Avoiding Ugly Surprises Ronald C. Vandermyde, CPM, FInstIB CEO, Premiere Management Associates, Inc. 1

Overview Just a few concepts to set the stage 2

Options for avoiding ugly surprises 3 Get burned enough times that you naturally know what to do Wing it long enough that you learn you shouldn’t do that

Options for avoiding ugly surprises 4 Or… Develop and hone your key skills proactively Learn to think strategically Learn the value of effective preparation

First, a little about… 5 Key things that impact the purchasing process – looking through the management lens

Purchasing is often a mixture of: 6 Routine supplies Special orders Custom orders Project-related purchases

One Conceptualization Two Strategy Three Design-build Four Execution 7

Detail Scope / Outcomes Define and sequence Create Action Plan Estimate CostsExecute PilotRefineFull rollout Tracking / Metrics Stabilize 8

Scope and Outcomes First, start with outcomes. Outcome-related questions are: What results do we want when finished? What will success look like? When the project is finished, what should be different? 9

Stakeholders Identify all direct stakeholders in the project Identify indirect stakeholders in the project Determine foreseeable consequences to each stakeholder Determine possible unintended consequences Develop ideas for inclusion of key stakeholders at the beginning of the project (DISCUSS WHY) 10

Change Management Change management is the “people side” of projects (this is critical, but usually ignored) What plans do you have to: – involve the people who will be victimized by your planning or project? – help them to fully succeed with the project – make changes/needed adaptations 11

Strategic Thinking 12 It’s more than just strategy

Strategic Thinking Two levels of strategy must be considered by every person in the agency. They are: – Agency Level – Customer Level – And in your case, a third: Vendor Level 13

Management 20 years ago The core values are still the same: Honesty Integrity Organizational Skills Time Management Fiscal Responsibility Effective Communication Skills Time Management Professional Skills Interpersonal Skills 14

Management today In addition to the core skills of 20 years ago, managers today must have: Computer skills Internet skills Social networking awareness and skill Environmental responsibility Emotional intelligence Cultural intelligence Understanding of real leadership dynamics Organizational development skills Team skills Keen awareness of risk management 15

Discussion – the world is changing In light of the core skills just presented, how does this impact you? What skills do you most need to focus on in the next 5 years to be current and effective as a purchasing agent? 16

Effective Leadership 17

Communication The most neglected important skill we have 18

19

20 Discuss Chip Theory

21 Discuss Emotional Intelligence

22 Discuss Cultural Intelligence

Discussion 23 Where are you on the spectrum from poor to great communication ability? What signs point to your need to improve? What do you most need to do to improve your ability to communicate effectively?

RFP The crucial link between your agency and your vendors 24

Mistakes I most often see in the RFP process: 25 Failure to consider the perspective of the bidder Discuss this: What elements of a bidder or vendor’s perspective are important to consider? What is the impact?

Mistakes I most often see in the RFP process: 26 Failure to understand the use and importance of the goods and services involved It’s a matter of ripples… (Trona Plant)

Mistakes I most often see in the RFP process: 27 Failure to create an effective Q&A process for the vendors/bidders. What is the consequence if questions can’t be easily satisfied?

Mistakes I most often see in the RFP process: 28 Failure to understand the full consequence of grammar and syntax in the language of the RFP My experience: U.S. Corps of Engineers

Contract Negotiation Important considerations 29

Ponder this… 30 What is the value of a great vendor?

31 Reactive negotiating vs. Proactive Negotiation – Reactive: take full advantage of my opponent Posturing and manipulation is primary Often is short-term in focus – Proactive: seeks win/win Tactics are less important than outcomes Seeks to preserve long-term relationships People-building, not people-manipulating skills

What is the objective of negotiation? 32 To gain PERFORMANCE on an agreement

Discussion 33 If I understand that it is not just about getting a signed contract, but gaining excellent performance on the contract, how does that change our approach to RFP’s, contracts and negotiation?

Follow Up How do you know you are doing a great job? 34

Measuring YOUR performance 35 Strive for customer ASTONISHMENT

How do you know? 36 Should you care about the level of service you provide? If so, how do you know what level of service you provide?

The only measurement that matters: 37 Your service as seen through the eyes of your CUSTOMERS Discuss customers; value in measuring your performance periodically

Measuring Performance 38 Do you have a method in place for doing this? If so, please share how, and what impact it has

39 Q & A