Secret Formulas of Implementation Success

As someone who’s been doing project work for decades, I must admit, it’s always cool and rewarding when you implement something. Shipping your work and having it exposed to reality instead of theory is the essence of innovation – taking an idea, or a design, and making it real.

But implementation work is hard, especially for a business process like Flowcasting since it touches, interacts and changes a large part of a retail business and extended eco-system.

I’ve been very lucky over my career to have either led, or co-led, three successful implementations in retail of Flowcasting or major elements of the concept. As an implementer at heart, over the years, what’s emerged are some mechanisms I’ve used that I believe are instrumental in success.

What I’d call my secret formulas.

For a key one, we’ll turn the clocks back to the mid-to-late 1990s. At the time I was the leader of a team for a national, Canadian hardgoods retailer, who’s mandate was to design and implement new processes and supporting technology to improve the planning and flow of inventory from supplier to store shelf.

The team had essentially designed what we now call Flowcasting and had selected technology to support the process. While we all understood that planning from the store level back was technically infeasible, we decided to forecast DC-level demand, and calculate and share forward looking supply projections with our merchandise vendors – in the process instilling the concept of supplier scheduling in retail. I won’t bore you with the details, but the project was quite successful and helped cement some of the principles of Flowcasting in retail, including supplier scheduling and working to a single set of numbers.

For a project of this size, like most larger scale transformations, we had a cross-functional governance team established – essentially like a steering committee – that would help guide the project and provide advice and suggestions to the implementation team. And to be honest, they did a good job.

However, inevitably, when a group of that size and functional diversity is tasked with guiding and asking questions of the leader (in this case me), there are bound to be some dumb asks and even dumber suggestions.

That was the input for me to develop my “Rule of 3”, which I/we used successfully on this implementation, and I’ve used ever since.

It works like this. If the ask/suggestion from the steering committee or large governance group sounded mental to me, I’d note it down and tell everyone I’d think about it. Then, I’d go back to the team and see what they thought. If they agreed it was mental, I’d ignore the ask/suggestion. And I’d continue to ignore it until the group had asked a third time – at which time I/we’d develop a response.

The beautiful thing about this approach is that seldom does the request ever get asked again, let alone a third time. It’s forgotten and therefore requires no cycles of thought or response from me and the team. I’m not exactly sure why but my thinking is that in larger groups people tend to like to hear themselves talk – they want to make suggestions/contributions, so they can’t help themselves and sometimes make a dumb suggestion or ask. Then, by the time the next session comes around, they completely forget about their initial request.

As an example, when I was working with our Winnipeg-based retail client designing and ultimately implementing Flowcasting, me and the team leader had to regularly present to a large cross functional group about Flowcasting – how it would work, the benefits, the implementation approach, etc.

I remember at one large, cross-project session a participant asking something like “How will the new process factor in social media sentiment into the demand planning process, to potentially revise the forecast of that item and others?” My response was, “Not sure yet, but we’ll think about it”.

I remember the team leader asking me after, “what are we going to do?”. My answer was simple: “Nothing. We’re going to ignore that and see if it’s ever asked again”. It wasn’t and the rest is history.

Now, not to brag or anything, but this client was able to improve daily in-stock from about 92% to 98%, while reducing both DC and store inventories, all while completely ignoring social media sentiment (whatever that is). Thanks to the Rule of 3.

Now, don’t get me wrong. I’m not saying that most of the suggestions from steering committees and cross functional groups are/were dumb – they’re not. I’m saying that a certain percentage will be and you, as an implementer, need a mechanism to ignore them and/or say “No” nicely, so you can stay focused on what matters.

For me, it’s The Rule of 3. It has been a loyal friend to me, over many years and implementations, and I hope you can use it – or something like it – as well.

It’s one of my secret formulas of implementation success.

Repetito est mater studiorum

“Repetition is the mother of learning, the father of action, which makes it the architect of accomplishment.” – Zig Ziglar

When I was growing up, I was a very competitive dude, particularly in sports. When it came to sports, for me, winning was everything. Basically, I was an asshole. Many of my friends and foes called me by a different name. What’s the name they used? Oh yeah, a cunt. It’s OK, it was the truth and they often called me that to my face.

Here’s a story, from high school, that helps confirm my then status. 

