Making the Case for Spend Analysis

Getting a handle on procurement spending isn’t easy, but it can pay off in many ways. Spend analysis and the resulting opportunity to participate more efficiently in purchasing decisions can pay off in the long, run even if the up front costs are significant.

A good place to start is with an audit of existing purchasing data. Look for invoice duplication, overcharges, and transactions that are contractually prohibited.  Initial savings can bolster the case to bring in new software to better manage and analyze spending. Forcing all purchases, including Pcard,  to go through a PO system doesn't necessarily, solve the problem, but the purchasing group needs to be able to better see the spend in an easier and more complete fashion.

Some of the solutions available include:
SAS's Supplier Relationship Management
i2 Technologies' Strategic Sourcing
Oracle's Purchasing Intelligence
Ariba's Spend Management Solutions

Hiring the Winning Way

In his book, Winning, Jack Welch talks about the four characteristics that employees need to have in order to be successful.  it's therefore imperative to look for these qualities when you are hiring.

People who have positive energy are generally extroverted and optimistic, they thrive on action and relish change.  They love to work, love to play; in short, they love life.

People who have the ability to energize others, get them revved up with enthusiasm, can inspire members of their team to take on the impossible.

People who have edge have the courage to make tough decisions.  They know when it's time to stop analyzing and start deciding.  Many very bright people have trouble with edge because they see too many possibilities, and this prevents them from making a decisive choice and taking action. This kind of indecisiveness can keep an organization in limbo.

People who can execute have the ability to get the job done,  They know how to turn decisions into actions and push them to completion through resistance, chaos, and unexpected obstacles.

If a job candidate has all four of these characteristics, then look for their passion.  This is an authentic, heartfelt excitement about the work they do, and about the people with whom they work.  They love to learn and grow their responsibilities, and they're enthusiastic when the people around them do the same.  People with passion tend to excited not just about their work, but about everything in life.

Adapted from Welch, Jack with Suzy Welch. Winning. New York: HarperBusiness, 2005.

Contract Negotiation Mistakes

1. Thinking the yard is fenced in Don't assume only a certain subset of resources or conditions can be negotiated.  Get creative, and look for alternatives.
2. Failure to study your opponent Don't fall into the trap of failing to study your vendor, their market and any other things that might influence them.
3. Too aggressive Don't put the vendor on the defensive by attacking the negotiations too vigorously.
4. It's all about price It's actually all about win-win. Look for items that are high on your list and low on your vendor's list and vice versa.
5. Jumping too quickly Even if the opening offer is low enough to meet your needs, counter offer with something lower, or ask for something else.  This will leave the vendor feeling good about the negotiations.
6. Don't gloat No matter how good the deal is, never let the vendor know this as it may come back to haunt you later.
7. Terminology not defined or understood Insist that any terminology that could possibly be misunderstood be defined in the contract.
8. Inconsistencies within the contract Consider having a third party review the contract for inconsistencies.
9. Concern in one area will be overridden in another area Do not allow any area covered by the contract to be weak.  Every part must be solid for the contract as a whole to have strength.
10. Avoid redundancies You may not think so, but lawyers may view the same thing that is apparently stated twice as being in conflict, and this could cause headaches in court.

Adapted from Contract Negotiation Mistakes: Ten Mistakes to Avoid in the Contract Negotiation Process, about.com: http://bit.ly/axIVJ5

Networking Should be a Part of Every Work Day

More than one third of workers are knowledge workers, people whose productivity is measured by their ability to add value to information. The productivity of knowledge workers depends on their ability to coordinate their efforts as part of an organizational team. 

When a group of people come together to collaborate, they they have a group IQ, which is the sum total of their intellectual abilities. The single most important element in this turns out to be social harmony. This is the ability of group members to get along and to pool their talents for the greater good.

Many of the tasks that people are asked to do requires them to call on a loose network of colleagues who can share their knowledge and skills. Just how well people can work with these ad hoc teams, and cultivate members of their network is a crucial factor to success on the job.  Developing rapport with a network of key people before their expertise is needed in a crunch time will make the difference between getting help quickly and not getting help at all.

Informal networks can be divided into at least three types, communication webs, based on who talks to whom; expertise networks based on which people are turned to for technical advice; and trust networks based on who people turn to with their secrets, doubts, and vulnerabilities. Success depends on being a major node in all three kinds of networks, and this requires high levels of emotional intelligence.

