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Tag Archives for " 5 Star Business Network "

How To Get The Biggest Bang For Your Technology Buck

There were only 24 hours left. Tomorrow the board would pull the plug on the project which had continued for well over 3 years. The total costs as per internal calculations had run into hundreds of millions of dollars.

External consultants reckoned that when you included the costs of internal resources seconded to the project from rest of the organisation, and other costs buried elsewhere in P&L’s the real total was at least double of that.

However, the project had built a momentum of its own. No one was willing to point at the elephant in the room, let alone to lead it out. Careers were at risk. Good careers – built over several years.

I will talk about the outcomes later in this piece. Before, I do that I want to spend some time talking about how did the company arrive here?

How did so many competent people miss obvious and easy signs that the project was not on track. More importantly, where did it all go off the rails?

Was this a unique situation – with no lessons for  others grappling with technology outsourcing?

Of course, I have covered these, and other similar questions in my book OUTSOURCING 3.0, and in my blogs and videos. The book, in particular, carries a very comprehensive model and diagnostic tool kit, which is value for money.

In this piece, I want to focus on only a few key points. And, I want to frame it as a positive affirmation of key things that would build momentum towards success.

  • Create Congruence in Thinking

Three kind of congruence is important:

  1. Congruence between business strategy and supply chain strategy
  2. Congruence between supply chain strategy and IT strategy
  3. Congruence between IT strategy and business strategy

In the case quoted above, while minor lapses occurred in all three, several major gaps very readily apparent in #2. It appeared as if IT team was working in total isolation from the Supply Chain and Business Transformation team – though their projects were closely linked.

  • Think Beyond Tactics

Short term, tactical thinking – predominantly related to cost savings and control issues and considerations tend to dominate. It is quite easy to lose track of the big picture in the process. All the initial discussions and dreams of gaining competitive advantage are thrown out of the window at the first opportunity.

Then, what is the point in spending all the money? The project appeared like a lot of effort, just to stay in the same place.

  • Visualise How The Life Will Change Once The New Systems Are in Place

This takes more than a flight of fancy. A lot of things will change when one thing changes. You cannot ever do enough of visualisation and preparation. Every time you do this exercise, you will discover some more things that need to change in parts of the processes, infrastructure, skill sets, SOPs, contracts, warehouses, etc. Change it.

  • Do Not Underestimate the Time and Money Requirements

That brings me to my last point. All this difficult work is highly specialised; it also takes considerable time and money.  It needs skills rarely found inside organisations, or even in IT service providers.

While it is well known that most IT projects run into time and money problems, the scope adjustment problem is less well articulated. Yet, taken together, these can wreck havoc on your business outcomes.

supply chain management

The above graphic – taken from my book OUTSOURCING 3.0 sums up the situation nicely.

In the case study quoted at the start of this post, the outcomes were a lot different than what was expected by the majority. The board made a bold decision and pulled the plug on the project in the middle. That single decision most likely saved the company in the long run. They could have saved a lot more money if, at the outset, they are created governance structure to ensure just a few key points.    After all, prevention is better than cure.

 

How You Define Success Determines Your Results

“What is success? How do you define it in your current role?”

It was a simple question.

I asked this question of the room in general. I expected multiple replies from the all the executives in the room.

Then, I realised that none would be forthcoming.

A number of cultural factors were at play. The boss was in the room. No one wanted to be seen to be on the wrong track.

I had only 45 minutes to deliver some breakthrough insights to the group. Many people had flown in for the one day conference from distant locations.

My help had been enlisted by the ‘boss’ to get his team to lift the game. I better deliver what I had signed up for.

I had prepared my keynote presentation. The facts, the figures, the frameworks all stacked up. It could all be neatly delivered – well enough to justify my fees for the speech.

But, the audience were simply too ‘disengaged’ due to presence of the ‘boss’. Obviously, I was not fully aware of this dynamic – or, I would have thought twice about the engagement. Life is too short to take assignments with no probability of success.

Yet, there is always a way to succeed in every situation. Especially, if we think broad and deep.

But, the time was running out. I had to think quick. I had to think on my feet. Was it possible to send the ‘boss’ out of the room?

Would it have been possible to negotiate that he stay out of the room in the first place? No.

Then, it would be impossible to send the ‘boss’ out of the room.

