Recently this article from Harvard Business Review was passed along to me. It’s titled Sum Up Your Leadership in Six Words. I jokingly responded with only six words: "Can I Have More Than Six?"

All teasing aside, I think the best six words to describe my leadership style are, "My motto is GO!GO!GO!" Those of you who frequently read my blog or know me are probably shaking your heads up and down right now.

I’ve never been one to be content. I’m always looking ahead to see what the next challenge is that needs to be overcome. It’s not just a part of my personal strategy – It’s also a part of my business strategy. And therefore, it’s a part of the Tompkins business environment as well. From Day 1, everyone who joins the Tompkins team knows the credo, GO!GO!GO!

For those of you who are thinking "What six words would I use to describe my leadership style?" I have a chart (below) that I used in my book Bold Leadership that is from a study conducted by James Kouzes and Barry Z. Posner. It lists 20 leadership characteristics. The most interesting fact about this chart is that the same top four – honest, competent, forward looking, inspiring (see this related blog post) – continue to appear year after year.

It really is no surprise that honesty is the characteristic most consistently sought after in a leader. Other words associated with honesty are trust, truthful, standards, principled, values and ethics.

For competency, the qualities most associated with the characteristic are capable, ability to ask good questions, achievements, winning track record, leadership skills (or demonstrated leadership abilities).

To be forward looking, a leader needs to have a vision, a dream, a goal, planning abilities, strategy and the capability to chart the course.

Finally, to be inspiring, you need to demonstrate passion, enthusiasm, energy, positive attitude, ability to be a cheerleader and confidence.

What type of leader are you? Think it over and send me your thoughts on leadership, and it can certainly be longer than six words. I would like to hear from you on this topic that is so close to my heart and mind!

GO!GO!GO!

Jim

I asked Bruce Tompkins, Executive Director of the Supply Chain Consortium, to update readers on balancing supply and demand in the age of super-charged supply chains. Bruce is an expert in lean manufacturing, benchmarking and best practices, logistics, and being my younger brother (although he would sometimes like to omit this last credit.)

- Jim

Balancing supply and demand is a pretty interesting proposition, depending on who you are and what you do. It might also conjure up images of pain and suffering for those who are held responsible for actually achieving some kind of balance in their supply chains.

The idea that supply, which is now coming from almost anywhere in the world, and demand, which can be immensely variable week-to-week and day-to-day, could possibly be in sync leaves me amazed, amused and a bit confused. Here is what I know about where we are today on this issue, and of course, it raises a few more questions:

We have come a long way with technology to provide visibility into our suppliers’ plants, but is that enough?

There are increased activities within companies to improve relationships with all supply chain partners, and that’s great!

We have implemented better forecasting methods and tools to predict events and promotion impacts, but how much has that helped?

We have created demand signaling systems and repositories (DSR) and POS tools to get closer and closer to actual customer demand.

We have implemented VMI and other stocking and replenishment processes to tighten and close the loop.

New product introduction processes at many companies have been enhanced and the planning greatly improved to keep supply and demand better aligned as new products hit the market.

Many companies have reorganized and then reorganized again, trying to find the best way to make the supply/demand equation more effective.

The reality of the situation appears to be that we have unprecedented levels of variability in supply due to longer and more complex supply chains, and we have an economy that is creating unprecedented levels of variability in consumer demand. Wow, so this could be here to stay!

If you think I’m now going to give you the silver bullet that will make all of this go away and miraculously return your supply chain to the way it was in the good ol’ days, I’m sorry. There is no silver bullet. The path forward is to keep trying and trying and trying to take variability out of the supply side and demand side of the equation. Technology and tools are going to help, better processes and practices are essential, improved relationships are a must, and an organization that helps bring supply and demand closer is also key.

If you have insight into this topic, I would love to hear from you.

I love the line, "The only thing constant is change." It’s so true, especially in the supply chain, and especially now.

Once you think you have something figured out in business today, it’s already time to revise it. So how do you deal with this constant change? The best way that organizations are dealing with this is through simplification. The old complexities are being tossed out, since the recession became a wake-up call for those who had not yet taken the time to see where cost savings are hidden and process improvements exist.

One begins to wonder, "Will there be a new normal – a new standard – for supply chains?" The short answer is "Yes" but supply chains are changing so quickly that it is difficult to define exactly what this "new normal" looks and feels like. In fact, it is more abnormal than normal!

