Category Archives: Talent

What is the State of the Discipline in Supply Chain Talent? Part I

AMR recently released its “Supply Chain Talent: State of the Discipline” report, sponsored by the Supply Chain Council where they surveyed 198 organizations to assess the state of the supply chain management discipline, identify key requirements to support a demand-driven curriculum, and construct the first functional talent attribute model. From their research they drew some interesting conclusions:

  • No two supply chains are alike
    AMR found that very few companies defined their supply chain in the same way and that almost every leader had different plans of control.
  • Leaders view supply chain management as a business discipline
    AMR found that supply chain management is still very engineering centric and that few companies include manufacturing and NPD (new product development) within the supply chain function (and that this is a differentiator among leading companies).
  • Globalization has created urgency
    AMR states that a general flattening and global broadening of supply chain organizations has boosted the need for a more extensive set of skills and competencies.
  • A common supply chain talent model is the foundation for improvement
    AMR states that for supply chain management professional development to evolve into a more universal body of capabilities, industries and academia need to adopt a shared, modern, comprehensive model that incorporates the growing depth and scope of the discipline.
  • Universities have an opportunity to take a leadership role
    AMR states that schools can lead the way in providing more universal supply chain management skill sets and that truly comprehensive programs would gain strong support from the industry.

These conclusions are interesting for three reasons. First of all, they sound very plausible, and the report does a very good job at convincing you they are right. Second, there is fair amount of truth and insight in these conclusions and in the report. But they aren’t quite right. Here’s why.

  • No two supply chains are alike – but definition is not the problem
    The fact of the matter is that every business needs to differentiate itself, which means that every business has slightly different needs, and this means that every supply chain will be slightly different. This makes the problem harder than just a definitional problem.
  • Leaders should view supply chain management as the business – not just a business discipline
    Many business leaders still think their business is what is within the four walls of their company. That’s just not the case anymore for the vast majority of industrial companies. These days, your business is the supply chain you create, and everything should revolve around the supply chain. Accounting tracks the money that flows through the part of the supply chain directly under your control. Marketing markets the differentiating factors you bring compared to competitors with similar chains. Engineering takes the inputs and designs outputs. HR manages the people that make it all happen. And so on.
  • Globalization is the result of urgency – created by market-driven capitalistic need to beat the other guy in any way possible
    We might sell the strength of our business on “better, faster, cheaper”, but at the end of the day, all that Wall Street (and its hoards of brainless automatons) cares about is profit – which is revenue minus expenses, and once your business can’t get any better / faster locally, globalization is the next logical step. However, AMR is right when they note that this has boosted the need for a more extensive set of skills and competencies, and without these competencies, global supply chains could start to crumble.
  • Talent is the foundation for improvement
    You can have the best damn model in the world, but if no one uses it, it’s useless. A shared, modern, comprehensive model that incorporates the growing depth and scope of the discipline is a great guide, but what we need is people who understand the depth and scope of the discipline and who can not only manage today’s supply chains, but evolve them into tomorrow’s supply chains. Good programs and teachers will be more important than good models, especially in the short term where expertise is about to be in critically short supply.
  • Universities always have the opportunity – but private programs will lead the way
    I had the (dis?)pleasure of teaching in a number of public Universities and of trying to move curriculums forward. To be blunt, a dentist has an easier time pulling teeth than a progressive individual has of moving a program forward where, typically, a third (or more) of the department is nearing (early) retirement and see no reason why they can’t teach the same course they taught last year (and the year before and the year before), and where they believe that, even in areas such as technology, a course should be good relatively unchanged for at least five years. And even if you’re lucky enough to be part of a progressive department who sees the need for regular program enhancement and redesign, the bloated process, the need for approval by committee upon committee, and the internal politics at most publicly funded institutions limit you to progress at a snail’s pace. Considering that very little, if anything, moves faster than supply chain these days, by the time you get a program approved, it’s ancient history. That’s why, in the short term, for-profit private institutions will lead the way.

Purchasing Certification as a Savings Strategy

One of the presenters at this year’s reSource 2008, Iasta’s (acquired by Selectica, merged with b-Pack, rebranded Determine, acquired by Corcentric) user conference, was Charles Dominick of Next Level Purchasing (now the Certitrek NLPA). In his presentation on Purchasing Team Skill Building and Certification, Charles suggest that one of the best strategies available to a CPO (Chief Purchasing Officer) or CSCO (Chief Supply Chain Officer) trying to deal with today’s challenges of increased competition, price pressure, supplier savvy, new technology, and expectations from the CEO might be to get their entire department certified – and initial results appear to be proving him right.