Adapted from Goleman, Daniel. Emotional Intelligence. NewYork: Bantam. 1995.

Why Emotional Intelligence Matters more than IQ in Business

IQ has long been considered the key measure of a person's ability.  However, studies have shown that having a high IQ is not a good predictor of success in life or in the business world.  It is thought that IQ contributes about 20 percent to life success leaving 80 percent attributable to other factors such as emotional intelligence.

Emotional intelligence includes abilities such as being able to motivate oneself; to persist in the face of difficulties; to control impulsiveness and delay gratification; to regulate one's mood so as to keep emotions from blocking the ability to think; and to be able to empathize and to hope.

There is a cost to the corporate bottom line from low levels of emotional intelligence on the job. The consequences for a work group can be severe if a member or leader keeps exploding in anger, or has no sensitivity to the feelings of others.  Emotionally upset people cannot remember, attend, learn, or make decisions clearly.

On the flip side, there are clear benefits to working in a group whose members are skilled in emotional intelligence.  They would be attuned to the feelings of others, able to handle disagreements so they do not escalate, and have the ability to get into flow states while working.

Eight Leadership Skills that Matter Most in the Real World

1. Competence  This is the most important leadership quality; it's not enough to have vision and purpose.  Competence has four pieces to it, intellectual, emotional, strategic and instinctive. This characteristic often is not transferable - the news is full of stories of successful CEOs from one industry failing when they try to apply their skills to a new industry.
 
2. Accountability Leading is mostly about the relationship between the leader and the led, and trust, accountability, and the faith others have in you is at the core of this relationship.
 
3. Openness This is a soft skill that can't be quantified, however, openness, candor, frankness, and honesty are bedrock qualities of leadership.  This includes the ability to speak plainly, to listen to new ideas, to tolerate errors on the learning curve, and to build relationships with people at all levels.
 

The Supplier Risk Scorecard

The supplier risk scorecard provides valuable guidance for supply base rationalization decisions and maintaining the health of core suppliers, and is useful to a company that evaluates its dependency on a given supplier, as well as the financial solvency, and innovation investment, customer concentration of its key suppliers.

Rather that evaluating suppliers using aditional supplier evaluation dimensions such as on-time delivery, production yield, and price/ value relationship, which ignore the inherent “riskiness” of the supplier, the scorecard evaluates vendors' financial solvency.

Dependence on suppliers is based on expenditure over time, not just current transactions. Financial viability of suppliers includes considerations of their liquidity, capital structure, and cash flow. Suppliers’ revenue concentration should be monitored to understand suppliers’ dependence on Delta and other large customers.

The Third Law of Performance: Future-based Language Transforms how Situations Seem to People

Future-based language, also called generative language, has the power to create new futures, craft vision, and eliminate the blinders that prevent people from seeing alternative possibilities for the future.  This kind of language doesn't just describe how things occur, it transforms how the they occur. It achieves this by recasting the future in a new mold.

People live for the future that they envision for themselves, not the one they will actually live. This imagined future is a person's default future, and it consists of expectations, fears, hopes, and predictions, all of which are based on our past experiences. But it's future language that shapes historical moments and causes them to become turning points.  Think of Martin Luther King's "I Have a Dream" speech.  What started out as his dream was passed on to his followers, changing the future.

The steps to creating a new future are:

1. Seeing what binds and constrains us, which most often isn't the facts, but our interpretation of the facts. ("Nothing ever improves, management won't change anything.")
2. Articulating our default future and deciding if this is what we really want. ("Things can be both different and better in the future because we can make it so.")
3. Creating a blank space by completing issues from the past. ("Management can see the situation from our side, which means things really will change.")

The Second Law of Performance: How a Situation Appears Arises in language

How situations appear is tied to language, including written and spoken as well a body language. Understanding the complexities of language begins with knowing that whenever somebody says something, other non-verbal communication is carried along with it.  This is a phenomenon known as the unsaid and communicated but without awareness.

Someone who is hiding something will often appear evasive or distant.  The unsaid is the most important part of communication when it comes to elevating performance. Think of coworkers who are all hiding things from each other, and consider how this will impact the performance of the group.

The First Law of Performance: How People Perform Correlates to How Situations Appear to Them

There is no one true reality; we all see the world through our own, sometimes distorting, perceptual filters. There is a significant difference between the objective facts of a situation, and how those facts appear to each of us. Well-informed, intelligent people often have a very different take on a situation because of this difference in perception.