Then, what else could be done?  What was the right way to proceed?

I decided to change tack on a short notice.

I asked the audience to divide themselves into groups of 8 individuals and introduced a simple supply chain game. I improvised some gaming aids.

The rules were very simple to understand the execute. Each group was to play the game three times, and note down the results.

I asked for volunteers to come up and share their experiences from the game. There were many enthusiastic volunteers. They even linked the learnings to their work. They saw things that no one else did. Their were ecstatic by the end of the gaming session – and not just from the games.

I asked three group leaders, with one key point each, to stay on the stage. They expanded on their key points. They talked about why these points were important to their business. They talked about what changes could be made to the business from next day itself. They were enthusiastic, knowledgeable and on the right track.  They started making points that linked up with my presentation.

I flicked my presentation to the last slide – where these same three points summarised the entire presentation.

The group leaders had already delivered what I had signed up to do. There was a thundering applause from rest of the audience.

What is Common Between Enron and Bitcoin?

I was at a Melbourne Cup luncheon yesterday, and someone asked me why I do not write about Bitcoin.

On my mobile, I showed them a paragraph from my book THE 5-STAR BUSINESS NETWORK written in 2013, where I talk about the emerging Digital Currency Networks.

But the truth is that given the attention Bitcoin has garnered over the past 5 years – I have barely written anything more on it. During the period the price of Bitcoin has been very volatile, and every move has been accompanied with millions of words written by the mainstream press as well as the more respected blog writers.

Take a look at the 5-year graph below:

The value of a single bitcoin rose from nearly 0 in 2016 to over 25,000 AUD in late 2017. Since then it has been very volatile, now relatively steady in the range around AUD 9,000 mark.

Lots of people came on TV and explained all the reasons why it was where it was that point in time.

Braver people made predictions too. Some even proved to be right for a period of time. Some of those reasons sounded even plausible.

Many people asked me for my opinion, and I always referred them to Enron. I explained that around the start of the century when Enron was in a similar place, people in parties would ask my view on it.

Enron was the darling of the quick buck brigade at that time. Some people even made money on it. Much more money that anyone would ever make by flipping houses, or companies.

But there were at least two big reasons I did not offer an opinion:

  1. I never give any investment advice, or offer an opinion that could be construed as an investment advice.
  2. I did not understand Enron

Many friends who knew that I scored the only 100% mark ever in the sloggiest finance course in my MBA would not believe either of those too reasons. And, they would press me for an opinion. Perhaps they had money riding on it.

Some, the wiser lot, even took my unwillingness and inability to offer a point of view as a sign, and made the decision which turned out to be right for them. A few even thanked me. Yet, I claim no credit for saving them a buck, or two.

I was merely stating a fact –

I Don’t Understand It.

And, that is all I have to say about the Bitcoin.

If you want to know about more things that I do not understand – feel free to offer suggestions.

 

Information age thinking needs information rich leadership

Boards always ask the hardest questions. That is why these gentlemen (and ladies) get to be on the boards. They know just the right questions to ask at the right moment. Towards the end of this blog I will relate my recent experience with one such question.  They may not know the answer, but they know that they are facing fundamental disruption.

And, they take their roles very seriously.  Sometimes, more so than the management.

In their eternal quest to continued effectiveness, boards face two fundamental set of choices:

(c) GLOBAL SUPPLY CHAIN GROUP

On one hand, they can massage the quarterly (or monthly, or annual) numbers and pretend that the results are much better than the actual results. A temporary high can be achieved month after month, quarter after quarter, year after year till the fiction can be no longer upheld.

Then you end up losing a tremendous part of your market value in a short period of time. While this story is all too common, the most usual alternative is not pretty either – read the story I recount in this blog post.

So why do many companies resort to massaging numbers? Are they not aware of the consequences? Or, are they just hoping to kick the can down the road till the next market explosion?

One of the reasons is clearly hard nature of the other side of the road.

To achieve fundamental disruption you need to apply relentless thinking.

Source: Unknown

But clearly thinking is not enough. There are already enough strategists who have done nothing else but thinking (and writing what they think).

 Action requires confidence

If you are wondering why so many of strategists’ reports just gather dust on office shelves – the real answer is simple. Lack of confidence.

In what?

Confidence in the findings, as well as, in the ability to implement the recommendations. After all, by now we have a generation of advisers who have made nothing but slides all their lives. Most practitioners have serious issues with that.

