Category Archives: NPX

CBTM #7: Succession Planning – Where the Present Meets the Future


Today’s guest post is from Dalip Raheja of The MPower Group, who declared that Strategic Sourcing is Dead last year and who has returned to give us one of his alternatives.

I’m sure you expect us to say this but it’s worth repeating: Succession Planning has to be part of an overall Competency Based Talent Management (“CBTM”) strategy. We start with the basic premise of Succession Planning which is ensuring that you have sufficient qualified bench strength for key roles in the future. This means that you need to know what your key roles are and the competencies you need so you can determine if you have qualified candidates. By the way, those competencies need to be defined for the future, not today. All of this requires a CBTM strategy to ensure that you have managed the significant risk of not having the right talent when you need it. To further illustrate this point, your Succession Planning process will need to be tightly integrated with your recruiting process to ensure that the right types of competencies are being used to select potential candidates.

If you truly believe that your people are at least one of your critical assets, then why would you not manage your risk of replacing those critical assets, especially when these assets can walk away at will and there really is no expected life of that asset for you to plan around? It would seem to me that the risk of replacing these assets is far greater than any other asset in your organization? Yet we continue to absorb that risk without any mitigation plan? And this is not a risk that you should pass on to your HR partners to manage on your behalf. You should lead this just as you would your overall CBTM strategy and actively use your HR partners as consultants. Please do manage your expectations in dealing with your HR department as most of them are not geared up for this kind of work yet. You actually will be leading them in some cases and become the test bed, and leader, for the rest of the company

Successful Succession Planning necessarily starts with an understanding of what your future competency needs are for key roles and then designs a strategy that encompasses both an internal and external sourcing process. While some of the “high potential” programs do an adequate job of at least identifying some of the replacement candidates, even fewer have a pro-active process in place for their success. “High potentials” cannot be a replacement for a Succession Planning strategy within the context of CBTM. A comprehensive understanding of your company’s long term business strategy is critical to knowing what your future competency needs are going to be. If your company is going to be much more active in the global market than it is today, then your Succession Planning strategy of replacing Joe, who is your most critical employee today with Joe’s competencies, will expose you to significant risk. And if those competencies are not present in your organization, then you will have to start developing them internally and acquire them externally to manage your overall risk.

Let me try and conclude the conversation with some quick summary thoughts on a very complex issue. Succession Planning:

  • must be part of an overall CBTM strategy – the core of this process and the first step is a competency model for the future that is tightly integrated with your company’s long term strategy
  • must be approached as the management of a significant risk of a critical asset and therefore must be sponsored at the highest levels and directly led by you, not HR
  • cannot be replaced by a “high potential” program
  • must incorporate both internal and external sourcing strategies
  • is not a periodic event but an integrated, pro-active, ongoing process
  • has a retention programs as a key component

A successful Succession Plan as part of an overall CBTM strategy is key to sustainable value creation. It will also position you as an innovative leader in your company and position your organization as adding value beyond the confines of a narrow functional definition. Your organization will also be looked at as a leadership factory where other executives come to pluck the best candidates to seed their organizations.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.

CBTM #6: An Annual Necessary Evil — The Performance Evaluation


Today’s guest post is from Dalip Raheja of The MPower Group, who declared that Strategic Sourcing is Dead last year and who has returned to give us one of his alternatives.

We all dread the annual performance evaluation process whether we are a Sourcing or Supply Chain employee or a manager. It seems like the same old process year in and year out, used simply to justify compensation increases or not. If the performance evaluation process is part of an integrated talent management program, it doesn’t feel that way. In most cases the measures are tactical in nature and measure activities as opposed to value added outcomes. The measures are seldom tied to the strategic objectives of the company and in many cases drive behavior that is detrimental to achieving those strategic objectives. Your development plan (if there is one) usually lists a variety of training classes you can take individually to improve your individual skill, often ignoring the required organizational competencies that help drive real value for the company. This process should be ongoing and not just annual, but at most companies it is not.

Performance evaluation can be one of the most powerful tools in Competency Based Talent Management (“CBTM”) but it must have a well-defined competency model at its core. It should also be integrated into the other four phases – recruiting, training / development, career management and succession planning. Here is how this should work:

  • Define the role of the Sourcing / Supply Chain organization and the individual job roles in a way that supports the strategic objectives of the company.
  • Determine the competencies (behaviors – both strategic and functional) necessary to be successful in the defined roles. This is your competency model.
  • Use the competency model to:
    • Determine the skills / competencies required when recruiting
    • Determine the skill / competency gaps to drive your training / development program AND the individual development plans as part of performance evaluation
    • Determine the metrics / measures that will be used to drive the performance evaluation process and career management
    • Drive your succession planning

When performance evaluation is supported by defined competencies the process takes on richness for the employees that helps them understand the behaviors (much broader than activities) that are required to be successful currently and those required to move forward in their careers. In addition, competency based performance evaluation helps managers / employees to identify gaps in strategic competencies (e.g. communication, collaboration, teamwork, change leadership) which are less “measureable” but are as, or more, important than functional competencies. If evaluating performance is focused solely on building functional expertise, as opposed to the critical business skills that make a successful business professional, then the organization will have a difficult time moving employees into future leadership roles (career management and succession planning).