In the basement of our school, down near the gym, there was a ping pong table. And, during lunch and breaks, students would play. The rule was simple: the winner stays on the table, until someone beats them, and then they take over. So, a very good player could play for quite a while.

One day, me and my pals sauntered down and watched as a girl named Dana beat all comers. Then, at the insistence of my mates, it was my turn to challenge her. She crushed me. My buddies, of course, knowing how competitive I was, absolutely shamed me that day and for many weeks after.

So, what did I do?

I did what any red-blooded, super competitive dude would do. I bought my own racket and a ping pong table.  I was determined to win.

Ping pong tables fold in the middle where the net is so that, when folded, the other side of the table is upright. It allows a single player to hit the ball, over the net, against the other side of the table and it pretty much guarantees that the ball will be returned. So, I set up the folded table in my parents’ basement and, every chance I got, would go down and pound balls against the returning wall.

Over and over. Harder and faster. Learning how to put overspin on both a forehand and backhand. Learning how to smash and return a smash. Repetition after repetition – for hours and days on end.  

I would soon get to challenge Dana again. And, with my buddies watching, I would demolish her and would become not only the ping pong champion of my school, but also the best high school player in the county.

The moral of this true story isn’t to confirm that I was an asshole. The moral of the story is highlighting the importance of repetition.

There’s an old Latin saying, “repetito est mater studiorum” which means repetition is the mother of learning.

When it comes to instilling new ways of working, turns out repetition really is the mother of learning.

Implementing a new planning approach like Flowcasting in retail benefits greatly from repetition. You’re essentially teaching the planners and the wider organization (including suppliers) how to think differently about integrated demand and supply planning, so the more often people are exposed to the idea, the better. 

I recently read a great book about change called The Human Element.  In it they outline one of the most important strategies for instilling change is to “Acclimate the Idea” through repetition and repeated exposure (i.e., give people time to think and internalize the idea/change)

In a recent implementation of Flowcasting, the idea of repetition was leveraged extensively to help people make the change journey, including:

  • An ongoing education program which started with a cascade from the CEO and delivered repeated educational sessions to help people internalize the change in thinking and underlying principles of the new process
  • Process prototypes where the Buying Teams (Merch and Supply Chain) would execute a day in the life scenario, with company-specific data for every major planning scenario – like product life cycle, promotions planning, seasonal planning, etc.
  • A supplier education & training program to teach suppliers and the Buying Teams the new approach to collaboration
  • Training sessions to demonstrate how people would execute the new ways of working
  • Coaching sessions and ongoing coaching with job aides to help people transition from the old to the new

What do all these activities do? 

They constantly repeat and demonstrate to people the underlying change and principles of the new process. As an example, in each of the process prototypes, the Buying Teams could see what was meant by a valid simulation of reality, what the supplier would see in their supplier schedules, why postponing creating a purchase order for promotional volume was better for everyone, plus many other learnings. Repetition, with real scenarios, helped them instill new thinking and helped acclimate the ideas.

Getting good at anything (Flowcasting or ping pong) requires learning.  And learning needs repetition.

After all, she really is the mother of learning.

The Legends

Honor lies in honest toil. – Grover Cleveland

Moving a retailer from a firefighting mindset to a planning mindset is no small task and requires a lot of emphasis on education, change and butchering sacred cows.

It also invariably requires a technology investment in a new planning system. In theory, the technology piece of this is pretty straightforward, particularly if you choose off-the-shelf planning software that adheres to a few key fundamental principles and meets your core requirements. You bolt it on top of your ERP, master data flows in and you run the batch. Then forecasts, plans and orders flow out. Easy peasy.

To make all of this work, you need a dedicated team that includes:

  • A mixture of folks from the business who can drive change – grizzled veterans with a lot of credibility across the functional areas (especially Merchandising, Supply Chain and Store Operations) combined with some whiz kids who may be a bit wet behind the ears, but are eager to learn. Their job will be to design new processes, change existing processes within the business and be the “tip of the spear” for driving the change, both internally and with suppliers. You can optionally augment this team with consultants who specialize in this space and bring experience from prior projects.
  • A technical team who can understand the mission, develop data maps, built and test the integrations, design the batch schedules and course correct when things don’t work out exactly as planned. This team can optionally be supported by the software company and/or system integrators to do some of the heavy lifting on many of those tasks.
  • An implementation team from the software provider who can work with the business folks to train your team on the new system and aid with configuration, data mapping/structure and workflow design.

