Now that the importance of talent to a Supply Management organization’s success is well understood, an organization needs to know how to get started on its talent management journey.
Based on the collective insights on talent management brought to you by SI over the years, which includes some great insights from the recent Hackett Group Best Practices conference, some key starting points are:

1. Admit You Have a Talent Management Problem
   Even if the organization is world-class and has a team filled with extremely talented individuals, it still has a problem. First of all, its top talent is being recruited daily and eventually one of its competitors is going to make an offer that each of its top X talented individuals are not going to be able to refuse. Then it will have to deal with the fact that the only pool of talented resources out there with the education, experience, and expertise needed are already employed by competitors. So even if the organization doesn’t have a problem today, it will tomorrow.
2. Make Supply Management Attractive
   If you want raw talent to choose Supply Managemnt as a career path, it has to be attractive. If Marketing or Finance or Legal gets all the glory, that’s where the talent will go.
3. Put a Hire-to-Retire Plan in Place
   Not only does raw talent have to see Supply Management as an exciting career option, raw talent has to see Supply Management as an exciting career option in your company with a well defined, long-term, growth plan that can lead all the way to the C-Suite.
4. Make Cultural Diversity a Core Value
   Cummins, Disney, and HP understand the critical importance of a diverse team — your organization should too.
5. Talent Comes First
   Great leadership is important, but team success is more important. Make sure leadership puts the good of the team and the success of their employees above their own. That’s how a world-class Supply Management organization is built.

And while this list of starting points certainly isn’t exhaustive by any stretch of the imagination, it will put the organization in the right mindset to formulate its talent acquisition, retention, management, advancement, and retirement strategy and ensure talent is put first in the H2R (Hire-to-Retire) strategy, which is much more than just another metric of a world-class organization.

The first post of the series discussed the emerging focus on talent, why top talent, and, more importantly, engaged talent, is important and why an average organization can’t find top talent. The second post discussed some of the insights on the talent topic that were put forth by Cummins, Disney, and Pitney Bowes at the recent Best Practices Conference put on by the Hackett Group. This post will cover some additional insights from HP and the Hackett Group and the final post of the series will outline some key first steps to help an organization start on its talent management journey.

When HP realized it needed to undergo a Finance transformation to become a world-class financial organization, it also realized that a critical component of migration would be its people and that a highly engaged, globally deployed workforce would be a critical success factor. It instituted a people development culture that focussed on reaching out with the current team (through an ambassador program), hiring the best (through a unified on-boarding process), developing its talent (through a centralized people development portal), mentoring its talent (through a high potential program), and effectively managing its talent (across groups within finance and the company as a whole). This helped it to create centers of excellence for high-value work delivery.

The Hackett Group, both in their presentations and in my private conversations, emphasized not only the critical nature of top talent in the Procurement / Supply Management organization, but the importance of understanding the nature of the talent market. What many companies don’t realize is that talent is a market, like IT, but unlike IT, where you have new vendors with new technology popping up every day, in Procurement, you don’t have newly trained professionals entering the talent pool every day because the vast majority of colleges and universities do not produce talent with the education and expertise necessary to succeed in today’s next generation supply management organization. This means that the organization has to have a game plan to recruit and retain raw talent that can be taught the skills, and a methodology program in place to teach the talent the skills, which should include (virtual) “classroom”, on-the-job, peer-group, and mentorship components to get the talent up to speed. It also means that it has to market Procurement as an attractive career opportunity and have a corporate succession path that allows supply management personnel to move out and about in the company. If business grads still think, like the older generation, that Supply Management is where you go to retire, it will be very hard to recruit raw talent with a high EQ.

So how does an organization begin a talent management journey? That’s the subject of tomorrow’s post.

This post is going to review some selected insights on the talent topic that emerged during the recent Best Practices Conference put on by the Hackett Group. In particular, it is going to focus in on some of the key points made by Disney, Pitney Bowes, HP, Cummins, and The Hackett Group.

At Cummins, which has more employees outside the US, diversity is a core value. The importance of diversity in a global supply management and / or services operation cannot be understated. A diverse team is able to understand and interact with top talent from different cultures across the globe, which allows the organization to draw from the global talent pool, and not just the local talent pool in its home country or the country of its outsourced service center. And a diverse team is a powerful team. Cummins Global Business Services, which manages IT, HR, Finance, & Customer Care, and which is in the process of adding Procurement, hass less than 950 employees but manages 670 Million in Global spend. That’s more than 670K of spend per Cummins FTE. Now, the number drops to about 270K when you include the resources utilized in partner and supplier organizations for local support, but considering the wide umbrella of services support, that’s still quite impressive. Especially when you consider that more employees are outside the US than in the US and many are in low cost locales (like India).

Disney is a global operation, it needs to be global, and it understands that it needs to be global. As a result, Disney puts a great emphasis on staffing its international sourcing offices with local talent. Disney knows that the best way to identify talent is to have talent in the first place and only people who speak the same language (and understand the culture) are going to truly know the difference between who looks good on paper and who will work good in the organization. There is a strong cultural component to EQ.

At Pitney Bowes, employee engagement is one of the four key metrics that are used to measure organizational performance (with the other three being customer service, financial performance, and innovation). Furthermore, it is one of the four key components that must be mastered to be best-in-class (with the other three being structure, performance, and technology). As a result, they put a lot of effort into defining roles and responsibilities with a clear career path that not only made it easier for HR to find, and hire, raw talent, as they made Supply Management an attractive career option, but made it easier for them to identify what the organization needed to do in terms of training and knowledge management to improve its talent pool.

Tomorrow’s post will address some selected insights from HP and the Hackett Group and then Part IV, the final post in the series, will address some of the first steps an organization will need to take on its talent management journey.

Although it was not a major theme of this year’s Best Practices Conference by the Hackett Group, it was nice to see that a recurring theme in many of the presentations was the importance of top talent in the successful execution of strategy and growth. As you may recall, last month SI put out an open call for thought leadership on three issues and one of them was supply chain education as there is a lack of talent in supply chain (relative to the need). Furthermore, the problem is only going to exacerbate as time goes on if it is not effectively addressed.

In particular, the importance of top talent was mentioned as critical in presentations by Disney, Pitney Bowes, HP, Cummins, and The Hackett Group and emphasized in private discussions I had with Pierre Mitchell and Bob Derocher. What’s really interesting to note is that while not every company that presented was World Class, Disney, Pitney Bowles, HP, and Cummins, in at least one organization, are world class by Hackett Group metrics — which only serves to drive home the reality that employee engagement is a critical part of organizational growth. As per Hackett’s Myths and Realities of Global Growth, not only are talent management leaders 16X more likely to link employee engagement to business impact, but there is 21% higher employee engagement in double-digit growth companies when compared to single-digit growth companies.

However, as pointed out in Sourcing Innovation’s recent posts on why you can’t find top supply management talent and how you find top supply management talent, talent management is more than cobbling a wish-list of desired experience, education, and expertise and throwing it over the wall to HR. It’s a well thought out strategy to identify, hire, retain, and retire that includes careful consideration of growth, career path, and training to insure that you get the most out of each employee from the time they step in the door until the time they step out for the final time after their retirement party. This requires a well thought out strategy that should incorporate some of the lessons learned from your peer group. Parts II and III will discuss some of the key points raised by the presenters and why they are important and the final Part will discuss how a Procurement Organization goes about getting started on its talent management journey.