Dan Gilmore, Editor-in-Chief of Supply Chain Digest, recently wrote a piece on A 'New Supply Chain Normal?' He asked me to share a few words along with some other experts. Check it out and see what we all had to say about the future of supply chains, as well as how readers responded.

Go!Go!Go!

Jim

Guest Blogger: Greg Hazlett, Principal, Global Supply Chain Services, Tompkins Associates

Greg lives in the San Francisco Bay Area and is an expert in helping high-tech companies – including manufacturers and distributors of computer hardware and software, consumer electronics, semiconductors, components and peripherals, and capital equipment – improve their global supply chain activities.

High-tech industries have always been known for their speed to adapt to changes in the marketplace and for their ability to mass produce customer-specific products. What you may not know is that high-tech industries are also notorious for their global supply chain success and early adoption of "outsourcing" at all levels. All this has been the norm for high-tech in the past few decades.

The need to have supply chains that were flexible enough to handle the ever-shortening product lifecycles of their products has always been important. Manufacturing and assembly capabilities have typically been flexible enough to deliver customer-specific products at competitive prices – Dell started, but many have followed.

When you ordered a high-tech device online, you had no idea if it shipped directly to you from Columbus, or Shanghai, or if it was built in Kentucky or Guadalajara – and you didn’t care. You also accepted the fact that even though you continued to recognize and value the brand on the outside of your device, there was the possibility that it was designed, built, and delivered by separate companies – none of whose names you had ever heard of before.

These things have happened, and we expected them to continue to happen, but then the "Great Recession" came along and threw a wrench into everything! So what has really changed in this industry, and how is it responding? Three things come to mind: 1) A surge in consolidation 2) Greater emphasis on alternative energy 3) A real questioning of "Who will my customers be now?"

1) Consolidation

We have come to expect consolidation, but the accelerated consolidation that is currently underway isn’t just adding small new pieces to existing companies; it is completely changing these organizations as we know them. For example, there is a change of focus from hardware to software and services. Look at IBM’s acquisitions of Cognos and ILog, HP’s acquisition of EDS, and Oracle’s acquisition of Sun.

2) Alternative Energy

Stimulus funding for alternative energy has high-tech companies jumping on the solar energy bandwagon sooner rather than later. Where there is an opportunity, high-tech tends to adjust quickly to take advantage, and so there is continued movement into solar energy by traditional semiconductor and capital equipment manufacturers.

One of the best examples recently is Applied Materials, who showcased their strategy to make solar power more affordable with higher efficiency panels, while still being able to scale down costs. Texas Instruments recently announced two new motor control kits that are the first in the industry to enable power factor correction, which improves energy efficiency.

3) Who Are My Customers Now?

The economic downturn has some companies questioning their customer bases for the first time. It’s no secret that high-tech OEMs have been wrestling with some serious questions lately. "Who are my customers going to be once the post-recession Great Comeback completely takes hold? What retailers will be left? Circuit City and Tweeter are gone, so who will step up and take their place? Will it be Best Buy, Walmart, or Costco? Will it be someone that isn’t currently a household name? Might it even be a channel other than retail?"

Dell has made a lot of progress with their own retail channel and expanded their global footprint and has even been recognized for creating value for its partners. Will others follow? Apple continues to outshine most everyone with its ability to predict consumer demand, as evidenced by its selling a million new iPhones in 3 days. If you will recall, it took them over 70 days to hit that number with the original iPhone.

So, even though we have come to expect change in the high-tech industry, we could have never predicted the type of changes we have seen in the past year. The new norm is truly that there is no norm. It will be interesting to see what happens with consolidation, energy alternatives, and lingering questions about customers that have been caused by the recession.

If you are in a high-tech industry or involved in any aspect, what has been your experience? There are still a lot of questions to be answered in the coming months.

I asked Brian Hudock, a partner at Tompkins Associates, for his insight into what's really going on in today's healthcare supply chains. Brian is an expert on improving supply chain performance in healthcare, pharmaceuticals and medical products and has spent a fair amount of time in waiting rooms. Here are his thoughts.