Most people don’t realize that their perceptions differ from those of other people. This is their personal reality illusion. People act and talk as if what they perceive is how things really are. In reality, none of us knows all the facts, and we bring to the table different backgrounds of knowledge, experience, bias and preconceived notions.

Candor - the Biggest Dirty Little Secret in Business

can·dor  (kndr)
n.
Frankness, honesty, or sincerity of expression; openness.

The biggest dirty little secret in business is the lack of candor.  It blocks smart ideas, quick action, and it’s absence as a cultural norm prevents good people from contributing everything they've got. People often don't communicate in a straightforward manner; they don't put forward the kind of ideas that might stimulate real debate. Instead, they withhold comments or criticism, they sugarcoat bad news, and they keep things to themselves in order to maintain appearances. Lack of candor permeates every aspect of business, and yet it is absolutely damaging.

Market Research and Analysis Tools

Factiva is owned by Dow Jones & Company. It is at factiva.com, factiva.ca, factiva.co.uk, and factiva.in. It is a news aggregator of content from both free and fee sources, and provides searching, alerting, sharing, and other services. Over 28,000 sources are available through Factiva, including newswires, newspapers, journals, magazines, television and radio transcripts, websites and Reuters pictures.
Factiva can be searched without a membership, but it’s not possible to drill down. A free, one week trial membership is available.  Membership is $69 per year, plus $2.95 per document or picture viewed. Alerts can be added for $9.95 per month.

Hoover's, Inc. (hoovers.com) is a business research company that provides proprietary business information on U.S. and foreign companies and industries through the Internet, data feeds, wireless devices, and co-branding agreements with other online services. It was founded in 1990, and has had an online presence since 1993. It is a subsidiary of Dun and Bradstreet.
Hoover’s maintains and in-house database of 66 million companies and 85 million people using an editorial staff of industry experts. Subscribers, who pay $75/month support the company, however non-subscribers are able to buy individual company reports for $69, or a single industry report for $129.

Forrester Research is an independent technology and market research company that provides information on how technology impacts business and consumers.  The company was founded in 1983 in Cambridge, Massachusetts by George Forrester Colony, now the CEO and Chairman of the Board.
Forrester maintains an online database of reports and white papers on extremely wide variety of up-to-the minute business topics. Reports can be purchased individually.

Step Five of the Vendor Selection Process: Contract Negotiation Strategies

The purpose of negotiating an agreement is to find a win-win solution that benefits both parties, and sets the stage for a long-term relationship. Negotiating the lowest price possible, especially if it is not sustainable for the vendor is to be avoided.

It's important to establish the following objectives in contract negotiation:

• Terms and conditions 
• Definition of goods/services 
• Compensation including total cost (shipping, taxes, fees, etc.) 
• Financing or payment terms 
• Dates such as contract start and end dates, renewal dates, etc.

Contract Negotiation Strategies

1. Rank your priorities and their alternatives It's not only important to know what your priorities are but also which ones are very important and not flexible, and which ones are lowest in importance and could be "given up" to achieve your top goals.  Higher priority goals should be discussed first.
2. Know the difference between needs and wants Political pressure can elevate "nice to haves" to "must have" status. allowing this to happen
3. Know your BATNA (Best Alternative to a Negotiated Agreement) It's important to know which of your requirements are non-negotiables so that you will know when it is better to walk away from the negotiation table rather than continue. This would also include upper price limits, or the iron-clad necessity for certain 
4. Define any time constraints and/or benchmarks or milestones This includes performance measurement standards such as start, delivery, completion dates or lead times, Associated penalties for non-compliance should also be established.
5. Assess potential liabilities and risks Responsibility and liability need to be established - whose insurance covers the project? Which party is responsible for ensuring government compliance?
6. Clarify confidentiality, non-compete, dispute resolution, and changes in requirements needs This needs to take place before any harm can result.
7. Repeat the above steps from the perspective of your vendor It's important to the relationship that both parties benefit from the contract. Signing a contract with a naive vendor that is damaging to them will be harmful to both parties, and could have a long-lasting negative impact on future contract negotiations with that or other vendors.

