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  • Writer's pictureZsofia NAGY

How the magic of supply chain works

Why distributed leadership in supply chains is critical & how not to mess it up

supply chain teams need ownership to succeed

I'll use the analogy of cooking magic potion (as most supply chainers are magicians and we are approaching the holiday seasons anyway 😁 ).

The reason why this topic came up is simple:

I've been approached by many middle-leaders and senior leaders in the last 2 years, who complained to me about not having either support from above for critical changes (that they got hired for in the first place!), or no authority to actually execute the needed changes in a safe and efficient manner, let alone having sufficient budget. They were basically set up for failure from day one.

I hope that this analogy helps to bring clarity to how these problems can be avoided and a bit of holiday cheer to all of the supply chain teams and leaders reading it!

So what do organisations look like, if they work correctly?

Nothing new here to be honest:

well setup supply chain organisation

Images from Freepik

The magic potion is being cooked at the lower levels of the organisation by our magicians (those who are executing on tactics and operational tasks). That's where the daily magic aka supply chain results happen.

The leadership is an enabler of all aspects that are needed to produce magic potion:

  1. They have the right magicians on board

  2. The magicians can do their work  and know which potion to cook

  3. Leadership understands the value of the magicians and vice versa, magicians understand the value leadership brings to the magic potion kitchen

In business language, leadership ensures that:

  1. Correct strategy is in place for the circumstances, with clear directions

  2. Aligned organisational structure is in place with clear values

  3. Decisions are happening at the source of information

  4. Issues are dealt with at the appropriate level & escalation rules are clear

  5. Those who need to make decisions are equipped for it

  6. Resources are available

  7. Changes required are being managed aligned with points above

Now, it is also the responsibility of the leadership at all levels to know what's cooking at or under their levels by the oversight they are providing along with the support (as they used to be the magicians in the potion kitchen before).

And even if all the above 7 criteria are in place, it needs to be maintained (not by the elves 😬, but by the leadership & magicians).

Most organisations have 2 main problems:

  1. Either they cannot even correctly establish the 7 points in the first place related to their business needs

  2. Or they struggle to keep the 7 points in line with business needs & changes

What do these lead to?

  1. If setup is unsuccessful:

  2. The wrong potion is cooking in the pot (wrong direction, wasted resources, sluggish performance, not necessarily toxic, but not the right stuff either)

  3. There is no potion cooked at all

  4. If setup was successful, but it is not maintained, or incorrectly maintained:

  5. After some time, the wrong potion is cooking in the pot = instead of magical supply chain results, there is toxic potion that will eventually kill the magicians in your team and potentially you as a leader (when it blows up)

What is a toxic potion in business terms?

  1. Having magicians in the kitchen who don't belong there (either due to lack of knowledge or attitude problems), classic rotten apple syndrome

  2. Having middle-leadership that doesn't enable the magicians (lack of leadership capabilities or knowledge, or both)

  3. Having top-leadership that doesn't enable & support middle-leaders, who need to battle the toxic potion outcomes alone (lack of buy-in and real support with resources)

My question to you, if you are a leader:

Why would it make sense to hire a senior or mid-level leader into your organisation, when you smell toxic potion cooking downstairs, then not support that leader with the changes needed to clean up the magic potion kitchen?

I can guarantee you one thing:

If a toxic potion pot blows up, it will hit you, even if you are at the top. Either you can save your seat, but you have a massive magician and mid-leadership team to replace at the highest cost and rebuild the whole magic potion kitchen, OR you also lose your seat (if the potion is toxic enough to burn down all).

Toxic potions can blow up also in small amounts, where you still have the choice to take action internally and save the day (internal corrective & preventive actions).

If you don't, the consequences will follow at some point in time.

In what ways can a toxic potion blow up really badly?

  1. External audit by your customer (unannounced)

  2. External report & warning of removing the relationship due to lack of service levels reached

  3. External audit by relevant authorities (either following customer complaints or B2B partner complaints)

All the above results in loss of revenue, profit, potentially reputation, talented employees and causes extra spend to recover all these (double whammy).

So it is always better to focus on support, while maintaining a good level of oversight. With these, you can avoid your teams brewing up toxic potions and can correct issues in time.

Good news is: Maintaining the 7 points is not hard at all!

Support the leaders below you and require them to do the same with the magician teams next to and below them.

The support is defined by those 7 key points I mentioned at the setup stage and further by the magicians and leaders you lead (there might be differences in needs).

The question in general is: "What can I do to help you do xyz?" Then listen, observe.

If your setup was correct in the first place and it hasn't deteriorated to a very toxic situation, people will still feel safe to share what they need, especially your mid-level leaders.The magical xmas bells will be ringing pretty loud to give you feedback and you can take action from there.

However, if the toxicity has reached higher levels and started taking team members out (at any level, to any degree from silence to actual passive behaviours), then the cleanup is tough. Here you will very likely need to demonstrate a strong top-down enforced set of values and unwavering support to your leaders to help them clean up (it will also likely cost you an arm and a leg).

I think it is clear which way is worthy to go.

TL:DR for leaders:

  1. Ownership is key at all levels. Distribute ownership & accountability.

  2. Ownership comes with strong professionals, who can stop you from making big mistakes & deliver outstanding results.

  3. Strategy & directions are only as good as being followed.

  4. Values are as good as being lived by all. Here, collaboration instead of competition is critical.

  5. Plan-do-check-correct-repeat with a pace aligned with your business ambitions.

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