-Jim

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What do you think about when you're sitting, waiting, in the very appropriately named physician's "waiting room"? For me recently, it was first and foremost the health of my wife (who is fine) and secondly, it was the complexity of the healthcare market. Signs of complexity in the healthcare industry were swirling all around me.

My wife was having an outpatient procedure, and when we walked into the facility, I noticed multiple (dozens) of specialty offices -- all focused on the spinal issues, but each on specific specialties. As we filled out the paperwork along with the insurance forms and the the waivers, the amount of information collected and generated from a single patient was staggering (and this for a single visit). As my wife went into the prep room, I noted how the complexity of the bed, the supplies, the sanitation options, the additional questions asked (yes, more paperwork), all reinforced how healthcare has become so much more specialized and more extensive than the tongue depressors and cotton balls I remember as a child when I visited the all - purpose family physician. Although I think we just called him "the doctor" back them.

With this much specialization, it makes perfect sense that the pharmaceutical and medical products industries are becoming less specialized and more diverse. In order to service patients effectively, a broad range of solutions (including those that are customized to a single patient) must be part of a broad portfolio of solutions. To ensure that patients are well served and to keep pace with a rapidly evolving healthcare industry, the ability to manage, effectively distribute, and collaborate with industry partners is becoming increasingly critical.

The big reality of healthcare today is that the merger of non-traditional partners and industries -- including Pharmaceuticals, Generics, Vaccines, Biotechnology, Genetics, Medical Device, Medical Products, and OTC products using the same supply chain across the globe -- will challenge even the best logisticians and planners. If these acquisitions and mergers are not successfully integrated, the cost reductions being sought to support governmental healthcare goals will never be met.

These goals include up to a $1 trillion savings over the next 10 years -- not including the increased cost and challenges of new drug development and approvals, increased patent limitations globally, and an explosive healthcare supply chain security and counterfeiting problem. I knew it before, but realize now more than ever, that integrated systems, partnerships and control are and will continue to be critical in all sectors of healthcare.

My belief is the next decade will be fascinating as we truly create a seamless Healthcare Supply Chain. Now if we can do just something about these uncomfortable waiting room chairs and the long wait times!

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As I mentioned in my previous post, I began a four-part series of podcasts this week on your post-recession return to recovery, growth and prosperity.

In "The Great Comeback, Part One: Responding to the Recession," one of issues that I discuss is the role that our highly efficient supply chains have played in the recessionary cycle. For the first time ever, could it be that global supply chains actually helped accelerate the economic downturn? I think so.

When the U.S. economic situation went into meltdown in 2008, the entire world felt the effects almost immediately. The recession went global as imports and exports shrunk everywhere. I believe that this worldwide impact was the result of the global integration and connectivity of supply chains today.

If that is so, then we should have had plenty of warning. We have been living in various eras of globalization all the way back to 1492, according to the author of The World is Flat, Thomas Friedman. That year, of course, is when Columbus set sail for the West Indies. Friedman calls that event Globalization 1.0, followed up by innovations made between the 19th and 20th centuries such as electricity, phones, fiber optics, and the Internet – Globalization 2.0.

The current era, Globalization 3.0, is where we are today. Friedman defines this 3.0 era with the collaboration and competition we are now able to participate in globally due to innovations in software and communications. I think the global supply chain is a part of what makes it a new era as well.

Globalization is created through human innovation, such as the discoveries and revelations Friedman points out. The world has been shrinking for generations, and with Internet software and communications, it seems to get smaller by the minute.

Just as globalization and global supply chains were a factor in the recession's spread being more rapid worldwide, it will also help it end faster. I believe the global supply chain currently is – and will continue to be – a key factor in recovery from this recession. As consumer confidence returns, companies that are the best prepared will have busy global supply chains in place all over the world to meet the demands of the market while staying efficient and hitting benchmarks.

It is important that all business leaders and managers be prepared for this situation, as the benchmarking of the supply chain will be a big factor in how competitive a company will be in the post-recession market. The economic bottoming-out of some industries such as pharmaceuticals, food and beverage, and inexpensive consumer electronics has already begun, and these companies are leading the Great Comeback.

To listen to this podcast, or to see the text transcript, go to

http://www.tompkinsinc.com/podcast/transcripts/7-7-09_podcast22_great_comeback1.asp  

I would be very interested in your thoughts on the connection between supercharged, global supply chains and economic recovery. What has your experience been and what are your predictions?

