Category Archives: Talent

Are You Strange Enough (for a Competitive Advantage)?

Browsing through the Knowledge @ Wharton site, which is another one of those sites (like the Economist) that is just as important as the supply and spend management sites you visit every day, I stumbled upon an article published this summer that asked “If Your Workforce Is Strange Enough to Guarantee Competitive Advantage”. It’s a very good question.

The article excerpted part of Chapter four of Daniel M. Cable’s book, Change to Strange that notes what characterizes successful companies these days is a “strikingly different, obsessively focussed” workforce, one that — compared to competitors’ workforces — is “downright strange”. More specifically, to get the best results, companies have to build a workforce “that is extraordinary in a way that customers care about”.

In the excerpted chapter, the author argues that a successful organization is built around measuring and gaming performance drivers – and this is what results in a strange workforce. The development, measurement, and enactment of the performance drivers is what provides the required insight into what the organization is creating, and not creating, that is required to differentiate it from its competitors, attract customers, and, most importantly, win.

The process starts by identifying the outcome metrics that provide a valid reflection of what you think your organization exists to create. Then you find a way to make these metrics move in a way that your competitors are not willing or able to pursue. For example, if you’re a procurement outsourcing organization, you might decide that what customers value most is spend under management and spend put through the system. If this was the case, then you’d find a way to integrate best of breed on-demand SaaS technology into your offering so that not only could you put every purchase you make on behalf of the client through the system, your clients could also put every purchase they make against the contract through the system. Then, used meticulously, your customers would find over 95% of their spend against a contract you cut on their behalf would be in the system and that their spend under management goes up as a result. If your competitors think that the most important metric is total leverage-based purchasing power, you’re in a unique position if you’re right as to what customers want.

It’s also important to answer each of the following questions when you believe you have identified an outcome:

  • What produces the number – and what makes it go up or down?
  • What are the two or three most important beliefs our customers need to have about us relative to our competition to affect this outcome? How do we measure our progress toward our goal of having these beliefs accepted by the majority of our target market?
  • How can we influence the outcome in a way that is valuable, rare, and hard to imitate? What are we willing to do that the competition is not in order to drive this outcome?

For example, if you were a procurement outsourcing organization, you might come up with the following answers:

  • Spend through the system is calculated as total dollars on contracted items spent through the system divided by the total dollars spent on contracted items. It goes up when maverick spend is down, and down when maverick spend is up.
  • The two most important beliefs a customer has to have is that we mean what we say and we eat our own dog-food. We do all of our spend through the system. We measure our progress towards this goal by determining the percentage of outsourcing deals we are getting invited to bid on versus the total number of outsourcing deals that are currently happening in the marketplace.
  • We can adopt an open book policy on our own spend, and let prospective clients (under NDA) access the system and verify that our claims are valid – and this is something our competition might not be willing to do. We can also offer an on-demand spend analysis solution to our clients as part of our service offering so that they can calculate for themselves how much spend goes through the system, how much maverick spend is happening in their organization, and what commodities or categories we should be handling for them.

Thus, even though it might be a little too academic for your tastes (as the book was written by an academic who used a Business School as the example – ick!), the article had a very good point and asked some very good questions once you isolated the core of its message. If you want to be the best, it’s not enough to just work harder and more productively than everyone else … you have to be just a little bit different … and maybe even a little bit strange.

Everything You Know Is Wrong

Sorry if I burst your bubble, but the statement is true if we don’t put a time limit on it (and consider what we will learn between now and infinity). As noted in Shift Happens (on YouTube), it is estimated that over 1.5 exabytes of unique information was generated worldwide in 2006, that this is more information than what was generated in the previous 5,000 years, and that the amount of technical information is currently doubling every two years and predicted to be doubling every 72 hours by 2010!

That means that everything you think you know today, if it’s not already wrong, is likely to be wrong in the near future. Even everything the doctor knows today will eventually be outdated! That’s staggering. That’s why continual education and self improvement is critical.

More importantly, you have to be the one to take on this initiative – to update your knowledge and your skills – because the likeliness is that, at least if you live in North America, your company isn’t going to do it for you. Survey after survey finds that the amount of education and training that the average company in North America provides their employees is dismal, if they even provide any at all. Considering that the current rate of knowledge generation implies that everything you learn in first year of University is likely to be outdated by the time you graduate, this is dismal because by the time you’re in a job five years (assuming your job still exists in five years), if neither you nor your company made any effort to keep your skills up, every bit of technical information you know now will be outdated, as will all of the processes that were molded to use the technology that was leading edge five years ago.