That sounds like a dream team, doesn’t it? But is it enough?

Not quite.

Remember earlier when I said that the technology piece of the puzzle is “easy peasy”? Well, that’s only a relative description when compared to the change effort. In absolute terms – and from bitter experience – the technology stuff is often NOT “easy peasy”. At all.

This is why you always need one more person to augment your dream team: The Legend.

Every retailer has at least one of them, but usually no more than a handful. It’s the person whose name always comes up when these types of questions are asked:

  • Where the hell are we supposed to find that data and who manages it?
  • I can see the number on the screen, but how the hell was it calculated?
  • Why the hell did we decide to set things up this way?

These people often (but not always) have grey hair, are closer to the bottom of the org structure than the top and generally toil away in anonymous obscurity until a really big problem needs to be solved – then they’re the ones called upon to solve it. Losing one of these people would be more risky and disruptive to the organization than if the CEO was taken away in handcuffs for insider trading.

The Legend could have virtually any job title in any functional area of the organization, but the actual job description can be summed up in one word: Everything.

The Legend is a critical resource for any initiative that requires master data or touches legacy systems in any way. So, basically all of them.

They know where all of the bodies are buried and often need to throw some cold water on project teams who may have the notion that things are “easy peasy”. They don’t do that to block the path or to be a buzzkill. They just don’t want people wasting their time or making unrealistic assumptions that will foul things up. Don’t worry, they’ll eagerly help you to steer clear of the rocks, because they know where all of the rocks are.

But getting their time to help will be difficult, because they are always being pulled in ten different directions, not to mention tasked with keeping the lights on when more mundane day-to-day issues arise.

They are the critical resources that must contribute to any major transformation, but they are also the people that the business can’t afford to lose to a long term project.

In spite of all the power they wield, they are generally not protective of their knowledge or interested in defending turf. If a promotion offer came along, they may seriously consider it, but they probably won’t be actively seeking one out.

They’d be glad to write up detailed documentation and/or transfer some of their expertise. Maybe you can get some time on their calendar to get that going – there’s probably a 1/2 hour block available 4 months from now.

For ethical and technological reasons, cloning is not really an option right now, so how do you get valuable time from people who have none?

  • In the interest of long term success and stability, put some of your initiatives on hold and free up some of their time to cross train some junior folks on the more mundane tasks.
  • Bring in some contractors to backfill some of their “lights on” work and produce documentation while they work on more important matters.
  • Recognize their value and set aside an important role for them when you get to the other side of your change endeavour.

And it never hurts to give them a hug every now and then.

Subtract

“Life can be improved by adding, or by subtracting. The world pushes us to add because that benefits them. But the secret is to focus on subtracting.”

                    - Derek Sivers

People don’t subtract.

Our minds add before even considering taking away.

Don’t believe me?

Leidy Klotz is a Behavioral Science Professor at the University of Virginia and a student of “less”. He conducted a series of experiments that demonstrate people think “more” instead of “less”.

Consider the following diagram and the ask.

Thousands of participants were asked to make the patterns on the left and right side of the dark middle vertical line match each other, with the least number of changes.

There are two best answers. One is to add four shaded blocks on the left and the other is to subtract four shaded blocks on the right.

Only about 15 percent of participants chose to subtract.

Intrigued, Professor Klotz and his research assistants concocted numerous additional experiments to test whether people would add or subtract. They all produced the same result and conclusion – people are addicted to and inclined to add. It wasn’t close.

Big fucking deal, right?

Not so fast. Unfortunately, adding almost always makes things more complicated, polluted, and worse. You’d be better off subtracting.

A great example in supply chain is demand planning.

Demand planning, according to many, is becoming the poster child of adding. Let’s factor in more variables to produce an even more beautiful and voluptuous forecast. Are you sure you all these additional variables will improve the demand plan?

I doubt it.

First, many companies are forecasting what should be calculated. It’s been proven that the farther away from end consumption you’re trying to forecast, the more variables you’ll try to add. And the resulting forecast usually gets worse the more you add – since you’re often adding noise.