Last year, Next Level Purchasing started stepping up their efforts to sell training and certification programs on a department level, and the first few departments to obtain the SPSM certification on a department level quickly recouped their investment, and one of the first companies to complete certification on a department level – a 1 Billion plus furniture manufacturer – doubled their annual savings one year after completing the certification! That’s an astronomical ROI! An average 1 Billion company these days is probably spending 600M to 800M and capable of sourcing at least half that – 300M to 400M. If it was saving 10% on average using basic e-Sourcing technologies and techniques, it would be saving 30M or 40M. If it doubled that, through better processes and use of technology, that would be an additional 30M to 40M. For a certification program that would cost less than 100K to 200K for a department of 20 to 40 people, that would be an ROI of over 20 to 30! (Certification is less than 1500 per person, plus the cost of department-wide training courses to accelerate the process and learnings.)

So how can certification alone achieve such impressive results? It has to do with the fact that the average purchasing team today is a mish-mash of employees that range from Generation Y’ers to imminent retirees, high school graduates (and, in some cases, that’s if you’re lucky) to recently minted MBAs, career purchasers to other departments’ cast-offs, and tactical grunts to strategic thinkers. As a result, you have a team that generates inconsistent results across unevenly distributed workloads, a lack of independence, a lack of unity, and a consistent communication breakdown, often due to a lack of understanding of current tools, processes, and terminology.

However, with a department wide certification, where everyone has the same understanding of modern processes, tools, techniques, and, most importantly, terminology, you begin to see more consistent results across the board as all of your buyers, who are now on the “same page”, are not only appropriately trained for their jobs, but are able to build a “true team” where they are able to learn from and leverage each other’s successes. And when you consider the potential that exists in a well-trained team, it’s definitely worth some serious consideration.

For more information on NLP’s certification offering, you can check out my reviews of some of their standard courses:

Mastering Purchasing Fundamentals, A Review Part I
Mastering Purchasing Fundamentals, A Review Part II
Savings Strategy Development, A Review Part I
Savings Strategy Development, A Review Part II
14 Purchasing Best Practices, A Review Part I
14 Purchasing Best Practices, A Review Part II
Supply Management Contract Writing, A Review Part I
Supply Management Contract Writing, A Review Part II

As well as my review of their advanced course:

Expert Purchasing Management, A Review, Part I
Expert Purchasing Management, A Review, Part II

Success Breeds Failure (Unless You Are Constantly Re-inventing Yourself)

As I indicated last week, the best presenter at this year’s 41st Annual Supply Chain & Logistics Canada Conference on Creating a Resilient Supply Chain was Jim Tompkins’ (CEO of Tompkins’ Associates) who gave the keynote and a presentation on Bold Leadership for Organizational Acceleration.

In addition to his great advice to Kill the Left-Suckers, he also made another great point – that success breeds failure. Peak-to-valley is the natural order in business, and if you think you’re going to stay at the top by doing what you did to get there, you’ve got another thing coming. If you want to stay at the top, you have to re-invent yourself the minute you get there – and not one minute later.

He also exposed some of the great myths of leadership – of which there are quite a few. These myths include:

  • Leaders create organizations that run like clock-work
    Only old analog clocks run like clockwork – and how many of those do you see these days?
  • Leaders are renegades that do things differently from others.
    Renegades tend to be loners – kind of contradictory when you think about what a leader is supposed to do.
  • Leaders are interested in immediate results and not the long term.
    No, that would be short-sighted wall street.
  • Leaders can predict the future.
    Not even futurists can predict the future on a small scale.
  • Leaders are machines that process and analyze spreadsheets.
    No, that would be misfit managers.
  • Leaders don’t rock the boat.
    Uhmm … have you ever been on a boat?
  • Leaders are compelling and fascinating people who can charm people into doing anything and everything.
    Just because some of our leaders today are sleazier than con-men doesn’t mean that they’re all grifters.
  • Leaders are into command and control.
    Leaders are into success … and that doesn’t come from hoarding.
  • Leaders lead from ivory towers.
    No, that would be academics … and considering no one in industry tends to listen to them anyway, are they really leading?
  • Leaders are among the few.
    Maybe, but it doesn’t have to be that way.

Although it’s hard to define a true leader, you can define what leaders do, and they:

  • challenge the process
  • inspire a shared vision
  • enable others to act
  • model the way
  • encourage the heart as well as the head

Kill the Left-Suckers! (Bold Leadership for Organizational Acceleration)

By far the best presentation at this year’s 41st Annual Supply Chain & Logistics Canada Conference on Creating a Resilient Supply Chain was Jim Tompkins’ (CEO of Tompkins’ Associates) presentation on Bold Leadership for Organizational Acceleration. (He also gave the keynote, which was a great presentation as well, but this was one of the best presentations I’ve been to in years.)