Adapted from Contract Negotiation Strategies: Step #5 in The Vendor Selection Process, about.com: http://bit.ly/d4F9Ip

Step Four of the Vendor Selection Process: Proposal Evaluation and Vendor Selection

The main goal of this step is to reach a decision that's in the best interests of the company while minimizing politics and personal preferences that are not based on the facts.

1. Preliminary Review of all Vendor Proposals All proposals should be reviewed for clarity and completeness, and any ambiguities or gaps resolved by the vendor before analysis begins.
 
2. Record Business Requirements and Vendor Requirements The business and vendor requirements of the project should be listed in a spreadsheet.
 
3. Assign Importance Value for Each Requirement Each requirement should be assigned an importance value on a scale of one to ten.  The average of individual team members ratings can be used, or if the team is small, an agreed upon value can be used.
 
4. Assign a Performance Value for Each Requirement This is the equivalent of assigning a grade to vendors for each of the requirements defined in step 2.  Average team members ratings can be used, or the team can agree on a value.  In some cases, vendors will have failed to meet a requirement, and they can be eliminated from consideration.
 
5. Calculate a Total Performance Score This is done by multiplying each Performance Value by the associated Importance Value, and summing these to get the Total Performance Score.
 
6. Select the Winning Vendor The Total Performance Scores should be used as a a starting point for discussion of the top vendors, but not as an absolute decision maker, especially if the top scores are clustered.  Vendors whose scores are very low should be able to be eliminated without much further discussion and analysis. 

Adapted from Proposal Evaluation and Vendor Selection Step #4 in the Vendor Selection Process, about.com: http://bit.ly/atoDH5

Step Three of Vendor Selection: How to write RFPs and RFQs

A Request for Proposal (RFP) is used for services or complex products where the quality, service or final product will be different from each vendor. Negotiation points will depend on these differences.

A request for Quotation (RFQ) is used for commodities, simple services or straightforward parts with little room for differentiation between vendors. Negotiation points will depend on it things beyond the actual product or service such as delivery charges or schedules, packaging, or after-sale support.

The purpose of RFPs and RFQs is to evaluate each vendors ability to meet your company's interests.  They can also be used to leverage the competition between vendors to arrive at the best deal for all stakeholders within your company.  Most importantly, they start building the relationship between your company and the vendor.

RFPs and RFQs should contain the following:

1. Submission Details This should include items such as company address, contact name and deadlines.
2. Introduction and Executive Summary This should include a brief introduction of your company and the requirements of the product or service desired.
3. Business Overview and Background This should include an overview of your company's business, products, and market sector, which will help vendors understand your business needs, and provide background information.
4. Detailed Specifications For an RFP, detailed specifications that are qualitative are needed to drive the vendor selection process.  For an RFQ, quantitative specifications in the form of an explicit set of technical requirements including such things as measurements, minimum tolerances, and quality standards should be included. Other items that should be included include schedules, deliverables and milestones, including penalties and rewards if appropriate.  This list is not exhaustive; it is important not to miss anything.
5. Assumptions and Constraints This includes items such as expenses, upgrade modification allowances, licensing rights among other things.
6. Terms and Conditions These may include financing options delivery penalties, and service levels among other things.
7. Selection Criteria This information may be kept confidential, or it may be shared with prospective vendors to better help them to meet your company's needs.

Adapted from Request for Proposal (RFP) and Request for Quotation (RFQ), Step #3 in the Vendor Selection Process, about.com http://bit.ly/bZ3Brv

Step Two of Vendor Selection: How to Conduct a Vendor Search

1. Compile a list of possible vendors.  You will need to collect contact information in a spreadsheet or database.  Possible sources for your search could include:
• Google
• Business associates
• Registers and directories specific to your industry as well as general ones such as The Thomas Register.

2. Select vendors from which to request information.  Use RFIs to narrow your list.  Depending on project size, RFIs should be sent to 3-12 vendors.
3. Write a Request for Information (RFI). For smaller, straightforward needs these should be short and simple.
• A cover letter introducing your company
• A description of the good or service needed
• A request for company brochures
• A list of vendor criteria including the response deadline
Some examples of questions that would establish vendor criteria:
• Are your employees bonded and insured?
• Can you provide references that we can speak with directly?
• What are the hours of your technical service department?
• What is the turn around time for local orders?
4. Evaluate responses and create a short list of vendors to assess further.  Gather the vendor evaluation team and go through the responses.  Any vendors not meeting any of the "must have" requirements should be eliminated. The final list should have between two and seven vendors, depending on the scope of the project (both duration and dollar amount).