We have a retail client that is forecasting consumer demand at the item/store level only and calculating all inventory flows from store to supplier – what we call Flowcasting. Their demand planning process only considers two variables to calculate the baseline forecast:
• the sales history in units
• an indication if the sales was influenced by something abnormal (e.g., like promotions, clearance, out of stock, etc.)

All “other” variables that the “experts” say should be included have been subtracted.

Yet their planning process consistently delivers industry leading daily in-stocks and inventory flows to the store shelf.

The idea is simple, profound, and extremely difficult for us all. For process and solution designs, and pretty much everything, you need to remove what’s unnecessary.

You need to subtract.

Soak Time

“If a plant gets nothing but sunlight, it’s very harmful. It must have darkness too.” – Robert Pirsig

Did you know that if a plant gets nothing but sunlight, it’s extremely harmful and even deadly? It must have darkness as well. In the sun, it converts carbon dioxide to oxygen, but in the dark, it takes some oxygen and converts it back into carbon dioxide.

People, as it turns out, are the same. We need periods of darkness – essentially doing nothing – to develop ideas and/or internalize new ones. We often refer to it as “soak time” – the time where you let your mind just soak stuff in, subconsciously thinking about things. This, inevitably, helps your understanding and allows your creative juices to work.

Turns out many creative folks embrace the concept of soak time.

The film director Quentin Tarantino outlines his creative process and the role of soak time. This is his approach. He basically writes during the daytime. Then after a while, he stops writing. Now comes the key part of his process, he says. “I have a pool, and I keep it heated. And I jump in my pool and just float around in the water…and then, boom, a lot of shit will come to me. Literally, a ton of ideas. Then I get out of the pool and make notes on that. But not do it. That will be tomorrow’s work. Or the day after. Or the day after that.” Another filmmaker, Darren Aronofsky, said, “procrastination is a critical part of the process. Your brain needs a break…so that even when you’re not working, you’re working. Your brain is putting shit together.”

In his excellent book, Deep Work, Cal Newport teaches the benefits of downtime. One study by Dutch psychologist Ap Dijksterhuis showed that when working on a complex problem or decision, you should let your unconscious mind work on it as much as possible. Anders Ericsson wrote a seminal paper, “The Role of Deliberate Practice in the Acquisition of Expert Performance,” which showed that our brains have a limited window for cognitively demanding efforts. “Decades of study from multiple fields within psychology,” Newport writes, “all conclude that regularly resting your brain improves the quality of your work.”

For us, soak time is a core component of our approach to help people change and embrace new technologies and ideas like Flowcasting. It’s why we start the education process very early – so people have time to soak in the new thinking, ponder it and slowly accept it (hopefully).

Designing new processes and work methods also benefits from regular and ongoing doses of soak time. Instead of plowing through a design phase, grinding your way through session after session, a far better approach is to work on some aspect of the design, then let it sit, or go dark for a while. Subconsciously though, that beautiful brain of yours can’t turn off the tap – and will be thinking and pondering even when you’ve gone dark on that topic. The result? Better designs and solutions, guaranteed.

When I consult with retail clients, I’m aghast at how little soak time is built into people’s calendars, especially for folks that work in Home Office or Support Centres. Everybody seems to be busy doing busywork, and there’s barely time to schedule a 30-minute session, let alone have some soak time. The organization would be far better off by scheduling 20-50% of slack time for all these folks – essentially blocking off time for them to daydream, read, walk, or just do nothing at all. Let the mind wander and subconsciously connect things.

In both my Canadian and UK home offices I have a couch. When I need to let things soak, I sometimes go for a walk, or most of the time, I just lay down and do nothing. Just rest and relax and let the mind soak for a while. I do it often, almost every day and for some period.

Does it help? Yes, I think it does. Sure, over time, most of my ideas have been shit, but the odd decent one slips through. I’m convinced it’s because of nurturing it with soak time.

If you’re delivering projects or have a job that requires you to develop new ideas and initiatives, then my advice is simple: plan and schedule lots of soak time.

Maybe also get a couch so when you need to, you can just lie down and relax, breath slowly and let your mind wander and connect stuff, all while converting oxygen to carbon dioxide.

Sorta like a plant does.

Stoplights and Roundabouts

Stoplight-roundabout

As someone who’s been doing project work for a long time, anytime I read something that makes me ponder, I take note.

Consider stop lights and roundabouts.