That’s why Next Level Purchasing is my vendor of the week. Realizing that it was up to procurement professionals to keep their skills current, it was the first private training company to develop an affordable training program tailored to the individual who could take the courses on her own time, at her own pace, wherever she happened to be, and, if she desired, end up with a recognized industry certification (the SPSM – Senior Professional in Supply Management). Moreover, Next Level Purchasing recognizes the rapid shifts that are taking place in the industry and makes it a point to review and update the core certification courses every year*1 so that the knowledge you receive is always up to date. Furthermore, Next Level Purchasing also publishes articles and informative blog entries on important topics every week so that you can keep learning even after you’ve completed the certification and they’ve collected their fee. That’s a dedication to student and professional education that you can respect!

*1 It updates all of its courses on a regular basis, but not necessarily yearly if they are not core certification courses and the majority of the material is still relevant.

the doctor’s Predictions on the Winner of the Talent War

I recently came across an article over on Global Services Beta that said “Talent War 2012: U.S.A. Set to Win”. Needless to say I was stunned – especially since the first paragraph ended on the U.S. labor market is set to become less open and flexible over the next five years amid fears of terrorism.

The U.S. has been winning the talent war not because it has been churning out the most skilled talent pool, but because it has been attracting the most skilled talent pool from around the world! Let’s face it, the US only has an estimated 301M people of the 6.602B people on the planet, or 4.56% of the world’s population. If we assume raw intelligence and capability is normally distributed throughout the world, which is a very reasonable assumption, that says that for every 100 of the best and brightest, the US can only expect to have 5. Now, it’s true that a great education system is often required to unlock a person’s raw potential, but that can be found in most of Europe, South America, India, South-East Asia, and South Africa. Furthermore, China has 1.322B to the US’s 301M and India has 1.130B. This says that China and India are likely to have four times as many people in any best and brightest list you care to come up with for every person the US has on that list. India already has a decent education system, especially in its richer provinces, and China has the cash to throw at the problem.

Of course, it takes more than bodies and education to build a great talent pool – it also takes the right culture – based in a free and open democracy where anyone with the talent, education, and the will to work hard and succeed (and make the country he or she is living in just a little bit better) is welcome. However, right now, the U.S. is more intent on building fences, preventing people from flying, and delaying permanent resident application processing until long after the original visas have run out – and this just doesn’t fit the bill. That’s not the culture that made the US one of the most admired countries in the world or the culture that attracted the best and brightest from all over the world to start new research programs and enterprises that put the US on the global map for everything from Astrophysics to Zoology, including the technology that launched the information age.

So, who will be the big winner? Although I’d like to say it will be a country like Canada and Australia, since they have the right education system and the right culture, I have to go with India. The fact of the matter is that with only 33M and 20M people respectively, countries like Canada and Australia do not comprise a significant percentage of world population.

What about the EU, you ask? Well, they’re too busy buckling under their own Euro-centric regulations that make it exceedingly difficult not to do business within the EU, or working 35 hour work weeks and complaining that even that is too much, to take a leap forward. It’s not just the US that is having problems being competitive (in “One Explanation for the Expanding US Deficit”).

Now I’m sure most of you disagree with this controversial opinion, and if you do, I’d love to hear yours. Just be sure to follow the comment rules and also indicate why you think I wrote this after drinking one too many Pan Galactic Gargle Blasters and getting Yakko‘s anvil dropped on my head.

The Seven Savors of a Sourcing Sensei

Everyone likes to talk about sourcing leaders and the great jobs they do – but try finding an article that talks about the fundamental qualities of a great sourcing leader, and that’s a whole different ball game. While it’s almost ridiculously easy to find dozens of articles on what a sourcing leader does, it’s very hard to find even a single article on what a good sourcing leader is.

It could be because everyone is assuming that the qualities that make a good leader are universal and the particular domain irrelevant. While there are some good arguments to be found that great leadership is a unique skill irrespective of problem domain, sourcing is not like any other business function. I believe it takes more than just being a great leader to be a great sourcing leader.