Jim

Rarely do I look at weather forecasts, but I really wanted to know on the 4th of July how the weather was going to be around 9 PM as my wife and I had two of our grandchildren at our beach house for fireworks. Well, unfortunately the forecast was not good. Scattered thunderstorms with a 70% chance of rain at 8 PM, 60% chance at 9 and 10 PM. 

My wife overruled the weather forecast and had the kids take naps so they could stay up late for the excitement. Well, as you could have guessed, the weather was beautiful with no rain until about 3 AM, and so we had a great time.

I know we all have made jokes about the inaccuracy of weather forecasts. I guess it is really hard to do this well. This really makes me think, though, why do we put so much credence into forecasts for the economy? Economic experts make big news when they make predictions for the macro economy. They enjoy explaining to us what happened last month and then forecast what they think will happen next month, next quarter and next year.

Are the economic forecasters any better then the weather forecasters? Or are my expectations of these forecasts unrealistic? I am not sure, but I do know these macro predictions are not applicable to many of your companies or your industries. Right now, many of these macro economic forecasts are about as useful as the weather forecast I got for the 4th of July.

In thinking about this, I decided I wanted to use this space to examine the word "forecast" as it applies to business strategy. I think we say the word "forecast" so often, it has lost its true meaning over time. As a regular feature on this blog, I look at jargon like this to help us remember what over-used words actually mean.

Personally, I think of the word forecast in terms of the two words found within it: "fore," which you yell in the game of golf to warn others to duck, and "cast," which when you go fishing, means to throw out. For me, if there is a forecast around, it means: Duck! And then… throw it out!

That’s my simplified definition, but there is more to it. I chose to look at a definition of the word forecast more deeply because there is just too much that can't be predicted within individual business sectors right now. Forecasts no longer apply (and I realize how baffling and frustrating this development has become). Looking through business news, you can find lots of examples of forecasts being revised by public companies because they aren't right, or new information affects them, or forecasts turn out to be totally wrong.

I included an example of how forecasting plays out in the real world in the business novel Caught Between the Tiger and the Dragon. The main character Rich Morrison, a CEO of a lingerie manufacturing company, is constantly being badgered into creating new forecasts.

His private equity bosses who own the lingerie company become alarmed at the smallest market changes – from gas price swings to the financial state of the companies that buy from them.

Rich gets phone calls from the bosses at all hours of the day and night to submit new forecasts based on others’ forecasts, which, as you can imagine, is incredibly frustrating.

Even though Rich dutifully creates forecasts to the best of his ability, his bosses only want to listen to the latest trends and alarmist news instead of the longer-term facts and figures that Rich is sure are the most appropriate for his company.

Even so, Rich knows that forecasts are not worth the paper they are printed on. He understands that forecasts must always be revised, because they are based on uncertainties. As Peter Drucker said, "Uncertainty – in the economy, society and politics – has become so great as to render futile, if not counterproductive, the kind of planning most companies still practice: forecasting based on probabilities."

Forecasts can be useful, but depending on them and adjusting them for every little thing can be counterproductive, as Drucker points out. It can make you lose sight of the actual core goals of your business. This is especially true when depending on a macro view of the economy to make sense of your industry.

This is also why some companies aren’t providing future predictions of their quarterly performance any longer – it is counterproductive not only for them, but for their investors. In the June 8 Fortune magazine article "Five Moves to Make Now," it recommends "that companies stop forecasting their quarterly earnings, before and during the quarter." The article also notes that "Respected firms [such] as Aetna, GE, Intel and Unilever have stopped giving quarterly guidance in recent months." I hope more consider joining them, especially now in this time of major uncertainty.

You can keep reading and creating the forecasts if you want, but I suggest taking them with a grain of salt or determining if it is really a productive use of your time right now.

Go!Go!Go!

Note: I've got a series of podcasts coming up on the topic of The Great Comeback that will illustrate the micro-economic strategy that businesses should use to recover, grow and prosper after the recession ends. Go here to subscribe for updates when these podcasts are released at

http://www.tompkinsinc.com/podcast

Also, for a rundown on The Great Comeback and what it means for your company, you can download the white paper I wrote about the subject here.

The answer: FedEx and UPS as they fight tooth and nail against each other over the FAA Reauthorization Act of 2009.