Stop lights are the dominant way that we use to manage intersections and flows of traffic for two roads that cross.  Have you ever thought about the assumptions behind this approach?

  1. People can’t make decisions on their own approaching an intersection and need to be told what to do
  2. The intersections must be managed with complex rules and technology with cables, lights, switches and a control center
  3. A plan and logic must be determined for every scenario, thus requiring a solution with multi-colored signals, arrows, etc

Now, think about roundabouts.  In a roundabout, cars enter and exit a shared circle that connects travel in all four directions.  The assumptions for this method are significantly different:

  1. People make their own decisions on entry and exit and trust one another to use good judgment
  2. The intersections are managed with simple rules and agreements: give the right of way to cars already in the circle and go with the flow
  3. Lots of scenarios happen, but co-ordination and common sense will be good enough to handle them

How about the performance of each approach?  Ironically, the roundabout outperforms the more complicated and sophisticated system on the three key performance metrics:

  1. They have 75% less collisions and 90% less fatal collisions;
  2. They reduce delays by 89%; and
  3. They are between $5,000 and $10,000 less costly to operate/maintain each year (and, of course, function as normal during power outages)

There’s some pretty profound insights and learning’s from this comparison.  Obviously, if you’re involved in designing and implementing new thinking and technology, keep it as simple as possible and don’t try to automate every decision.

The other key insight from this example is actually more profound and speaks to the nature of work, innovation and teams.

I’ve been very fortunate to have led two fairly important projects with respect to retail Flowcasting.  This dichotomy between stoplights and roundabouts highlighted why we were successful and paints a picture for how projects, and indeed work, could be organized better.

About 25 years ago I was the leader of a team at a large, national Canadian retailer whose mandate was to design a better way to plan the flow of inventory from supplier to store.  We would eventually design what we now call Flowcasting and would implement retail DRP and supplier scheduling for the entire company, including all suppliers – a first in complete integration from retailer to supplier.

As luck would have it, our team would eventually report up to a Director, who was, like the team, a bit of a maverick.  Let’s call him Geoff.

What Geoff did that was brilliant – and consistent with the roundabout philosophy – was to give me and the team almost complete decision making authority.  I remember him telling me, “This team knows what they’re doing and the design is solid.  My job is to clear trail for you, shelter you from unnecessary bureaucracy and make sure you can deliver”.

And he did.  The team had virtually the entire say in all decisions that affected the design and implementation.  That’s not to say we didn’t communicate with Senior Management and give updates and ask for opinions – we did, it’s just we felt like we were given ultimate say.  It was exhilarating and, as it turns out, a model for project work.

Fast forward 20 years and I’m a consultant on another Flowcasting project – this time for a mid-sized national hardgoods Canadian retailer.

In another stroke of good fortune, the business sponsor for the team inherently had a similar view about work and how projects delivered.  Let’s name him Ken.

Ken’s operating style also gave the team the latitude to make the key decisions regarding design and implementation – of course he kept abreast of things and contributed his input and advice but ultimately we were in charge.  His role, he said, was to educate and help the Senior people make the journey.

As an example, I remember Ken telling me before our first steering committee meeting, words to the effect…”We’re not going in looking for approval.  We know what we’re doing and why.  These sessions are about educating and informing the group, and every now and then asking for their opinions and advice”.

It was how the entire project operated.

In one example that demonstrated the team’s authority, I remember one of the analyst’s on the team helping Ken change his thinking on our implementation approach.  It was a great example of the team working with psychological safety and proof positive that ideas were more important than hierarchy.

I’ve been doing a lot of reading lately on the future of work and how companies can innovate.  And what I’m seeing is that a model for work (day to day, and also project work) is starting to emerge.

It’s based on the principle of turning people into self-organized, self-managing teams and giving them the space, freedom and authority to work and innovate – treating them like small, micro-enterprises.

Principles I’ve been fortunate enough to have experienced in two of the most successful and rewarding projects I’ve been involved with.

You can manage, innovate and drive change using the operating principles of the stoplight or the roundabout.

Choose wisely.

Unvarnished

It’s an altercation that’s stuck with me for decades.

Roughly twenty years ago I was leading a retail team that would eventually design what we now call Flowcasting. We were an eclectic team, full of passion and dedicated to designing and implementing something new, and much better.

