Category Archives: Talent

What are The Drivers of Procurement Excellence? Part II

Yesterday’s post discussed the recent article in the Supply Chain Management Review on “The Drivers of Procurement Excellence” that discussed seven megatrends that are currently exerting their impact on the global procurement function which the authors claimed to be driving procurement excellence by way of the pressures they are exerting on procurement departments across the board. While I agree that all of the megatrends are driving the need for a greater procurement function, and while I believe that each of the five elements that they listed as being core to a procurement transformation are necessary, I do not think that megatrends drive procurement excellence.

As far as I’m concerned, procurement excellence is driven by one thing — and one thing alone. Talent. People drive excellence — and although this excellence generally needs to be supported by kick-ass processes and kick-ass technology, excellence is driven by people first, process and technology second, and external influences third.

Face it, as the SCMR article deftly notes, the skills and capabilities required in today’s procurement function are vastly evolved and nearly unrecognizable from those of 10 to 15 years ago and no technology or process is going to come close to meeting a fraction of the requirements, or deliver the results today’s procurement functions need, without a very talented individual at the helm. An individual that is an experienced, collaborative, customer-focused market zen master team player who is driven to succeed. An individual that is adept at analysis, skilled at strategy, and focussed on sustainability and who will seek out the knowledge she needs, consult with experience, and innovate all the while. A new breed of professional who is a jack-of-all-trades and master of one — spend and supply management!

Of course, given that there’s a talent crunch, and maybe even a talent war, for A-level procurement professionals that has already progressed to the point that only 11% of executives are confident that they will be able to recruit and retain the needed talent they need, attracting the talent you need might be easier said than done. That’s why true leaders will take their intelligent, hard-working, driven B-level players and provide them with the training (possibly through industry-leading certifications such as the SPSM offered by Next Level Purchasing) and job experience they need to become A-level players and kick ass. (And when you consider that, as pointed out in this Supply Excellence piece, A players, who only cost 40% more, often deliver an overall return of 100% or more in a given year, the payback on talent acquisition and development is almost exponential!)

So hire the best, train the best, and retain the best … and you will achieve procurement excellence, because the best will accept nothing less.

A Sense of Urgency is a Good Thing

Strategy + Business recently published an article that transcribed part of an interview with John Kotter of the Harvard Business School on why urgency in the face of change matters. Since most executives would agree that change is no longer a luxury, but rather a necessity, leaders need to help their companies cope with the turmoil of transformation.

Kotter, in discussing his new book “A Sense of Urgency”, indicates why a sense of urgency is important and what it takes to maintain that sense of urgency in a corporation. Kotter claims that a sense of urgency must be pursued relentlessly because a sense of urgency, and a sense of urgency alone, is the only way to eliminate the risk of complacency.

So how do you build that constant sense of urgency? You start by driving an organizational culture built on the belief that change is not only desirable but something that is to be pursued relentlessly. The steps Kotter recommends are to:

  • allow outside influences in,
  • encourage change on a daily basis,
  • look for opportunities that arise in a crisis, and
  • adeptly manage the “no-no’s” — the employees who insist that change efforts won’t work.

Why is change so important? Things have changed drastically since the end of WWI. Consider the quote from a DuPont executive who said that “After World War II we had a product line that was technologically relevant for 20 years. Nowadays, none of mine last five years.” As soon as your product hits the market, it’s already in the obsolescence phase of its life-cycle. Success in today’s market is growth, not holding your own. And, the newer, smaller companies that succeed are the ones who realized that change must be the driving force of their business plan and day-to-day operations.

What needs to happen to get change moving? According to Kotter, you have to take the Gerstner approach. When Louis Gerstner became CEO of IBM in the early 1990s, the company was hugely complacent. And he told everyone, “We’re going to win. We might not win the series, but we are going to win the next game. We aren’t going to take days off — that’s not how you get there. That’s not how you make big things happen. I’m not asking you to work 200 hours a week and die. What you’ve got to do is take all the junk that you’re doing right now — and trust me, you’re doing lots of junk — and get rid of it, purge it, delegate it, whatever.” Once you do that, all of a sudden there’s more time to pay attention to opportunities and hazards and to do that consistently, without fail and without letup.”