Performance evaluation must also focus on demonstrated competency, since having competency that is not being utilized is of no value to the organization. As such, competency based performance evaluation should be structured such that employees are incented and rewarded (compensation $$) for acquiring and demonstrating new competencies and managers should be held accountable to ensure that employees do so. If you think about it, competency building clearly helps the employee build their individual skill set but also helps to build overall organizational competency. Competency based performance evaluation will make it easier to differentiate between high performers and everyone else since the evaluation process will be less about “what you know” and more about “what you do with what you know”.

Lastly, a critical outcome of performance evaluation must be an improvement plan. Here again, the focus should be on identifying gaps in demonstrated competencies and creating strategies to close those gaps. The improvement plan should be mutually agreed upon and managers should be measured on creating opportunities for their employees to acquire and demonstrate new skills.

In summary, a well-defined competency model is a powerful tool when used throughout the talent management lifecycle, particularly performance evaluation. If you don’t have one for your Sourcing / Supply Chain organization, it is a necessary investment in your most critical asset — your people.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.

CBTM #5: Fighting the War for Talent – Focus on Career Management!!!


Today’s guest post is from Anne Kohler of The MPower Group and is the fourth in a series of seven posts on Competency Based Talent Management.

We’ve been hearing about the “War for Talent” in the Sourcing / Supply Chain space for quite some time and it does not seem to be improving. In our previous posts, we explored how the lack of a holistic approach to competency based talent management (“CBTM”) is the root cause of the problem. In addition, we have advocated that to be sustainable, CBTM must cover ALL five phases of an employee’s journey through a company — recruiting, performance evaluation, training / development, career management and succession planning.

Let’s focus here on one element – Career management. According to Wikipedia, Career Management is the combination of structured planning and the active management choice of one’s own professional career. While career management should ideally be the responsibility of the individual, it MUST be driven by the organization. To start, employees need to know which skills / competencies are required to be successful today and how those skills /competencies need to grow and develop in order to progress within the company. These can only be defined by the organization and are the foundation for CBTM. A well-defined competency model, which is critical here, can also be used and integrated into the other four phases of CBTM. In addition, individuals need to see the career options (career path) and the expectations associated with moving through the path. How many Sourcing / Supply Chain organizations have actually taken the time to not only define the competencies but also lay out a career path for their employees? Not many. By the way, the first people to leave because of the absence of career management are the people you most want to hold on to — your high potentials. They are off listening to other companies who seem to be able to articulate a career path – can’t all companies do this during the recruiting phase even if it is all smoke and mirrors?

Without a Career Management process in place, you will:

  • lose your best people
  • constantly be recruiting (this is an expensive proposition)
  • never realize the full ROI of your asset (your people) base
  • lose the opportunity to infiltrate (love that word) the rest of the organization with Sourcing / Supply Chain thinking
  • never get beyond tactical contribution (real value comes thru competency growth)

The consequences of ignoring Career Management as part of your talent management program (if you have one) can be devastating to an organization. While the official definition of Career Management places the responsibility with the individual, the organization needs to put the infrastructure (process tools, metrics, mentors, etc.) in place AND drive the adoption and execution of the process. If we look at Career Management as benefiting both the employee and the organization then we MUST ensure that it is happening — tools are of no use unless they are being utilized.

What do you need to do to fix the career management void? Here are a few Next Practice tips:

  • Develop a competency model which allows employees to see their path for success
  • Tie career progression to competency growth
  • Ensure that competency growth is NOT about “what you know” but more about “what you DO with what you know”
  • Link career paths across functions by competency
  • Ensure career management is integrated into ALL phases of CBTM
  • Create a “success culture”, providing organizational mobility and access to new opportunities
  • Provide employees with “stretch” assignments to further competency growth
  • Ensure your organization is the “place to be” to ensure professional growth
  • Provide ongoing feedback and coaching so that employees can grow and take advantage of new opportunities

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.

CBTM #4: Mind the Gap – Training vs Competencies


Today’s guest post is from Crystal Jones of The Mpower Group and is the fourth in a series of seven posts on Competency Based Talent Management.

In our previous posts we talked about designing your talent management program and implementing a recruiting plan. However, these are only parts of a larger Competency Based Talent Management (CBTM) program. You have hired the people you needed. So what? How can you make sure they are integrated into your organization and are able to hit the ground running, creating the optimum amount of impact? Not only do you need to look at training your existing team, you need to create a training program for new recruits as well.

This sounds well and good (and perhaps a bit easy). However, it is not as easy as it sounds. We have heard from many of our Sourcing / Supply Chain peers, particularly at our last NPX, that they are struggling with their training efforts. Training is completed, but the learning is never adopted. So what can they do to change the results?