After a particularly explosive team session – that saw tensions and ideas run hot – everyone went back to their workstations to let sleeping dogs lie. One business team member, who’d really gotten into it with one of the IT associates, could not contain his passion. He promptly walked over to the team member’s cubicle and said…

“Oh, one more thing…F**k You!!”

Like most of the team, I was a little startled. I went over and talked to the team member and we had a good chat about how inappropriate his actions were. Luckily the IT team member was one cool dude and he didn’t take offence to it – the event just rolled off his back. To his credit, the next day my team member formally apologized and all was forgiven.

Now, please don’t think I’m condoning this type of action. I’m not. However, as a student of business, change and innovation I’ve been actively learning and trying to understand what really seeds innovation and, in particular, what types of people seem to be able to make change happen.

And, during my research and studies, I keep coming back to this event. It’s evidence of what seems to be a key trait and characteristic of innovative teams and people. They are what many refer to as…

Unvarnished.

If I think back to that team from two decades ago, we were definitely unvarnished. We called a spade a spade. Had little to no respect to the company hierarchy and even less for the status quo. And, as a team, we were brutally honest with each other and everyone on the team felt very comfortable letting me know when I was full of shit – which was, and continues to be, often.

But that team moved, as Steve Jobs would say, mountains – not only designing what would later morph into Flowcasting, but implementing a significant portion of the concept and, as a result, changing the mental model of retail planning.

I had no idea at the time, but being unvarnished was the key trait we had. Franseca Gino has extensively studied what makes great teams and penned a brilliant book about her learnings, entitled “Rebel Talent”.

She dedicates consider time to unvarnishment and quotes extensively from Ed Catmull, famed leader of Pixar Animation Studios who’s worked brilliantly with another member of the unvarnished hall of fame – Steve Jobs.

According to Catmull, “a hallmark of creative cultures is that people feel free to share ideas, opinions and criticisms. When the group draws on the unvarnished perspectives of all its members, the collective knowledge and decision making benefits.”

According to Catmull, and others (including me), “Candor is the key to constructive collaboration”. The KEY to disruptive innovation.

Here’s another example to prove my point. When I was consulting at a national western Canadian retailer, our team was lucky to have an Executive Sponsor who was, as I now understand, unvarnished as well.

As the project unfolded I was amazed how he operated and the way he encouraged and responded to what I’d call dissent. Most leaders of teams absolutely abhor dissent – having been unfortunately schooled over time that company hierarchy was there for a reason and was the tie-breaker on decision making and direction setting.

Our Sponsor openly encouraged people to dissent with him and readily and openly changed his mind whenever required. I vividly remember a very tense and rough session around job design and rollout in which he was at loggerheads with the team, including me. When I think back, it was amazing to see how “safe” team members felt disagreeing with him – and, in this case, very passionately.

As it turned out, over the next few days, we continued the dialogue and he changed his opinion 180 degrees – eventually agreeing with his direct report.

Neuroscience refers to this as being able to work with “psychological safety” – which is a fancier way of saying people are free to be unvarnished. To say what they believe, why and to whom with no consequences whatsoever.
Without question, as I’ve been thinking and studying great teams and innovation I realize just how brilliant this Sponsor was and the environment he helped to foster.

How many Executives, Leaders or teams are really working in an unvarnished environment – with complete psychological safety? I think you’d agree, not many.

If you, your company and your supply chain is going to compete and continually evolve and improve, won’t ongoing innovation need to become a way of life? And that means people need to collaborate better, disrupt faster and feel completely comfortable challenging and destroying the status quo.

Now, I’m not saying that when you don’t agree with someone to tell them to go F-themselves.

What I am saying – and other folks who are a lot smarter than me – is that hiring, promoting, encouraging and fostering people and a working environment that is unvarnished will be a crucial!

So here’s to being unvarnished. To being and working in safety. To real collaboration and candor.

And to looking your status quo in the eye and saying…”F**k you!”

We Can All Agree

 

We rarely think people have good sense unless they agree with us. – Francois de la Rochefoucauld (1613-1680)

agree-givemesomeenglish

My family has a history of heart problems.

Although my blood pressure and cholesterol are both fine, I’m 47 years old, carrying 15-20 extra pounds and I don’t get enough exercise, which compounds that risk.