So what does it take? It takes a well-rounded individual with seven special skills, above and beyond what you’ll find in your average highly effective person. These skills are:

  • Experience
    First and foremost a great sourcing leader is experienced in sourcing. She’s spent time in the trenches, knows what sourcing is all about, and is more than capable of making the right call in tough times.
  • Customer Focus
    A great sourcing leader always has the customer in the back of her mind. Sourcing, like leadership, is essentially a service function and a great sourcing leader knows that.
  • Team Builder
    A great sourcing leader understands that the days of the lone warrior corporate hero who could carry an organization to fortune 500 lists with his charisma and genius are finally over and that the key to success lies not with her, but her team. She does her very best to make her team the best that they can be, constantly enables them, and gives them every opportunity for improvement.
  • Market Zen Master
    A great sourcing leader is in tune with the market and understands where it’s been, where it’s at, and where it’s going. Leader’s don’t react to market fluctuations, they predict them – designing and implementing strategies that allow the organization to not only align itself with the market, but keep slightly ahead.
  • Innovator
    A great sourcing leader is an innovator. She knows the name of the game is change and she can adapt to the situation as required.
  • Collaborator
    A great sourcing leader is a true collaborator. Not only does she know that success lies with her team, but that success will require her team to work with other groups in the organization, in partner organizations, and in supplier organizations. To this end, she’s constantly reaching out to improve relationships and create opportunities for the teams to work together.
  • Communicator
    A great sourcing leader is a great communicator. She knows that for sourcing to succeed, its goals, processes, and roles have to be understood and accepted by everyone and takes it upon herself to spread the word. She creates a shared vision that people are motivated to work towards.

For more information on The Seven Savors of a Sourcing Sensei, I strongly encourage you to check out the new Sourcing Leadership wiki-paper over on the e-Sourcing Wiki [WayBackMachine] which was (co-)authored by yours truly. Besides diving deeper into each of the skills, with references as to their effectiveness and criticalness, it also discusses The Seven Scruples of a Sourcing Sensei – or the seven things sourcing leaders do that set them apart.

Are Your Team’s Procurement Skills Up To Snuff?

Are you a supervisor, manager, or executive struggling to get the same performance out of your team that leading purchasing departments appear to be getting out of theirs? Are you wondering why this is the case? Then maybe you should consider getting your team profiled.

Although there could be a dozen reasons why your team is not performing at the level you think they should be (skyrocketing raw material and energy prices are significant components of your spend, inappropriate unbreakable multi-year agreements, lack of proper tools to get the job done, etc.), the reality is that you’ll probably never know which is the right reason until you start investigating different hypotheses. And the hypothesis that you should start with is that your team may not have the skills they need to compete against the leaders in today’s procurement landscape.

The skills an average procurement professional needs today are not the skills that an average procurement professional needed ten years ago. It’s not anybody’s fault, but that doesn’t mean you get to sweep the potential problem under the rug. It means you investigate the possibility that maybe your team, including you, could use a bit of polishing and, if it turns out to be the case, do something about it. The leaders are leaders for a reason – they recognize that in today’s world, you can’t ever stand still and you can’t ever stop learning, and they take steps to identify their weaknesses and improve them all the time.

So start by getting an independent third-party skills profile to find out where you are and where you should improve. One possibility is Next Level Purchasing’s [now the Certitrek NLPA] “Purchasing Assessment of Skills for Success” (PASS) Program, which they offer for free to qualified companies. Although it is, of course, based on the seven dimensions their “Senior Professional in Supply Management” (SPSM) program is based on, it’s still a good measure of whether or not your staff have the basic skills they need to do well at their jobs.

The PASS program uses a Web-based skills assessment based on 56 multiple choice questions designed to assess competence in seven key skill areas:

  • Purchasing Fundamentals
  • Analysis & Spreadsheets
  • Contract Law
  • Project Management
  • Purchasing Best Practices
  • Sourcing
  • Negotiation

Once your team completes the test, Next Level Purchasing creates a color coded report for each employee across the seven competency areas that indicates whether each employee is highly skilled in the area (green), moderately skilled in the area (yellow), or under-skilled in the area (red). From this, you can put together a custom improvement plan for each employee, which can be based upon standard SPSM courses or custom courses developed for you specifically by Next Level Purchasing. Considering the SPSM is a very affordable industry certification, chances are you’ll be able to upgrade your team’s skills in a very cost effective manner if it turns out that is the appropriate thing to do.