Surviving and thriving in the first 90 days - the poka-yoke of hiring leaders
Our bumper car ride through the fascinating topics in the supply chain, operations, and procurement, brings us back to the most important topic of all: People, and to be more specific: People who lead.
Today’s reality for most new leadership hires
Here is what many learn to be true when it comes to new jobs:
Your new boss has to have your back.
You have to figure out by yourself how the job works
Point 1 seems to be a bit of a no-brainer since you would not be there if your boss had not selected you. Still, there can be situations where the new boss is not the one picking you or is forced to choose you. Unless you have a clear commitment from the boss’ superiors that this is a temporary situation (meaning, the boss will be gone soon), turn around and run as far as possible for the hills. The same applies if you and your boss do not get along. Do not fight it (unless you are bullied - involve HR): either resign or transfer to a new department.
Point 2 is the reason for this blog post: it does not have to be like this. You might say: You get hired to make a difference, and they hired you to be that difference. And you are right. But why does it have to depend only on the individual rather than a process that helps you pivot?
Let’s look at it from a company perspective first. We use the example of hiring a new Chief Procurement Officer (CPO). I know from many of my peers in sales, marketing, manufacturing, HR, and service that the description of the status quo and the remedies we proposed are comparable. Interestingly, Finance is often different from the rest: it has its own hiring, onboarding, and continuous learning process.
The job
In most manufacturing companies, externally bought materials and services account for the largest portion of the Cost of Sales (CoS), the largest cost block of all companies. For those unfamiliar with accounting, the Cost of Sales includes personnel costs. So you can figure out what it takes to reduce CoS most effectively (and raise margins): Letting brilliant people go to reduce personnel cost, or getting brilliant people to manage your procurement…
In other words, you can reduce external costs or let people go if times get tough. In good or normal times, low material costs give you higher margins, which means higher stock prices, better bank interest rates, etc.
These people in CPO jobs are a bit of a Jack/Jacqueline-of-all-trades in the corporate setting:
They need to be knowledgeable in many markets (up to 500 (!) distinctly different supply market categories).
They need a service mindset to provide their internal colleagues with what they need, with less hassle, more cost-effectiveness, safety, and compliance with regulatory requirements while ensuring that the suppliers are excellent wherever they are located. If you wonder why your company doesn’t work like this…well, this is my point: have the right leaders pivot…
They need to be empathic leaders, both for their employees and the suppliers: everyone should know that the company roots for them - displayed by the CPO and his complete organisation. Demanding, but fair!
If a new CPO comes on board, s(he) will have to understand quickly the company, all its decision makers (similar to finance, procurement interfacing with the whole company), the own shop (both those report to the procurement organization, and all the shadow buyer in the rest of the organization), and finally, let’s not forget: the suppliers.
While this avalanche of people and entities should be engaged, the CPOs have to drive better performance in the year they are hired.
The external hires fallacy
Without any big internal guidance and support (rule 2) from the outside, most new CPOs stick to their guns and apply the tools that worked before, whether or not this is the right solution. No time is wasted matching the new situation with the right strategy, and no one to tell them...you know, the hammer, tool box, and nail thing.
The internal has an advantage, but…
People promoted internally are better off: They already know the current setup, suppliers and corporate leaders. Now, they need to quickly understand the wider responsibilities, find the current setup's blind spots, and establish themselves as leaders with their former peers.
Mission Impossible
Let’s face it: Most CPOs are charged with a “Mission Impossible”. Many of them deliver…but not in the first two years. And if they do, it is often a straw fire. And when the performance drops again in year three or four, they move on - replaced by the next Ethan (or Ester) Hunt.
Now, is this how it has to be? Do new, good people need to struggle like this? Do companies wait for years to get the returns of the hires they made, if at all?
We believe new hires need constant attention for the first year after the contract is signed, all compliance videos are watched, and questionnaires are answered. In other words, onboarding AND hiring. It is like planting a tree: They are bought, put into the ground, and then watered for a long time to ensure they grow roots. Only then do they produce leaves and give shade or carry fruits.
Here are some of the steps that I have seen working. I call them: the poka-yoke of hiring.
Poka-Yoke of hiring
Poka-Yoke (“poka” stands for carelessness/unfortunate errors and “yoke” means “prevention” in Japanese) is part of lean methodology: If you know what’s causing an error, you can take preventative action using technical or process fixtures, coloured markings or checklists. Shigeo Shingō (1909-1990) co-founded the Toyota Management System and is mostly known as the man who invented Poka-Yoke. He coined the phrase: “Quality is not checked, it is produced”.
In the context of the hiring process, this means designing a process that always produces excellent results by eliminating errors.
Notes for a company to have thriving new hires
So, let’s start with the top three poka-yoke actions a company can take when hiring a new functional leader, in our example, the CPO:
Establish with the new hire a 90-day onboarding plan that covers people, processes, and technology: Whom to meet, when and what methods and systems to get to know. However, just giving the hire the excellent book by Michael Watkins “The First 90 Days” is not getting you there: It requires a detailed process with checklists and input from the peers, boss(es), and direct reports of the new position owner. Finally, file the finalized list (with improvement suggestions from the onboarded person after the process) under the position profile - to re-use the next time.