Family History + Being Middle Aged + Being Overweight + Not Enough Cardio = Increased Risk of Heart Problems

It’s hardly a mystery. Everybody knows this. I agree.

I can do nothing about my family history or my age, but I’ve been about the same weight for the last several years and have not meaningfully or sustainably increased the amount of daily exercise I get on a daily basis.

Ask any smoker if they are aware of all of the various health risks from smoking. They too will agree that smoking is bad. But they still do it.

Clearly, there isn’t a binary choice (i.e. agree or disagree), rather different ‘levels’ of agreement:

  • I agree with what you’re saying.
  • I agree that something needs to change.
  • I agree to change my behaviour.

In business in general (and supply chain in particular), significant improvement in results can only be achieved with process-driven changes to people’s behaviour.

We can all agree that the quality of a retailer’s customer service is directly tied to the accuracy of their store-item level inventory records – especially in an omnichannel world where a customer can demand product from a website and expect to pick it up in their neighbourhood store a couple hours later. It’s not a stretch to further agree that processes, procedures and measurement systems need to be in place to improve and maintain store level on hand accuracy.

And yet many retailers (40% of grocery stores according to a recent study) don’t even use a system on hand balance and those that do are not attacking their accuracy problems.

We can all agree that retail supply chains should be consumer driven to be efficient and profitable. And yet most retailers are using the same ‘old school’ processes for promotions, new product introductions and seasonal sales – ‘buy a ton, push it out to the stores and pray that it sells’.

While ‘agreement in principle’ is certainly necessary, it is clearly far from sufficient. So what is the secret ingredient?

I’ve seen it many times throughout my career in retail. I visit one store and the aisles are uncluttered, the shelves are faced out beautifully and the back room is organized and tidy. Then I visit another store with the same retailer and it looks like it was recently hit by a cyclone – even though both stores have the same systems, processes and training manuals.

The difference is that you have to care.

Don’t get me wrong. I’m not saying that the store manager with the messy store has no passion. I’m just saying that he doesn’t have passion for retailing.

It’s the same reason I’m a supply chain consultant and not a fitness instructor (at least for now). I agree in principle that I need to exercise and lose weight, but I care deeply about order, organization and process discipline in the retail supply chain.

So where does this passion come from and how can it be cultivated and spread throughout an organization?

God, I really wish I knew. I believe that everyone is born with passion, but not everybody is in a job they’re passionate about.

That said, I know that passion can be infectious enough that a very small group of uber-passionate people can change organizations – not necessarily by making everyone as passionate as they are, but by generating just enough force to overcome the organizational inertia.

And once the boulder starts rolling down the hillside, we can all agree that it’s very difficult to stop.

Prototyping the prototype

If someone asked me to summarize myself, I’d probably say that I’m a life-long student – an avid reader and someone who knows that things can always be made better – a lot better.

Some recent experiences have got me thinking about our approach to designing and implementing Flowcasting-like solutions for our clients.

First, what has made our approach so successful?  It’s really an obsession with simplicity and a deep understanding that instilling new behaviors is about people and process.

At the heart of the approach is what we call a process lab, or process prototype.

Think about how successful products are created.  They are designed.  Then a prototype is created.  Then it’s tested.  Then it’s revised.  Prototyped again.  Tested again, and the process continues until the product sees the light of day.

Why can’t a process change also be prototyped?

It can and we do.

We work with teams to design new processes and workflows on paper then build a lab-like environment and prototype the process with real end-users.  It helps people see and feel the process first-hand, and also provides us critical early feedback on the process – how it works, what people like, what they struggle with, where it can be improved, etc.

It’s all consistent with our belief about change – that people rarely believe what you tell them, but they always believe what they tell themselves.

On our recent implementation of Flowcasting for a hard goods retailer in Western Canada, I was fortunate to experience what could be described as rapid prototyping, with respect to the technology solution.

To set the stage, the Flowcasting solution we used was an early and immature solution.  However, the fundamental foundation and architecture, along with the retail focused functionality was second to none.

Of course, even though we designed and did our prototype lab work with the team and users, a number of things emerged that we needed to revisit as we made the journey.  As luck would have it, we were working with the actual architect of the solution and, over a couple of months, we made some important and elegant revisions to the solution that improved it considerably.