GLOBAL SUPPLY CHAIN GROUP

Source: THE 5-STAR BUSINESS NETWORK (www.5starbusinessnetwork.com)

Fundamental Strategic Flaw in Most Disruptions

Most strategies fail to foster confidence because they are based on industrial age thinking. You cannot fault the managers. Even the best business schools continue to teach outdated industrial age thinking today. And, in the rough and tumble of the real world, very few managers have time to think and work out that they have been taught an outdated business thinking process.

I have written many blogs on the difference between the industrial age thinking and the information age thinking, so I will not repeat entire blog posts here. But I will put in one simple slide to highlight the difference:

Source: A Fiduciary Board Report – The Future Of Business In The Age Of B2B Networks,

(https://globalscgroup.com/onlinestore/product/a-fiduciary-board-report-the-future-of-business-in-the-age-of-b2b-networks/)

So while leaders talk about disruption, there actions remain embedded in traditional thinking. Fresh thinking is even harder than traditional thinking.

Not just that, there is a new kind of leader that is required for disruption. For strategists data is everything – it allows them to focus on the select few things that matter.

Information age thinking needs information rich leadership.

Supply Chain CEOs think differently. They are able to focus on the entire B2B network simultaneously – both on the demand side, and the supply side. And they know which levers to pull when to make them match in real time. My book THE 5-STAR BUSINESS NETWORK covers the nitty gritty in a great deal of detail. But here are the five key levers in a nutshell.

Source: THE 5-STAR BUSINESS NETWORK (www.5starbusinessnetwork.com)

 

My next book THE SUPPLY CHAIN CEO will cover scores of case studies and practical examples of the difference, and how you can apply these techniques in your company.

Before, I stop penning this blog, let me highlight the question that the board asked.  The question was – Why can’t we do both the things together?

It is a great question, and I am still thinking of the answer.

I will answer it in my next book THE SUPPLY CHAIN CEO.

Why Almost Everybody is Missing the Most Important Point in Their Solution to Amazon’s Threat to Australian Retailers

Yesterday (on 2nd November 2017) I happened to briefly glance at the Australian Financial Review – the key finance newspaper in this country while I was waiting in the lobby for a meeting. No more do I  subscribe to this newspaper,  because it appears to be growing more and more out of touch with business reality, and becoming more a shill for vendors with deep advertising budgets, and small brains.  Its content  in terns of financial and economic news is excellent, but somehow the journalists seems to miss the major shift in the business models to B2B Networks.

Taking a Sword to Fight a Nuclear Missile

Yesterday’s newspaper seemed to be predominantly dedicated to a conference on e-commerce related subjects. I do not remember the specific topic of the conference, and it does not even matter because the entire debate was centered around Amazon’s entry into Australian market place, and the threat it poses to the Australian retailers and businesses.

Indeed, the organisers, and the newspaper, had identified the burning issue of the day for Australian businesses. Looking at the issues, I almost thought of subscribing to the newspaper again.

But a little more unpacking of the pages revealed that almost all the solutions on offer were marketing and sales related, or new age technology related.

Nothing beats a carefully crafted supply chain strategy, executed with precision and flexibility - especially for business transformations in dire circumstances. This point cannot be emphasised enough.

What people forget is that Amazon’s success is even more dependent on its incredible supply chain.

Fighting this successful behemoth without an equally effective supply chain is akin to deciding to fight against nuclear missiles with swords.

Are Australian Retailers Being Led Down A Rosy Path in Their Response to Amazon's Entry?

Most people still do not even know what supply chain really means. If you doubt me – just watch the short (1.5 minutes) video below, and conduct the experiment with 10 people you know:

 

 

Lest I leave you with a wrong conclusion, I am not deriding marketing and technology solutions, because they do have a place in the overall campaign.  But, if you get an impression from the newspaper (or the conference that seemed to dominate yesterday’s paper) that somehow you are going to outmarket Amazon just using such solutions – you better think again.

Nothing beats a carefully crafted supply chain strategy, executed with precision and flexibility – especially for business transformations in dire circumstances. This point cannot be emphasised enough.

I have written extensively in many other blog posts on how to do just that – all you have to do is explore a bit in the categories and tags on the right of this page. Some of the titles from over the year are in the image on top of this page.