Provide the new hire with his/her personal internal culture mentor: fellow peers who take the new hire under their wings to help them navigate the new landscape and avoid rookie mistakes. (For internal promotions, consider an external functional coach to stretch the person's imagination, which has been imprinted only with the current corporate culture and blind spots.)
In the first 90 days, the boss(es) and the new hire should have bi-weekly check-ups, with the sole purpose of helping the new hire get up to speed—call it watering the newly planted tree to ensure it grows the needed roots quickly.
Notes for you to survive & thrive the first 90 days
What are the three things the new hire should consider (while taking good notes)? In short, it is People, People, People:
Meet as quickly as possible as many internal customers as possible. Procurement is an interface function. It translates what the internal customers, the regulators have defined to the supply base better as if the two parties would do it themselves. This, however, requires understanding and being trusted internally: When setting up the meetings, the new hires need to restrain themselves from talking too much about their former career & life and rather ask: How can I support/serve you best? What are your biggest pain points? What would you like to have strengthened?
Sit with as many people from the procurement organization as possible, from leadership to individual contributors. Best in one-to-one meetings, to give them a chance to vent: Ask the same questions repeatedly: What works well? What would be even better if…?
Go out to the suppliers and meet their executives and the people in their supply chain, from sales to design, production, shipping, and warehousing. Do not sit in meeting rooms. Meet while walking (MBWA: management by walking around, originated by HP's David Packard in the 1940s and popularized by self-declared management guru Tom Peters). Most suppliers are proud to show their operations. For those that don’t, find new ones.
There is so much more to consider, but with these three steps from each side, the poka-yoke of the process is at a good level. And for those who believe that these three topics are already done by every functional new hire today—trust me, they are not.
Tip for the “trees with roots”: Do not just listen to the ‘HIPPO’ (Highest Individual Paid Personal Opinion). Meet more people:
Include people in operations, finance, sales, R&D, legal, tax, sustainability, and M&A—the whole set-up. Not just the leaders, but the ones who have to work with your systems, processes, and personnel.
Meet brilliant academics. This is the biggest blind spot in all business settings. Academics run analytics on hundreds or thousands of companies and distil their lessons with the highest level of neutrality (at least most). Read peer-reviewed articles on your subject and meet the people behind them. Yes - they will talk differently than you and often have different ambitions. But man, they can boost your fact based knowledge 100x times. This can be your super power…
Checking the state of affairs in your company - 10 questions
As always, in this blog, we give you an opportunity to check where you are on the spectrum of ensuring the success of your leadership hires. How many of the below questions can you answer with a resounding, fact-based "yes"?
Do you have a clear onboarding plan/checklist by leadership position detailing places to visit and people to meet?
Were you satisfied with the organisation's performance under the former job holder? Do you have objective metrics to come to this opinion?
Do you know what best-in-class performance is for the function you are hiring for in your industry?
Is the function you hire for a respected, integral part of your company? If not, do you know why? Do you agree with this assessment?
Do you select top functional candidates based on their deep functional expertise?
Do several management board members interview the person?
Do your new hires receive an internal coach assigned to help them assimilate to the culture (or an external functional coach if they are internally promoted)?
Do you agree that a functional leader can come from other than your industry/company?
Is the new functional head part of the Senior Leadership Team (direct report to the management board or a management board member)?
Is the design of the function in line with the rest of your organizational setup?
Did your last hire have at least 5 years of tenure on the job before moving on?
If you answered „yes“ to most questions, great: you have your functional leadership hiring under control. Congratulations - well done! Do not read any further and focus on other topics.
Size of the prize
However, if you either do not know or answered several questions with a "no," you have an opportunity to get much more out of your leadership.
To understand the „size of the prize“ of, again, our CPO hire, please consider a less orthodox view of the supply base you have:
Your supply base has 10-100 times more people working to produce sub-components and services for you. What if all those people would be truely interested in your company's success?
Your R&D budget is dwarfed by the R&D spend of all your suppliers. What if your suppliers focused their research on you?
Most suppliers use mixed price calculations—the basics for any sales process. What if your suppliers want to keep you as a preferred customer and keep your prices low?
A CPO is central to building these relationships between your firm and your extended enterprise (= your supply base), which should be demanding, fair and prosperous relationship for both sides. As much as an outstanding Head of Sales can move mountains for your revenue, so can a great CPO accelerate your business to new levels in your triple bottom line. The CPO makes the difference whether you have an extended workbench in your supply base or a vibrant innovation community that supports your company and cheers you from success to success.
Conclusion
Ending with the gardening metaphor: If you select a new tree for your garden, ensure that it is watered after it is put in place. Then, it grows its roots to become strong and provide you with the harvest you expect.
Stay safe and…water your ‘trees’.
Daniel
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