Adapted from Step #2 in the Vendor Selection Process, about.com
http://bit.ly/cCY6Ei

Step One of Vendor Selection: How to Analyze Business Requirements

The first step in choosing a vendor is analyzing your business requirements.

1. Assemble an evaluation team.  This team must include representative stakeholders who will be impacted by the final choice of the vendor for the product, material, or service. Commodity councils, staffed by volunteer employees, are an invaluable method for gathering end-user input.  The size of the evaluation team should range from three to no more than ten participants.
2. Define the product, material, or service. This may be a single line or paragraph from a bill of materials, and it may contain specifications.  It's important to keep "wants" separate from "must haves".
3. Define the technical and business requirements.  Technical requirements can be obtained from the bill of materials or from engineering drawings or manufacturing procedures. Business requirements should include not only required features, but specific minimum quality standards.  The more detail in the requirements, the more likely the outcome will be satisfactory.
4. Define the vendor requirements. It is important to list the criteria the vendor must have.  This can include but is not limited to size, market capitalization, availability of references, domestic origin of raw materials and location.
5. Publish a requirements document for approval.  It is important to aggregate all the information collected in the previous steps,so that members of the evaluation team can provide feedback and ultimately approval.  It can then be sent to senior management for final approval.  This document will become the basis for generating a Request for Proposal (RFP) or Request for Quote (RFQ).

From Analyze Business Requirements Step# 1 The Vendor Selection Process, about.com: http://bit.ly/ad1ZZC

Five Steps to Successful Vendor Selection Successful Vendor Selection

The vendor selection process can be daunting, especially if the goods or services are unfamiliar or technical.  Following these steps will help to ensure a successful outcome.

1. Analyze the organization's business requirements:

• Assemble an evaluation team including end users
• Define the product, material or service
• Define and prioritize the technical and business requirements
• Define the vendor requirements
• Publish a requirements document for approval

2. Perform a vendor search:

• Compile a list of possible vendors
• Select vendors from which to request information
• Write a Request for Information (RFI)
• Evaluate responses and create a "short list" of vendors

3. Prepare Requests for Proposals and Requests for Quotations:

Submission Details:

• Introduction and executive summary
• Business overview
• Background
• Detailed cpecifications
• Assumptions and constraints
• Terms and conditions
• Selection criteria

4. Evaluate the proposals and select a vendor:

• Perform a preliminary review of all vendor proposals
• Record business requirements and vendor requirements
• Assign  an importance value for each requirement
• Calculate a total performance score
• Select the winning vendor

5. Negotiate a contract:

• List rank your priorities along with alternatives
• Know the difference between needs versus wants
• Know your BATNA (best alternative to a negotiated agreement)
• Define any time constraints and benchmarks
• Assess potential liabilities and risks
• Define confidentiality and/or non-compete requirements
• Plan for any future dispute resolution
• Assess all of these from the perspective of the vendor (i.e. walk a mile in their shoes)

Adapted from "The Successful Vendor Selection Process" on about.com: http://bit.ly/c12HI5

A better Approach to Vendor Evaluation

Vendor evaluation is often inadequate. Typically, pricing and systems criteria are given greater weight in the decision versus people and performance management.  In some cases, vendor selection is based on past business relationships rather than a pragmatic evaluation of capabilities. 

The following vendor evaluation protocol provides guidance regarding the key areas to consider in vendor evaluation and a point scale for weighing each component of a vendor’s capabilities. Companies can compare vendors objectively by rating each vendor’s capability in each area and weighting according to the percentages and then adding up the total.

COST MANAGEMENT

10% Pricing Process

15% Price Projections

PERFORMANCE MANAGEMENT

8% Relationship

8% Risk and Compliance

4% Transition and Migration

3% Vendor Suitability

2% Future Service Provision

PEOPLE MANAGEMENT

10% Human Resources Management

10% Cultural Integration

4% Transition and Migration

1% Compliance

SYSTEMS MANAGEMENT

10% Service Management

4% Compliance

4% Disaster Recovery

4% Cost Savings

3% Technical Innovation

Source: Deloitte Consulting: Working Council for Chief Financial Officers research. http://bit.ly/babwO1