Adoption brings us back to our vowels (AEIOU). In the past we have talked about the importance of Adoption, Execution, Implementation, Optimization and Utilization in any organizational effort. However, training is just not about the act of learning (a consonant); it is about adopting and implementing that learning to drive business results. Using the vowels ensures that the people being trained start applying what they learned. Implementing the vowels is the key difference between training people and developing competency.

To effectively turn a training program into competency development, you must have a good understanding of your desired needs. This requires that you start with the strategic direction and objectives of the company and what role your organization will play. This will show you which organizational competencies you need and will give you an understanding of the gaps you have within your organization. Now, the closure of those gaps can be tied directly to the company’s strategic direction and the role your organization will play, adding value not just for individuals, but for the company as a whole. Sending 2-3 people at a time to some public seminar designed for the masses may develop individual competency but it is never going to develop organizational competency.

Your gap closure strategies must follow a multi-faceted approach (coaching / mentoring etc.). Make sure your entire approach is rooted in Adult Learning Theory and has experiential learning as its basic tenet. Making people sit through day long lectures with no ability to actually practice the new behaviours and competencies in a safe learning environment is of little value. In addition, the curriculum must include the strategic competencies found during the initial gap assessment. A program consisting of functional or process skills alone is doomed. The strategic competencies must also be integrated into the core process modules so that people know how to actually deploy the new process.

Your training strategies must look beyond the technical skills and focus on the strategic skills needed to be successful like change management, communication, collaboration, and decision making. Oftentimes these skills are overlooked when training, although they are the most important to organizational success. Anyone can learn to use any process and those are the skills most organizations worry about when hiring and training. However, developing strategic skills can take your team to the next level and have more lasting effects on the group. It takes your group from Best Practices to Next Practices.

Developing the right competencies within your organization is not easy. It takes a lot of thought and energy to train and develop your team. Sometimes closing the gap can make you feel like you are trying to build a bridge across the Grand Canyon. If you start by looking at competency development in terms of AEIOU and strategic alignment, you will no longer need to build a bridge across the gap. You will find that your organization will soar.

In our upcoming posts we will continue to address Next Practices associated with the Competency Based Talent Management lifecycle.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.

CBTM #3: Help!!! Recruiting Next Practices Needed!


Today’s guest post is from Anne Kohler of The MPower Group, co-founder and COO.

We have been hearing about Sourcing / Supply Chain organizations which are looking for up to 400 people. How does any company find themselves in a situation where they need that many people all at once? I guess one could blame an ill managed recruiting function but I suspect that the entire Talent Management program (if there is one?) is broken. As noted in our last post, Talent Management has five phases, all of which must be integrated and treated individually and collectively as a system in order to be effective. We advocate that a talent management program MUST be competency based (“CBTM”) to be sustainable and must cover ALL phases of an employee’s journey through a company. In addition, each of these phases must be supported by:

  • A clear understanding of the role the Sourcing / Supply Chain organization will play for the company
  • A definition of the Intended Consequences the Sourcing / Supply Chain function is trying to achieve for its customers / internal business partners
  • Clear goals and objectives for the group which are tied back to corporate goals
  • A clearly defined competency model to support the defined role, intended consequences and goals of the organization

Let’s begin with the first phase which is Recruiting. Keep in mind that having a strong recruiting function is absolutely useless unless you can retain and grow the talent you bring in. This is why CBTM MUST be viewed as a system. Any weak link in that system can find your best people returning to the job market out of frustration. Think about a high potential that is told they are an asset of the organization only to find themselves in a position where they are given little to no training or development, no clear goals or metrics, no career development support or no clear path for advancement. Some asset!! How long do you think that “high potential” is going to stick around? Keep in mind, bringing new people into an organization can be a VERY expensive proposition if they end up leaving in a short time. For recruiting to yield a positive return on investment, the other phases of CBTM must be in place to ensure employee retention.

Some organizations are constantly trying to “find” the right people. In many cases this is because:

  • they didn’t define the right requirements (competencies) up front
  • the defined requirements were not tied back to actual needs
  • they did a poor job marketing (selling) the position and / or the company
  • they found the right people but couldn’t keep them
  • the screening process was conducted by individuals that did not have subject matter expertise (HR perhaps)
  • candidates were not a good culture fit for the company

Constantly trying to find the right people is expensive, as is on-boarding and training new hires. Here are a few Next Practice tips to strengthen your recruiting practices:

  • Understand the role you are expecting your Sourcing / Supply Chain organization to play — Tactical executor? Strategic business partner? Change agent? The role (whatever it is) will determine the competencies required and those MUST be defined
  • Clearly defined requirements that are tied to customer needs / intended consequences and are supported by required competencies
  • A marketing plan that allows you to present your company in the best way to attract the best candidates
  • A screening process that ensures the right functional and cultural fit
  • A rotational program for new hires that may be high potentials but who do not yet know where they fit
  • A process that closely matches candidate competencies with the open position — putting a high-powered Sourcing professional in a tactical buying position will do nothing but frustrate everyone involved (and vice versa) and cause the employee to leave
  • An on-boarding process that gets the new hire off to a strong start
  • Ensuring the other phases of CBTM are in place and being utilized

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.