For real leaders, who want to make substantial and deep positive impact – I do recommend my book The 5-STAR Business Networks.

If you have the budget, it is also worthwhile asking for a workshop based on the same material – but we only have limited slots, and already have a big backlog for that.

The Newest Way to Make Your Business Network Great

In his book The 5-STAR Business Network (http://bit.ly/5-STARBN), Vivek Sood mentions the concept of synchronicity, and focus on Carl Jung’s perception of it. The concept of synchronicity has a specific definition in Carl Jung’s mind.

For him, it is a causal connection of two or more psycho-physic phenomena. He started to use this word in the 1920s to describe two or more casually unrelated events happening together in a meaningful way. Although we could write pages on this concept, a short definition would be a coincidence that is not senseless. Carl Jung observed this phenomenon on a patient for the first time.

A patient dreamt about a golden scarab, and the next day, the same insect hit his cabinet’s window. The question that comes up with this kind of situation is: Was the relationship between the events random or was there some hidden force?

The concept of synchronicity has evolved through the 20th century and many studies exist about it, with many theories and explanations. However, this is Carl Jung’s thought in which we are interested. Indeed, his vision of meaningful coincidence is what I think happens with business relationships. Synchronicity is what enables our business networks to expand and to create more value.

To pursue his work, Jung started to collaborate with Wolfgang Pauli. This collaboration lasted for several decades, making conjectures about synchronicity. They conjectured that with a link between the apparently disparate realities of matter and mind were existing. Pauli called it a “missing link”.

While accretion and synergy are two other concepts that create value, synchronicity is the best. Indeed, synchronicity provides even more multiplied effects than synergy, whereas we usually think synergies are the best we can achieve.

Global business networks can become very valuable because of synchronicity power. While synergy provides a good value (2 + 2 = 5, whereas with accretion 2 + 2 = 4), synchronicity is the most valuable. Its mathematical principle is described as follows: 2 + 2 = 22. This is the power contained in this concept.

Therefore, you must focus on this concept to develop your business networks and make it more valuable than by using simple synergies or accretion. Visualization, if not faith, is compulsory to be able to understand this concept and make it work for you. Besides, the concept of synchronicity relies on key principles that may not be available for anyone. In fact, it is all about abundance of outcomes based on wisdom, creativity and cooperative effort. This is the cornerstone of the value of synchronicity.

Consequently, business networks are great and work successfully for your business when synchronicity is the main ingredient. This is the most powerful ingredient that can help you build a great business network. However, this is still a matter of coincidences, although they are meaningful. In fact, the economic metaphor that can be utilized for synchronicity strategy is the free networks.

Accretion relies on free markets. When your strategy evolves to improve the outcomes, through synergies, the appropriate term is “managed markets”. Then, the best strategy, which includes synchronicity, leads to free networks, which is much more significant and valuable than free markets or managed markets.

Thus, step-by-step, you can improve your business strategy, using your business network and gradually implementing strategies of synchronicity. Synchronicity will create the best value through a great business network.

by Anais Lelong

Understanding and Using Resistance – in Business Transformations Using SCM 3.0

19 years ago, when studying for MBA, our Professor in Change Management, Dexter Dunphy told us that Change Management is nothing but management of downside. I understood that his point was every change has a downside – and as a change manager, the most important job you have to do is to understand the downside of the change being proposed, and manage it well enough. When I became a management consultant with a top-tier strategy house after my MBA, I took his dictum to heart, and it served me well through several change management projects. Those who were most affected by change appreciated the fact that the change was managed in a sensitive and caring manner – rather than imposed abruptly.

After a few years, when we started our current boutique consulting house, I started to notice another pattern. This was that many companies could accelerate their change management by skipping one entire generation of Supply Chain Management (SCM) in their efforts to make their businesses more modern. In other words, change management would entail moving from SCM 0.0 to SCM 1.0 or from SCM 1.0 to SCM 2.0 or from SCM 2.0 to SCM 3.0. On the other hand, many companies would want to take up an accelerated path – jumping 2 steps at a time – e.g. SCM 0.0 to SCM 2.0 or from SCM 1.0 to SCM 3.0.

