The American Red Cross: A New SCRC Partner Company Engages the Influence Model!

I had the opportunity to visit with the American Red Cross in Charlotte, NC yesterday, and held a negotiation workshop with the supply chain directors and managers.  This was at the request of my good friend, Tom Nash, who I have known since 2000, when he was an IT Sourcing executive at Shell Oil in Houston.  Since leaving Shell, Tom has had the opportunity to work in a number of different environments, including Cendant (the owner of the travel site Orbitz), Ministry Health Care, Premier Health Care, and now the Red Cross.  At every place, he has landed, he has been a strong supporter of the Supply Chain Resource Cooperative, and his engagement at the ARC was no different.  We are proud to be working with the Red Cross, and look forward to kicking off a set of student projects their supply chain team this coming fall.

The Red Cross is a 150 year old company, and their symbol is perhaps one of the most recognized brands in the world.  The Red Cross not only collects and distributes blood, but is also responsible for emergency and disaster response, and has to build a responsive supply chain that can react quickly to unexpected events. One would think that with the importance of blood distribution being at the core of their business, that a strongly centralized supply chain organization would be natural.  Guess again!  Up until five years ago, there was no formal centralization supply chain entity at the Red Cross.  Enter Jill Bossi, another one of my former colleagues, who came in from the Bank of America.  Jill was able to do some good things, building a centralized group that became the foundation for transformation.  She was also able to establish inventory strategies for five large distribution centers that form the neural network for the entity’s emergency operations.   Several new people were brought into supply chain roles who had strong backgrounds in planning, but the organization struggled with having to centralize a massive array of fleet providers, a fragmented and set of diverse equipment suppliers, and a somewhat uncertain governance structure.

Enter Tom Nash, who has been there only 2 months.  Tom came in to the new role as the Chief Supply Chain Officer, reporting directly to the CFO.  As noted in my previous blogs, he is a firm believer in the “Influence Model”.  The Influence Model, also known as the Cohen-Bradford Influence Model, was created by Allen R. Cohen and David L. Bradford, both leadership experts and distinguished professors. The model was originally published in their 2005 book, “Influence Without Authority.”  Cohen and Bradford believe that authority can be problematic. It doesn’t always guarantee that you’ll get support and commitment from those around you; and it can create fear, and motivate people to act for the wrong reasons. This is why it’s so useful to learn how to influence others without using authority.  Ultimately, the Influence Model is based on the law of reciprocity – the belief that all of the positive and negative things we do for (or to) others will be paid back over time.

In Tom’s short time that he has been at ARC, he has already helped to make the influence model a core part of the sourcing team culture.  In discussions with the managers yesterday, we emphasized how influence will need to be a core part of the changes to their sourcing agreements.  One of the teams discussed how this model had been used in negotiating a large HR system contract two weeks ago.  The team spent about two weeks preparing and explaining the market situation to key stakeholders, who together (led by procurement) developed the sourcing and negotiation strategy for engaging the supplier.  The VP of Human Resources was brought in, and her role in supporting procurement’s contracting strategy was explained.  After buying into the strategy, she opened up the session with the supplier, to show her support for the approach, resulting in a successful negotiation outcome.

The Red Cross still has a lot of work to do to transform their supply chain, but I am certain that the Influence Model will continue to play a large role in how this rolls out!