First out of the Gate: Bob Ferrari

Everytime I launch a new cross-blog series, I always wonder who will be first out of the starting gate, trying to be the first to capture the readers’ minds and hearts. This time it was Bob Ferrari of Supply Chain Matters and The Ferrari Group who posted his Seven Grand Challenges for Supply Chain Management yesterday.

In his first post, he lays out his seven challenges and tackles the first three head on, promising us two more posts on the last two challenges before the week is up. Bob’s Seven Grand Challenges are:

  1. Ubiquity of Portable Computing Leading to Real Time Sensory Networks
  2. True Supply Chain Business Intelligence and Decision Making Tools
  3. Managing the Explosion of Data and Information Needs in Global Based Value Chains
  4. Managing Supply Chain Risk Management on a Global Basis
  5. Who Assumes Ownership for the Extended Supply Chain?
  6. Articulating the Value and Consequences of Supply Chain Directly to the C-Suite
  7. A Global Shortage of Talent and Skills in Supply Chain Management

I really like #2, because it meshes with my seventh challenge of Opportunity Analysis. Today’s supply chains are filled with untapped opportunities, and you’re going to need good business intelligence and decision making tools to find them. And we’re definitely on the same page with #4! Risk is everywhere, and supply chain disruptions are still rising rapidly, due, primarily, to poorly managed, if not unmanaged, risk.

I’m not convinced of #1, #3, and #5 though.

1. I can certainly see the value of Real-Time Sensory Networks and systems self-updating as soon as product is detected in area B when it was in area A, but I don’t think this is going to add that much efficiency, especially if we had integrated physical, financial, and information-based supply chains where all it took to accept a complete shipment was logging into the shared system and checking “received”. Plus, I don’t want to see us become over-dependent on technology. What happens on that fateful day, which always happens eventually, when it fails and no one knows how to do it manually?

3. I believe that managing the data explosion is an IT challenge, because it goes well beyond just supply chain and supply chain systems. Data explosion is everywhere, and it’s IT’s job to build the databases, marts, and warehouses we need to manage it. It’s Supply Chain’s job to select from the best systems out there. Bob makes some great points in his post, but I’m not sold.

5. I think this is a great question to ask, but it’s not really a challenge, because, in my view, it’s trivial to answer. The CEO. Today, your company is your supply chain. Sure you have a CSCO who’s job is to manage the chain on a daily basis, but the buck should ultimately stop with the CEO. Nonetheless, I’m waiting to see what Bob has to say on this one …

And #’s 6 and 7 certainly have me thinking!

If we go back to the Top Three challenge, David Bush of e-Sourcing Forum and Iasta proclaimed that the top-three challenges of supply chain today were Adoption, Adoption, Adoption. This is a cry I’m hearing from e-Sourcing and e-Procurement companies across the board. And even though this is the perfect economy for those providers, because e-Sourcing and e-Procurement software is about the only way to reign in your spending during the deflationary/slowdown/recession economy we’ve been in for a while now, the cry only seems to be getting louder. Maybe it is a longer term challenge than I give it credit for. I’m anxious to see what Bob offers up on this one!

I’m definitely on board with #7! If you check out the talent category here on SI, you’ll see that I’ve essentially been whining about this problem since day one! It’s a huge challenge right now, and it’s going to be for at least the next five years. However, history tells us that talent shortages tend to resolve themselves over a ten to fifteen year window. Once demand gets high enough, and stays high enough for a few years, students, anxious to have a job when they graduate college / university, see that as a good career choice and take educational paths that will prepare them for that careeer. Young professionals ready for a career change go “back to school” (through night courses, part time programs, private programs, etc.), prepare themselves for that industry, and move on in. Simultaneously, the industry, desperately short on talent and needing to get through the day, re-engineers its processes, automates as many tactical functions as it can, and learns to do more with less. After ten to fifteen years, the talent shortage drops to a manageable level. And I’m looking at a twenty to twenty-five year window with these challenges. It’s definitely a major challenge … but is it important enough to knock, say, GHG Tracking and Reduction off of my list? I don’t know. But I’m definitely anxious to see what Bob has to say on this one too!