Essentially we did a series of small, software-focused prototypes (to support our process thinking, of course) that were quickly designed, tested then deployed.  It was one of the most exhilarating experiences I’ve been involved in and I’ve been doing project work since the dawn of civilization (at least it feels like that!).

The result was equally impressive.  Even though the RedPrairie Collaborative Flowcasting solution was already an excellent one, the changes that were prototyped and implemented transformed the solution into something special and unique.

In my professional and expert opinion the solution solves all the major retail planning challenges, is intuitive, scales like stink on a monkey and is so simple that even an adult can learn and use it.  Even. An. Adult.

Not long after this experience I read an interesting book called Scrum – about an approach for designing and implementing new technologies that relied on rapid prototyping.  The basic idea was to design things quickly, make the changes, test it and demonstrate it to people and adjust accordingly.  Then rinse and repeat.

Boom!  It was essentially the approach that we’d used so successfully to transform the Flowcasting solution.  And, it got me pondering.

Why wouldn’t we apply the same thinking to our implementation framework?  After all, the idea of a process prototype was not foreign to us – in fact, it’s a cornerstone of our approach.

Perhaps we should do more than one…just like this:

Prototype picture

The idea would be to do shorter bursts of design and lab work, then engage the users, get them to work with the process, and provide feedback and adjust.  I have no idea how many of these micro-prototypes we might need but the approach could be flexible to have as many as required – depending on the magnitude and scope of the change.

I really like the idea and hopefully will test it soon.  We’re working with a great bunch of folks at a Canadian retailer and hopefully we’ll get the opportunity to help them with the implementation.  If that happens, I’m sure we can leverage this thinking and incorporate it into our approach.

It will be like prototyping the prototype.

Bad Habits, Part 1

 

Bad habits are like a comfortable bed, easy to get into, but hard to get out of – Anonymous

Friedrich Nietsche said “Most bad habits are tools to help us through life.”

This is especially true in the world of retail supply chain planning. When retailers embark upon implementing time-phased planning, it is tempting – from a change management standpoint – to tell people “this isn’t much different than what we do today” or “we’re essentially doing the same thing in a different way”.

While this is partially true at the 10,000 foot level, the things that are different are fundamentally different.

This month, we’ll explore a bad planning habit that is particularly insidious, because it is often treated as best practice in a non-Flowcasting world: Using the forecast as a “joystick” to control product flow.

There comes a time in every retailer’s life when product must flow further in advance of customer demand than desired, such as for capacity blowing seasonal peaks, planogram resets or promotional display setups.

In a reorder point world, there is little means to plan these types of things in advance. Replenishment rules such as safety stock apply “right now”, making it exceedingly difficult to do a lot of advance preparation in the system. This leaves 2 options:

  1. Plan all of your safety stock updates in advance and use an Outlook reminder to update the values at just the right time to trigger orders when you want them to arrive.
  2. Spend hours creating manual orders/transfer requests with the future ship dates you want – and pray that things don’t change a lot in the meantime that will require you to change those dates/quantities as it gets closer to execution time.

Neither very good options to be sure.

But wait!

There is a third option. By putting an artificial spike in the forecast at around the time you want product to arrive at various locations, you can ‘trick’ the system into flowing product when you want, but also take advantage of changing inventory levels right up until the lead time fence, thereby letting the ordering happen automatically.

To some extent, this makes sense in a reorder point world. Often, it can be the only efficient and automatic way to control flow. And it doesn’t do too much damage, because the forecast really only exists to trigger an order for an item at a location.

So what would happen if this approach was applied in a Flowcasting world? Not much: just unstable plans, incorrect capacity and financial projections and general chaos within operations and the vendor community.

That’s because, with Flowcasting, the sales forecast doesn’t merely drive ordering for an item at a location. It drives replenishment across all locations in the supply chain simultaneously. It drives capacity planning for the DCs and transportation department. It drives labour planning at the stores. It drives revenue, purchasing and inventory projections within the merchandising teams and finance.

Simply put, the forecast must always be representative of how much you expect to sell, where you expect to sell it and when you expect to sell it. And with the visibility afforded by a reasonable sales forecast, many options become available for controlling the flow of goods as necessary.

In other words, once you make the leap to Flowcasting, the bad habit of using your forecast as a ‘joystick’ to control replenishment is no longer  a ‘tool that helps you through life’ – rather, it is one of the quickest possible ways to make your life a living hell.