Chris Ferrell, Associate Director of the Supply Chain Consortium, is not only a transportation and benchmarking and best practices guru, he also knows an enticing, controversial story when he sees one. As you’ll see in his post below, FedEx and UPS are in a heated battle involving unionized labor. Chris pulls out the humor in the situation, while summarizing a pretty serious situation.

Here’s what he has to say.

___________

As a transportation professional, I have been fascinated by the recent wrangling between United Parcel Service (UPS) and FedEx over how the two parcel giants should be governed. You see, FedEx has launched a multimillion dollar ad campaign, including a thinly-veiled website that takes potshots at UPS for promoting legislation aimed squarely at making it easier for FedEx employees to unionize. In response, UPS quickly replied with a very direct press release, which also has a lot of valid points.

I encourage you to take a look at both websites, if for no other reason than the hilarious parody of UPS’s "whiteboard guy" with the goofy haircut. But be forewarned: Both are as heavily slanted as you might expect, and there are no innocent victims here.

Here’s the meat and potatoes of the situation: The FAA Reauthorization Act of 2009, which passed the House on May 21 by a 2:1 ratio, has a clause (Section 806, for those so inclined) that essentially says that those employees of express delivery services who are not directly involved in the airplane component (flying, maintenance, loading/unloading, etc.) should be governed by the National Labor Relations Act (NLRA) rather than the Railway Labor Act (RLA). Section 806 takes up a little more than one page of an otherwise mundane 325-page bill intended to appropriate funds for the FAA through 2012.

The RLA has overseen the railroads since 1926 (amended to include airlines in 1936) because of the unique aspects of transportation networks. It exists "to avoid any interruption to commerce and to assist in the prompt settlement of disputes," while working "to ensure the right of employees to organize." This has the effect of allowing employees to unionize but only if they vote to do so nationwide, and even then, it effectively prevents them from utilizing organized labor’s most damaging weapon: the prolonged strike. The NLRA, on the other hand, allows for any definable group – a specific type of employee, employees at an individual location, etc... – to elect to unionize.

FedEx, which began exclusively as an overnight delivery airline, was correctly placed under the jurisdiction of the RLA and is largely non-union. UPS, which began in the time of the horse-and-carriage, is governed by the NLRA and is heavily unionized. Still, I doubt many of today’s consumers could tell a discernable difference between the modern-day versions of the two companies, as both offer a full line of next-day air, second-day air, and ground services ... and there is absolutely no difference in the pickup and delivery components of the two competitors.

So, on the one hand, UPS is entirely correct to want the same rules imposed on their competition (and make no mistake, the legislation is absolutely being driven by UPS). On the other hand, no one who remembers the UPS strike during the fall of 1997 would deny that the parcel giants have the potential to cause prolonged "interruption of commerce" capable of crippling an entire economy.

For its part, FedEx has its own history of exploiting political loopholes. Before they got into the ground and parcel business, the company went to great lengths to get all of its air-express employees under the jurisdiction of the RLA. They have also taken the oft-criticized (by unions and lawyers) and highly scrutinized (by the I.R.S.) tact of classifying their drivers as independent contractors rather than company employees. So, despite consistently being named to lists of best places to work, FedEx clearly sees sporadic – or even wholesale – unionization as a legitimate threat.

From a business perspective, the correct answer would be to have UPS governed by the RLA. UPS even made that case when they originally launched their air service; however, the Teamsters blocked UPS’s attempt to re-classify, and the two competitors have been playing by different rules ever since. So, should a company be able to maintain an exclusive competitive advantage even though it’s no longer unique, or should the playing field be leveled – likely at the expense of consumers – by legislation manufactured by its unionized competition, which has nothing to lose?

Neither choice seems right to me, but the issue has never really been about right and wrong. Rather, it is about two competitors, unchecked, inflicting as much damage to each other as possible. My guess is that the bill passes with the provision intact and that FedEx will be subjected to the NLRA – and potentially the Employee Free Choice Act (EFCA) – which is either pork barrel spoils for organized labor or the path to rebuilding America's middle class, depending on your perspective. But that’s another blog post altogether.

So, is one company more "right" here than the other? How do you think this will turn out? And what will be the ramifications of the outcome (good or bad)? Let me know what you think.

Chris Ferrell