How to manage successfully in a multi-generational workforce

There has been eighteen generations in the history of the United States.  A generation lasts approximately 22 years, which is the time frame needed to move from one life phase to the next, such "youth" (0-21)  to "rising" (22-43) or from "midlife" (44-65) to "elder" (66-87)

Currently there are five generations living:

GI born 1901-1924
Silent/Traditionalists/Veterans/Greatest born 1925-1942
Boom born 1943-1960
Generation X born 1961-1981
Generation Y/Echo Generation/Millennials born 1982-2001

Silent/Traditionalists/Veterans/Greatest were born from 1925 to 1942. They were born in a birth rate trough due to the war; both the generation before and the one after were larger. They currently represent only about 5% of the workforce. They are the keepers of tradition, and they annoy action oriented boomers and tech-savvy Gen Xers and Millennials.  The Depression, World War II, and the post-war boom were defining events in their youth.  This generation produced virtually every major figure in the civil rights movement. They:

• Have respect for authority
• Value obedience over individualism
• Are oriented to the past ("In my day...")
• Are loyal and dependable
• Believe in "an honest day's pay for an honest day's work"

You can assist Veteran leaders by:

• Being patient but firm
• Coaching them on their people skills
• Assisting them with technological change
• Providing information in a timely manner
• Respecting and valuing their life and work experience
• Holding everyone accountable for performance and behavior

Baby Boomers were born from 1943 and 1960.  They grew up in largely positive and optimistic times.  The Vietnam War was the defining experience of their youth. Their parents told them they could grow up to be anything that they wanted.  They are driven to succeed and have a live to work philosophy.

In general, Baby Boomers can be characterized by their:

• Passion about participation and spirit in the workplace
• Belief in civil rights, empowerment and diversity
• Belief in growth and expansion
• Pursuit of personal gratification
• Service orientation
• Drive and ambition
• Ability to build and maintain relationships
• Desire to please (family, friends and bosses)
• Lack of interest in all things budget related

As leaders, Baby Boomers prefer a management by consensus style that considers everyone's feelings.  They tend to avoid conflict, such as reprimanding or firing employees.  They prefer to work for organizations whose values align with their own.

You can assist Baby Boomers by helping them to:

• Learn to actively listen
• Develop budgeting skills
• Learn skills for holding people accountable for delivering results
• Stay focused on project goals

Generation X was born between 1961 and 1980.  The advent of AIDS, famine in Africa, and the explosion of the Space Shuttle Challenger were defining moments in their youth. Gen Xers see work as a means to an end, not a life.  They're willing to work hard, but on their own terms.  This makes them appear lazy to their Baby Boomer and Traditionalist bosses.  Gen Xers were the first latchkey kids, and because they learned how to take care of themselves from an early age, they tend to be:

• Edgy and skeptical
• Change masters
• Technology savvy
• Self-reliant and unimpressed by authority, they do not like to be micromanaged
• Private/keep their own counsel
• Have a non-traditional sense of time
• Are non-conformists

They tend to be fair, straightforward leaders, and they like to"tell it like it is". This brutal honesty is not always productive.  Gen Xers can be helped by:

• Helping them to focus on building relationships
• Teaching them soft skills (e.g., coaching and counseling) that compliment their technical and operational skills
• Assisting them in developing people-oriented communication skills
• Explaining the “why” behind policies and procedures
• Being frank and honest in your communications with them (i.e., say what you mean)

Generation Y, also known as the Echo Generation or the Millennials, are the children of Baby Boomer parents who worked hard to give their children structured, interesting and safe lives.  There were swimming lessons, dance lessons and camps.  As a result, they tend to have great relationships with their parents, and view them almost as friends.  Gen Yers are very technologically savvy and global.  They grew up in booming times with little strife, and they tend to be:

• Hopeful and optimistic
• Coddled and nurtured
• Educated
• Technologically savvy – even more so than Gen X
• Respectful of their parents
• Resistant to categorization by race, religion, sexual orientation
• Non-traditional
• Multi-taskers and easily bored
• Global

Managers find Gen Yers to be hard to manage, especially compared to Gen Xers who are self-starters and do not need micro-managing.  Gen Yers need specific direction with follow-up.  Training needs to be structured and interactive in style.  The best way to manage Gen Yers is to:

• Explain the “why”
• Involve them, ask their opinion
• Treat them and others with respect
• Make time for orienting them
• Provide supervision and structure
• Use a team concept
• Offer more and quality training
• Offer mentoring
• Recognize and reward

This generation began to enter the work force about ten years ago, with the oldest about to turn 30, while the youngest are still in middle school.  Early indications are that they will have a consensual people-focused management style, like their boomer parents.

