
More Supply Chain insights at www.Retention.ca