Here is an important question for you: Are you pretending, or choosing to intentionally ignore what's going on when you're looking at your company's supply chain issues? Executives who are serious about their company's supply chain capabilities are committed to understanding what is actually happening in their supply chain.
Recently one of my associates mentioned that he heard a very powerful message about what happens to organizations when their leaders pretend they don’t know what’s happening at their company. In short, bad things can happen.
Why would an executive pretend or choose not to know what is going on? As it turns out, plausible deniability can be a powerful tool. After all, if you don’t know what is happening in your company, you can use that as an excuse to not addresses those issues that are hurting your organization.
Here is a practical example of how this principle works. In last week’s Two Minute Warning, we highlighted the fact that there is a reasonable risk that your company could see your freight rates rise by as much as 25-30% over the next 2-3 years. Thousands opened the email, but not many followed up to see if the threats we enumerated were real. That said, it’s obvious - a lot of people are ignoring this message by pretending or choosing to act as if threats don’t exist. However, as I discussed when I was being interviewed on Sirius’ Road Dog Radio this week, the threats are very real.
It’s a shame, but not surprising! In 1989, a consultant named Sidney Yoshida coined the term “The Iceberg of Ignorance.” This iceberg depicts how much each administrative tier knows about issues within their organization. According to Yoshida, on average the top executives in companies only know and understand about 4% of the issues within their company. Managers know about 9% of those same issues, team leaders see 74% of them, and the front-line workers know all of them. Interestingly, while the executives at the top have the resources to address key issues, they lack the awareness and understanding about how these issues affect their companies. Conversely, while the staff at the lower tiers understand and know all about the key issues, they lack the authority, power, and resources to address the issues.
Let’s cut right to the chase. If you want to mitigate the risk of seeing your freight rates go through the roof, you need to stop pretending – or choosing to ignore – what is going on. Your supply chain is facing new and more daunting threats that can severely impact your growth, profitability, market position, competitive advantage, and customer service levels. These threats aren’t going to magically disappear. Instead, addressing these threats will require effective communication between all levels of your organization. It will also require that policies and procedures be established that effectively surface and address supply chain issues and organizational risks, plus prevent unanticipated consequences.
If you choose to be actively engaged in addressing these threats instead of pretending they don’t exist, we can support your efforts. We offer a rapid assessment study that evaluates what is currently happening with your logistics and supply chain operations, what should be happening, and maps a path from your current state to your best-practice future state.
When we get all levels of your organization communicating efficiently and effectively, and making sure they are aware of the key issues in your supply chain, great things can happen!
To learn more, give us a call at 630-833-0890, send me an email, or let’s schedule a brief one-on-one visit via Calendly.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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