The Importance of the Job Description to your Talent Management Strategy

A few months ago I brought you a post on Purchasing Certification as a Savings Strategy that described the significant ROI that a company can expect to obtain by getting their entire purchasing department trained and certified. A department-wide certification ensures consistent processes and results across your purchasing team and insures that your overall performance, and, more importantly, whether or not you meet you savings targets, does not rely solely on a handful of star performers. Although it’s true that a star purchaser will often save three, five, or even ten times as much as an average purchaser, just like your star salesperson will often sell three, five, or even ten times as much as your average performer, betting the company on a single individual is akin to betting on a horse to win at the track. Not a strategy I’d bet my company on.

The post served as another example of how critical talent management is to today’s company, and today’s purchasing / procurement / supply management department in particular with commodity, raw material, and energy prices rising across the board in a stagnant economy where even holding prices steady might not be enough to keep a company in the black. Talent management, which starts with the acquisition process and extends to the eventual retirement of your talent, is a complicated topic and includes the marketing strategy you use to convince people to consider you as an employer.

Part of the marketing strategy you use to attract new talent is the job description, and even though you might not give it much thought, it turns out that getting this job description right is extremely important. As pointed out in a recent Next Level Purchasing (now the Certitrek NLPA) white-paper, an outdated purchasing job description can have undesirable effects on a company’s talent management strategy. According to Next Level Purchasing, there are two severe consequences associated with using outdated purchasing job descriptions:

  • an outdated purchasing job description is likely to attract a purchaser who possessed the skills necessary for succeeding in previous years, but who does not possess the skills necessary for success today
  • an outdated purchasing job description can set the bar too low for the standard skill levels to which your current professionals will aspire

As a former R&D director, I can attest to the importance of a good job description. Without one, your probability of attracting the right candidate are low. For instance, although I can remember having to sift through fifty to one hundred applications on a regular basis just to find three to five candidates worth an interview even with a good job description, I can also remember more than one occasion where I did not get to write the job description and where I could not identify one suitable candidate among dozens upon dozens of applications. So what did this tell me? A bad job description was very unlikely to yield good candidates and a good job description, which was much more likely to yield good candidates, also served as a good foundation for eliminating those candidates obviously inappropriate for the job without the need for a lengthy interview process.

The white-paper also outlined the important components of today’s purchasing job descriptions, and, like many of the articles that Next Level Purchasing makes available on its website, is worth at least a once-over.

The Purchasing Leader’s Guide to a More Successful Team

Recently, Next Level Purchasing (now the Certitrek NLPA) published “The Purchasing Leader’s Guide to a More Successful Team” that outlined Seven Steps For Improving Skills and Getting Better Results. Noting that many organizations only have one or two superstar team members that can handle the most challenging projects, that a purchasing department should be the organizational center-of-excellence, and that there’s no reason your entire team can’t excel, Charles Dominick, President & CPO of Next Level Purchasing put together a simple seven step process that any organization can follow to improve their team. The document might not cover every possible thing that one could do, but it’s a great start as any department that effectively implements and masters the steps provided will certainly be above average as a result.

The seven steps outlined by the document are:

  • Document Departmental Goals
  • Identify the Necessary Skills
  • Develop a Methodology to Assess Skills
  • Determine Skill Gaps
  • Define a Skills Development RoadMap
  • Improve Skill Levels
  • Measure & Sustain Improvements

They are important because:

  • It’s hard to identify necessary skills without goals.
  • Once you’ve identified the skills, you can identify who should have them.
  • You need to know how competent your people are with respect to each required skill to assess gaps.
  • You need to know what the gaps are in order to identify appropriate training.
  • The roadmap helps you identify which skills are important.
  • Skill level improvements are accompanied by improvements in sourcing results.
  • Measurements let you know how effective each skill level improvement initiative was and helps you select the “training” that is most appropriate for your team.

And you should definitely download “The Purchasing Leader’s Guide to a More Successful Team” because:

  • It gives you some examples of the right way to state measurable goals.
  • It outlines common skill dimensions that you should be sure to consider.
  • It defines three different skill assessment methods.
  • It tells you what’s important when it comes to skill gap identification.
  • It describes five different ways you can prioritize professional development.
  • It outlines different ways you can improve skill levels.
  • It gives you some ideas for measuring skill improvements in a manner that can be communicated to management.