What makes strategic issues so difficult are the competing interests associated with them. When solving those issues, it is important to balance those different perspectives. In this, duos can play an important role, argues professor of strategic leadership Bob de Wit during a SCELP session on supply chain strategy.
Supply chain strategy is all about making choices. For instance, do we go for minimum cost or maximum service levels? The two do not go together. After all, maximum service levels require additional inventory, which comes with additional costs. Most companies therefore face the tricky search for the optimal balance between low costs and high service levels, which can be different for each product/market combination.
The Supply Chain Excellence Leadership Platform (SCELP) has developed tools to help define supply chain strategy. In the recently published book 'Direct the Chain', those tools have been developed into the Living Supply Chain Strategy Model. In that model, besides supply chain, marketing and finance also play an important role. "Supply chain strategy, marketing strategy and financial strategy must be integrated with each other," explains Michel van Buren, co-author of the book. "But such a model can only work if those people complement and reinforce each other. They will have to grow towards each other."
Golden duos
At the invitation of SCELP, platform for leaders in supply chain management, Bob de Wit, professor of strategic leadership at Nyenrode Business University, explored the human dynamics in strategy formation at the end of March. He introduced the term paradox for strategic issues: an issue with two seemingly opposite components or interests. Several answers are possible to these, all of which can be 'true'. "Most issues are puzzles with only one answer. You just have to solve those. But strategic issues are never puzzles, but always paradoxes. The most successful way to deal with paradoxes is to form duos: people who are each other's opposites."
De Wit points to golden duos from politics and business: Franklin and Eleanor Roosevelt, Michael Eisner and Frank Wells (Disney), Steve Jobs and Steve Wozniak (Apple).Every organisation needs both people who look at the short term and people who look at the long term. People with a focus on efficiency and people with a focus on innovation. Those who focus only on the short term risk losing sight of the long term. Those who only focus on the long term risk going bankrupt in the short term. "This requires people with different qualities, builders and shapers. In a team of two, you bring those qualities together."
Duos or trios?
After De Wit's online presentation, SCELP members engaged in a discussion led by the SCELP Strategy Working Group, which in addition to Van Buren consists of Caspar Kerkvliet, Theo Rosenberg and Jean-Pierre Piggen. Joining them were two top marketers: Yvonne Nassar (chairman Platform Innovation in Marketing) and Jeremiah Albinus (CEO and former Chief Marketing Officer at fonQ).
This included the question of whether De Wit's golden duo could also be a golden trio. "The danger of a trio is that it can turn into a battle of two against one. But if one of the three plays the role of mediator between the other two, a trio can work well. That role of mediator is for supply chain," articulates Jack van der Veen, co-author and professor of Supply Chain Management at Nyenrode Business University.
Be relevant
Whether a duo or trio: success is only possible if the supply chain director makes his voice heard. "Make sure you are relevant," argues Edith van Erp-Slot, supply PMO director for Mars in Europe. She spoke about how supply chain and commerce work together within Mars. To this end, the consumer products manufacturer has implemented integrated business planning (IBP). "The process ensures that supply chain has a voice in all meetings. We are at the table everywhere, know what is going on and can influence decisions."
Van Erp-Slot argues that supply chain needs to be firmly in place. "The forecast from sales is important input, but not suitable to send into the supply chain as a demand signal. The forecast has more to do with steering and managing budgets and less to do with actual market demand. The question is how independent you are. Or are you still guided by the interests of sales?" states Van Erp-Slot, who also stresses the importance of cooperation with supply chain. "Cooperation is the most important success factor, more important than processes and systems. Be interested and try to understand the other before you want to be understood yourself. And discover how to make use of each other's qualities."
Equal partner
Reflecting on the meeting, Van der Veen reiterated Van Erp-Slot's statement: make sure you are relevant as a supply chain. "That is not a given," says the professor. "Often marketing and sales are seen as the functions responsible for revenue. Supply chain steps on the brakes and may try to keep costs as low as possible. But it is not that simple. Because who ensures that the right product is delivered to the right customer at the right time? You win together and you lose together."
In addition, Van der Veen strongly questions the traditional roles of marketing as 'shaper' and supply chain as 'builder'. "In supply chain, we know better than anyone else that more innovation, more long-term thinking and a more outside-in view is crucial. Supply chain is also in a very appropriate position to facilitate dialogue with marketing and finance and balance the different interests. In the book, we call this role director of value. In short: supply chain should be the partner of marketing and finance. But that is only possible if supply chain is an equal partner."
