Category Archives: Talent

You Can’t Hire 100 People At a Time (Bonus NPX Take Away 1)

One of the things I heard at the NPX exchange put on by The Mpower Group is that there are companies out there looking to hire 50, 100, and even 200 Supply Management professionals — right now. What, what, what? I can’t believe I just heard that. While I’m sure most of you are saying that’s great news because, in your opinion, that means jobs are returning and/or faith in Supply Management is finally getting to what it needs to be, I can assure you this is not great news.

What this really signifies is that there is a deep fundamental problem in the organization in question. A well-run company should not suddenly need 200 people in its Supply Management organization. The first thing one has to ask when hearing that a company needs that many people is why. And “we’re centralizing operations” or “we’re expanding our global footprint” are not good reasons.

A company doesn’t have to hire more people to centralize operations, even if it is moving Supply Management headquarters. It simply has to relocate some staff on location and everyone else can work wherever they are. Now that most people have affordable video conferencing on their desktop, and it’s quick and easy to get just about anywhere in the world within two days, there’s no excuse for not letting people work where they are. (And any HR professional worth their salt will tell you that it’s much cheaper to relocate talent than to hire new talent and get them up to speed.) If the organization needs new people because it just got rid of a bunch, one needs to ask why. Did it really have that many people who couldn’t cut it and, more importantly, couldn’t be trained to cut it? If so, there is something fundamentally wrong with its hiring practices and talent management and it’s probably not somewhere anyone would want to work.

A company doesn’t have to hire that many more people to expand its global footprint either. It just has to hire a few local resources in the region and open an office. That’s 20 people, tops, not 200. If it needs more, then it’s expansion plans are too aggressive. There’s no way you can parachute 50 to 200 people into an organization and not expect everything to come to a screeching halt for 6 months. Even if you can figure out where to put 200 people, you need to get them equipment, train them on general organizational processes, assign them specific jobs, train them on the appropriate technology and specific processes, hold their hands until they know how to do their daily jobs, and have mentors readily available to answer questions for up to two years as they learn the ins and outs of the more complex aspects of their assignment.

In short, jobs returning to Supply Management are a good thing, but only if they are added in moderation.

Ariba Vision 2020: Today’s Blues

The following six predictions from “Vision 2020 – The Future of Procurement”, which would have been good if made before 2005 for 2010, are outdated and clearly come from Procurement professionals in organizations that are still in the laggard category as they define situtations that should either now be, or be in the process of becoming, standard modus operandi for a leading Supply Management organization.

04. Communities collaborate

Not only have we had virtual communities since 1996 when Geocities (which launched as BHI in 1995) hit the scene, but we have had collaborating communities in the enterprise for over 10 years now. Even Innocentive has been around since 2001! And while it’s true that communities haven’t been around nearly as long in Supply Chain, with the help of Ariba (and the Ariba Exchange), Kinaxis (and the Supply Chain Expert Community), RollStream (and its social supply chain solution that was recently acquired by GXS), communities are now normal operating procedure in leading Supply Managment organizations.

17. Talent competition heats up

The Talent Competition is already at the boiling point. Now that the economy is recovering, the last of the baby boomers are about to recover in droves at a time when there aren’t enough Supply Management professionals to begin with (as there are no programs out there that mint new Supply Management professionals for your organization to hire, as per SI’s post on the derth of Supply Chain Education). In fact, by 2014, the problem will be so bad that it will be #1 on every CPO list. And any organization that is struggling that does not address the problem now will not be around by 2020 to deal with it.

19. Enter the extended enterprise

For many global multi-nationals and leading Supply Management organizations that have outsourced, offshored, and rightshored over the last few years, the extended enterprise is already here and part of daily operational life. And this holds true for a number of product and service companies in the Global 3000.

22. Bye products, hello solutions

The crunch of the last few years resulted in many suppliers adopting a solution focus as they attempted to retain what little business their was. They went beyond simply providing a product to providing a solution around that product, including repair and warranty services, training services, and, in some cases, even consulting services. They embraced not only VMI (Vendor Managed Inventory) but VMS (Vendor Managed Services) in an effort to make themselves indispensible to their clients.

28. Contracts motivate

Well designed contracts that offer the right incentives and allocate the risks appropriately already motivate top tier suppliers to perform better to get a larger slice of the pie. If a contract offers a supplier a 10% reward for a 3% increase in service level, then, as long as it doesn’t increase the supplier’s costs by 10% to achieve a 3% increase in service level, it happens. It might take a while, but motivated suppliers get the job done when monetary rewards are involved.

29. Firms wake up to supply risk

The recent volcanic eruptions of Eyjafjallajökull and Puyehue that have grounded flights across the better part of a continent, the recent tsunami that devastated Japan and resulted in nuclear disasters in addition to long term supply disruptions, and the recent increase in droughts, fires, and hurricanes (thanks to global warming) that have resulted in decreased crop levels and huge spikes in basic food commodity costs have already woken up any supply management professional that is still breathing to supply risk and the need to address it. And even though most firms may not yet have the answers, they know they need them.