Managing a multi-generational workforce can be rewarding if leaders learn to tap into the varied talents of each generation and the individuals within it. Learning to do this well will reap rewards in the future.  In another ten or so years the generation following the Millennials will begin entering the workforce - Generation Z(?)  Born 2002-1924, it remains to be seen what will define them in their youth and what they will be like as our newest and youngest co-workers in the future.

Adapted from How to Lead and Survive in Our Multi-Generational Workforce by Debbie Zmorenski http://bit.ly/9nTIgo

and

Strauss, William and Neil Howe. Generations: The History of America's Future 1584 to 2069. New York: William Morrow. 1991.

Eight Leadership Skills for succeeding in the 21st Century

1. Embrace change.  
2. Know your purpose in life and the values that support it.
3. Expect the best while preparing for the worst.
4. Act decisively.
5. Learn from every experience.
6. Laugh often and enjoy the journey.
7. Celebrate the small victories.
8. Help others to succeed.

Based on a white paper by Mark Sanborn: http://bit.ly/a9OGhF

Project Risk Management

Risk Management Plan

There are four stages to risk management planning:

1. Risk Identification
2. Risk Quantification
3. Risk Response
4. Risk Monitoring and Control

Risk Identification

There are different kinds of risk:

• business risks
• generic risks

Risks need to be identified and defined: what are their causes and will be their impact?

Risk quantification

Risks need to be quantified in two dimensions: impact and probability.  Prioritization of risks can be done using a matrix that combines probability and impact.

Risk response

There are four things that can be done in response to risk: 

1. Avoid
2. Transfer
3. Mitigate
4. Accept

A risk response plan should include a strategy and action items.  This means a who, what, when, where, why plan needs to be developed.

Risk control

It's important to continually monitor the status of risks so that it will be known if they have turned into a problem.  It's also important to keep track of the effectiveness of risk mitigation steps, and to follow risks so that it is known when they have passed and no longer represent danger.

From a White Paper by Project Perfect: http://bit.ly/cNOHvb

The "Harder" Side of Change

Managing the people side of a change is sometimes referred to as the "soft" side, while the technical aspects is the "hard" side. But despite this terminology, managing the people along with their hopes, fears, beliefs and misconceptions is actually the most difficult; it is often neglected, and frequently is the source of the failure of a project.

The financial success of change is most dependent on how individuals embrace the change, and adopt and utilize it in their day-to-day work. It's both a learned process and a new competency. It's about changing individual employee behaviors, and modifying the holistic tool set used to get the job done.

Organizational change happens one person at a time, but it is the cumulative effect of these individual efforts that results in successful organizational change. Poorly managed change will result in productivity declines, lowered employee morale, missed deadlines and budget overruns. In many cases, projects are abandoned as failures when progress is slow and milestones are missed.

The likelihood of success increases when effective change management strategies are utilized. Benchmarking studies conducted in 2007 and 2009 showed that 95% of participants with effective change management programs met or exceeded objectives compared to 16% of participants with poor change management strategies. A 2002 McKinsey Quarterly article found that projects with excellent change management approaches delivered 143% of their expected ROI, while those with poor change management methods delivered only 35% of expected ROI.

Regardless of the nature of the change, focusing on the people involved, especially front-line management and line employees increases the likelihood of being successful, and of staying both on schedule and under budget.

Individuals need the following six things in order to succeed at change:

• An awareness of a need for change
• The desire to participate in and support the change
• The knowledge of how to go about accomplishing the change
• The ability to implement the required skills
• Continuing reinforcement from management to sustain the change
• An organizational cultural shift that supports the change

Lacking any of these, employees will not be able to make and sustain the needed changes.

The people side of change management is not the soft side of change, it is the "harder" side. Investing time and energy to manage the people side of an organizational effort will pay off in terms of success of the effort, as well as the avoidance of the many costs that plague badly managed change. Getting people on board and participating is the most important aspect of change management.

Adapted from the Change Management Learning Center, The "harder" side of change

The What, Why and How of change management: http://bit.ly/caqtx1