This enabled them to frequently leapfrog their competitors, and transform their businesses rapidly and systematically. This was nothing different from many companies skipping a generation of Microsoft Windows when they upgraded their operating systems – for example skipping Windows Vista and jumping from Windows XP to Windows 7.0. The reasons were different, yet the methods were similar.

While change management entailed managing the downside for those who were affected by change, business transformation was more about understanding and managing resistance. By now, downside management has already become a big enough industry – just look at the number of large outplacement consulting houses, HR consultancies, and the booming business they do through the ups and downs of business cycles. Business Transformations will lead to a second boom in these.

If a business keeps up with the SCM evolution and moves with it, there will be a greater need for leadership training, corporate cultural adjustment, collaboration training and less outplacement and redundancies. And, there will be a need for understanding, managing and using resistance to further business transformation. What is the nature of resistance? What is the reason? How to identify 4 different types of resistance? How to use resistance to accelerate positive business transformations? That will be the topic of my next blog.

Asian Banker Summit 2015 – Connecting Finance with Supply Chains

On 14 – 16 April 2015 in Hong Kong Convention and Exhibition Centre, Hong Kong, nearly 2000 top bankers and other professionals from all over the world are going to congregate to discuss the future of finance in business and society. I am speaking in two panels –  the opening leadership dialogue around 9.30 or so:

The Supply Chain & Financial Performance Conference Opening Keynote Session

Welcome keynote Foo Boon Ping, Managing Editor, The Asian Banker

Opening keynote Alan Bollard, Executive Director, APEC Leadership dialogue

Global supply chain amidst changing economies Rapid increase in trade has occurred both in goods and in services. Though at the current stage, the trends of globalization and the commodity cycle seems to be declining. Gone are the days of double digit growths and replaced by a more modest and sustainable one. Why has this happened and how is this affecting the global supply chain?

  • Multilateralism and trade regionalization against the global backdrop
  • Reducing barriers: Challenges arise from the trade shift to a low cost but more protectionist country?
  • The consequence of competitiveness rebalancing for countries around the world

Speakers/panellists:

Robert Yap, Executive Chairman, YCH Group

Paul Bradley, Chairman and CEO, Caprica International

Vivek Sood, Chairman and Managing Director, Global Supply Chain Group Moderator:

Foo Boon Ping, Managing Editor, The Asian Banker

 

I am also speaking at 15.30 on another topic:

How banks and financial institution are disconnected from their clients Post the great financial crisis, clients have moved rapidly to re-configure their business models into B2B networks of supply chains. Most banks and financial institutions have totally missed this rapid transformation and are struggling to stay relevant in the modern supply chain context.

  • What are the key points of failure?
  • Why are clients unhappy with the banks?
  • What can banks do to recover their position as a trusted advisor in the modern supply chain context?

Featuring: Vivek Sood, Chairman and Managing Director, Global Supply Chain Group

 

Here is a short one minute video introduction to my speech: If you are already attending the summit, or are interested in these topics – I look forward to seeing you at the summit.

 

A Great Man Knows His Own Limitations

This picture prompted me to write the blog post. Like many other people, I am a great admirer of Steve Jobs – his integrity, his passion and his sense of design.

Almost single-mindedly he twice created a company that eventually became bigger than the economy of Spain (and many other countries).

Having grown up away from computers, I personally experienced his genius much later in my life than most people did; only when I installed a very expensive and clunky hard drive based music system in one of my cars I found out in a few months that his company had released a much more compact, mobile, versatile, far superior iPod, which made my costly, and clunky install redundant.

But today, when I reflect – almost every technology I use on daily basis has his finger prints on it – Microsoft Word, Windows, Android Phone – all have ideas inspired by him. It was his misfortune that ‘the look and feel’ was something that could never be patented – shows you how useless the patent laws really are when they protect what is not worth protecting and give no protection to what is worth protecting the most.

When I wrote my book The 5-STAR Business Network I used Apple as a shining example of the first star – Innovation. The collaborative approach to innovation that Steve Jobs pioneered, and that is epitomized in the quotation above was worth emulating.

Admittedly, his is not the only company that does it – his company just used to do it better than anyone else. Using a business network of suppliers, suppliers’ suppliers and collaborators to co-create a product in far less time than anyone else could have created was a work of a genius.

He stood the Edison and Tesla model of innovation on its head. And, even Ford could have learnt a few things from him. What surprises me most is that despite the overwhelming evidence and a clear role model – why most companies still cannot get their act together when they sit back to create products that their customers would worship.