Not only is Jim a great speaker, and if you haven’t heard him, I encourage you to attend his session the next time you’re at a conference where he is speaking, but he’s also really good at telling it like it is. And in this presentation, where he gave his top three tips to bold leadership success, he didn’t pull any punches. In reverse order, his tips were:

  • Don’t Do Anything Stupid,
  • Focus, and
  • Kill the Left-Suckers.

And I couldn’t agree more! What’s a left-sucker you ask? It’s someone who can’t do his (or her) job, and pulls his (or her) manager away from doing what the manager is supposed to be doing to help the individual who can’t do his (or her) job. Why is this so bad? Isn’t that what managers are for? Well, they are there to help, to teach, and to guide – but they’re not there to do their subordinates’ jobs. When managers are consistently pulled away from their jobs, they don’t get their work done and then their directors have to step in to pick up the slack. When the directors get consistently pulled away from their jobs, they don’t get their work done and then the C-Suite has to pick up the slack. When the C-Suite has to pick up the slack, they aren’t getting their work done, and then the CEO gets pulled into fire-fighting on a daily basis – and instead of the CEO leading the C-Suite in setting strategic direction, he’s bogged down in tactical execution while the company starts burning down around him.

As Jim says, a CEO should have three hours a day to do nothing but focus on the strategic. He needs to think about what the company is doing, what they should be doing in the short and long term, and how they are going to get there over the required time period to either reach the top or maintain their place on the top. If he’s consistently being pulled in half-a-dozen directions, that’s not going to happen. So you need to make sure that it does – by identifying, and eliminating, the source of the problem – the left-suckers!

If you can train them – great! If you can find them another role that they can do – that’s good too. But if you can’t train them, or find a role that they can do without constant supervision and hand-holding, then you have no choice … you have to terminate them. Or they’ll terminate your company. Bravo, Jim. Bravo!

Talent is the Key to Post M&A Success

Late last year, Chief Executive ran a great article entitled “Stars and Keepers” that noted that about half of all mergers and acquisitions fail to deliver value. Although the usual suspects of poor synergy and incompatible cultures are usually blamed, much of the blame should be placed on lack of an appropriate talent identification and requisition strategy.

As the article points out, the real expertise about innovative products, services or processes tends to be carried around by employees in their heads and unlike an assembly line, such employees are portable. They can walk out the door and never return, especially if they’ve already sent their resumes, which is likely since most people get nervous when M&A discussions are in the air and start looking for new work, in case they are the ones to get the shaft. And once talent is gone, it can’t be called back. And if enough talent leaves, there goes the value you spent so many millions of dollars on acquiring. The merger is considered a failure.

Before you start M&A activity, it’s important not only to have an integration strategy, but a specific strategy for talent retention. One framework for creating a talent retention strategy is outlined in the referenced article. It starts with the creation of a simple 2*2 grid for sorting employees in the merged company along the axes of “criticality” and “future fit”. This allows you to segment employees into transition, integration keys, keepers, and long-term stars.

  • Transition
    Even if these employees are star performers, they won’t be needed because they fill redundant support roles. A plan will be needed to assist them in finding a new job and transitioning out of their current role.
  • Integration Keys
    Although they have the critical skills required for the transition, these employees don’t have a long-term future in the organization. The plan will have to include offers with appropriate incentives that will entice them to stay on during the integration, as well as a plan for helping them transition out of the organization after the integration is complete.
  • Keepers
    Although these strong performers are not yet stars, they have the potential to be stars in the future. The talent retention plan will have to include a communication strategy to convince them to stick around, outlining their potential role in the company of the future.
  • Long-Term Stars
    These are the people central to the synergies identified as key to a successful M&A transaction. They are the ones that possess the unique skills or intellectual capital required to continue to grow the business. It’s critical that the plan not only includes an outline of their future role in the company, but a personalized communication plan and offer for each star that you want to retain. Because if they leave, the M&A will be a failure.

After you’ve identified the stars and keepers, the next thing to do is flush out the plan. The article provides the following outline, which is a good start:

  • Flesh out the retention plan and stick to it
    Don’t say one thing and do another. All employees have to trust you.
  • Focus on best-of-breed, not just home-grown talent
    The goal is to protect the value of the merger, not to favor existing employees.
  • Adapt the offers to the employees
    Every employee is unique. Don’t take a one-size-fits-all approach.
  • Communicate early and often
    People get very, very nervous through a merger. Be sure to quell their fears on a daily basis.