A guy called Jon Stegner found himself in a similar situation. He realised there was a problem with the purchasing process where he worked that would cost the company around one billion dollars over 5 years if it wasn’t dealt with! Unfortunately, none of the senior executive team could see this, so nothing was being done to change matters. So, what did he do?
Well, Jon decided to carry out a small study. He asked a member of his team to find out how much the company paid for gloves used in its factories and how many different types it used. The results astonished him: 424 different types!
What amazed him more was that each factory had its own supplier and their own negotiated price. A pair of gloves that was costing one factory $5 was costing another $17.
He then had a sample of each glove collected and tagged with the name of the factory it was used in and its price, and sorted the gloves by type and by division in the organisation.
Next Jon arranged to meet with the board. On the day of the meeting he piled all the gloves onto the boardroom table. Yes, all 424 of them! When the division presidents came in they couldn’t believe their eyes. “We buy all of these?” they asked, before going to look at the gloves their factories were using.
They were astonished to learn that they were paying around $10 for a glove which looked every bit the same as a $3 glove from another division.
The gloves went on to do a travelling road show to every division, reinforcing just how bad things were. As a consequence, the motivation to change this was huge. It raised the level of urgency, and once Jon had done some benchmarking of competitors he was given a mandate to instigate change.
Why is this such a powerful approach? Rather than analysing all the costs and producing a huge report which potentially could be unread, Jon created an experience for the senior management team. It was an experience which couldn’t help but impact on their feelings, changing their state. And with a change in their state came the desire to act.
So, here is your call to action for this week:
- Identify an element of a project or change programme you are currently working on where the output is a report aimed at starting action
- Create a way to change it from a report into an experience, something people can see, hear, touch, smell and feel
- Notice the difference in results