Why do they still settle for shoddy GM cars, or pills that do more harm than good.

I will end this blog with a quotation from Steve Jobs’ biography by Walter Isaacson:

“Because he believed that Apple’s great advantage was its integration of the whole widget – from design to hardware to software to content – he wanted all departments at the company to work together in parallel. The phrases he used were “deep collaboration” and “concurrent engineering”. Instead of a development process in which a product would be passed sequentially from engineering to design to manufacturing to marketing and distribution, these various departments collaborated simultaneously. ” Our method was to develop integrated products, and that meant our process had to be integrated and collaborative”, Jobs said.

He called it ‘deep collaboration’ – and we call it Supply Chain 3.0. Hopefully, we will have a lot more time to put it into practice. This tribute to the great man has been cooking up in my brain for a long time. The world is a much better place, for he was in it for a few brief decades. You cannot say that about too many people.

Disclaimer: I never had, and do not currently own, any shares in Apple.

 

Weekend Golf Humour – The Gospel According to St Titleist

On a rainy Saturday, here is something to cheer up all those suffering from withdrawal symptoms (courtesy of my colleague David Ball):

1. Eighteen holes of match play will teach you more about your foe than 18 years of dealing with him across a desk. — Grantland Rice

2. Golf appeals to the idiot in us and the child. Just how childlike golf players become. This is proven by their frequent inability to count past five. — John Updike

3. It is almost impossible to remember how tragic a place the world is when one is playing golf. — Robert Lynd

4. If profanity had any influence on the flight of the ball, the game of golf would be played far better than it is. — Horace G. Hutchinson

5. They say golf is like life, but don’t believe them. Golf is more complicated than that. — Gardner Dickinson

6. If a lot of people gripped a knife and fork as poorly as they do a golf club, they’d starve to death. — Sam Snead

7. Golf is a day spent in a round of strenuous idleness. — William Wordsworth

8. If you drink, don’t drive. Don’t even putt. — Dean Martin

9. If you are going to throw a club, it is important to throw it ahead of you, down the fairway, so you don’t have to waste energy going back to pick it up. — Tommy Bolt

10. Man blames fate for all other accidents, but feels personally responsible when he makes a hole-in-one. — Bishop Sheen

11. I don’t say my golf game is bad, but if I grew tomatoes they’d come up sliced. — Arnold Palmer

12. My handicap? Woods and irons. — Chris Codiroli

13. The ardent golfer would play Mount Everest if somebody would put a flag stick on top. — Pete Dye

14. I’m hitting the woods just great; but having a terrible time getting out of them! — Buddy Hackett

15. The only time my prayers are never answered is playing golf. — Billy Graham

16. If you think it’s hard to meet new people, try picking up the wrong golf ball. — Jack Lemmon

17. It’s good sportsmanship to not pick up lost golf balls while they are still rolling. — Mark Twain

18. Don’t play too much golf. Two rounds a day are plenty. — Harry Vardon

19. Golf and sex are the only things you can enjoy without being good at either of them. — Jimmy DeMaret

20. May thy ball lie in green pastures, and not in still waters. — Ben Hogan

21. If I hit it right, it’s a slice. If I hit it left, it’s a hook. If I hit it straight, it’s a miracle. — Anon

22. The difference between golf and government is that in golf you can’t improve your lie. — George Deukmejian

23. Golf is a game invented by the same people who think music comes out of a bagpipe. — Lee Trevino

24. Reason they call it golf is cuz all the other four-letter words were taken. — Woody Woodbury

25. The No. 1 Golf rule you MUST follow: take the car keys out of your golf bag before you throw them into the creek.

 

There is one serious note to conclude this post. Our company is sponsoring a 54 hole-one day charity event run by . No obligations, and please, please, do not feel compelled – but do consider looking at this link, playing, participating, sponsoring, or donating as little as 2 dollars. It is for a good cause, and many drops make an ocean. Intellectual disability affects around two to three per cent of the population in Australia. Anne didn’t choose to be like this. But you can choose to help people like her. Join hands with us and do our bit for the community! Investing in community building is an important aspect of a socially responsible supply chain. Seize this opportunity to accumulate goodwill and better yet, give people with intellectual disability the chance to shine through sport.

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