The next post will address Tomorrow’s Shoes.

Apprenticeship is the Answer

Back in March when I asked if we can fix supply chain education because academic programs, third-party programs, private programs, and vendor programs are, for the most part, not meeting our needs, I pointed out that the answer was to go back in time to when apprenticeshipos were common. When students studied on the job under the guidance of a master who prepared them for the job they had to do, not to advance an understanding of purely intellectual pursuits devoid of a real world application.

While I didn’t get much of a public reaction, I did get some very positive feedback from some old-school folks who have tried everything and realized that work-alongside training is the best answer. But a few old coots, as brilliant as they may be, do not deliver enough critical mass to get the idea out there. However, it seems that India is proving my point. As per this recent article over on Global Services that asks if “everything we know about offshoring innovation is wrong”, not only does an appropriately designed test prove to be a better indication of ability than a University degree, but intensive on-the-job training under a skilled expert tends to produce a better worker in months than is typically produced by years of higher education.

In other words, apprenticeships are the answer.

Don’t Overlook the Soft Cost Savings from SOW Management

A recent article in the SIG Newsletter on the “best practices for managing and analyzing statement of work spend” that described the rapidly maturing market for centralized SOW (Statement of Work) management programs and the usefulness of a modern VMS (Vendor Management System) also described the one-time and continous benefits of managed SOW programs (under the guidance of a PMO – Program Management Office) and the hard and soft cost savings that resulted. While many organizations move to managed SOW programs, often through a MSP (Managed Services Provider), in pursuit of the hard dollar cost savings, that are often in the 10% to 15% range when done properly, the long term soft cost savings will often be more valuable.

In particular, the following benefits are invaluable to an average organization:

  • single point of contact for contingent labor needs
    no need to contact, and manage, multiple providers to fill different labor needs
  • reduced cycle times
    one call and the PMO or MSP uses a process already in place to locate and onboard your contingent labor
  • standardized criteria
    every department uses the same definition, and the company pays one rate for one type of resource
  • increased visibility
    one report shows the total spend on contingent / managed labour by type, department, provider, etc.
  • compliance firewall for classification, tax, and labor law issues
    which significantly decreases the risk of a massive fine when the same contingent workers are repeatedly rehired (and the government decides they are now employees and you owe more taxes and benefits)
  • standardized performance metrics
    and managed suppliers who know what is expected of them
  • better labor needs forecasting
    from complete and accurate contingent workforce data
  • payment management
    no interest from late payments, no overpayments, and, most importantly, no double payments

All of these benefits reduce complexity, increase reliability, and reduce risk — which keeps costs down in the long run as complexity, risk, and uncertainty only serve to drive up cost.

Is Your CPO the Next CEO Candidate?

Supply and Demand Chain Executive recently ran an interesting article on “forging a dynamic, enduring and energetic supply chain: developing supply chain-rooted CEOs” that outlined 5 attributes of great CEOs, 10 questions to ask about the organization, 10 reasons to invest in internal leadership talent, and 10 areas to develop great leadership skills.

According to the authors, the following 10 areas are key developmental areas for leadership and, thus, critical for the CPO to master if she is to become the company’s next CEO.

  1. Business Acumen
    The CPO must understand the fundamentals of how money is made within the company and industry, the needs and wants of cusotmers and stakeholders, and the competitive and market dynamics that drive change and opportunity.
  2. Work Ethic
    The CPO must put the time in to prepare herself for the next step and stand out.
  3. Networking Skills
    The CPO must build a network of supporters and influencers, give more than she gets, stay connected, and build internal and external advocacy.
  4. Results Oriented
    The CPO must earn her stripes by consistently delivering results that drive the respect and recognition of others.
  5. Permeability
    The CPO must have the ability to collect and synthesize multi-directional data across critical domains and be willing to constantly share knowledge.
  6. People Skills
    The CPO must be able to get the most out of people.
  7. Decision Making
    The CPO must be cool under fire and be able to make critical and controversial decisions when required.
  8. Lateral Development
    The CPO must be open to lateral moves which are stepping stones on the path to the CEO spot, such as CFO or COO.
  9. Continuous Learning
    The CPO must be willing to learn continuously and demonstrate such willingness.
  10. Legacy Building
    The CPO must have built a Supply Management organization that is capable of standing on its own and shining if the CPO moves on.

SI has to agree. A CPO will need to have all of these skills and qualities to take on the CEO role. But is it enough to get her the job? As Bob continually points out, a CPO must speak the language of the CFO. It’s more than just business acumen, it’s talking like you belong in the role. And while work ethic is highly regarded, it’s results that count. If the CPO is constantly putting in 80 hour weeks but not meeting her goals, she will look ill-fit, or slow. And while Networking and People skills are well regarded, the decision ultimately comes down to a small board of directors — if they do not think she’s the right candidate, it doesn’t matter how much internal support she has. And while permeability is admired, it’s seen as tactical as the organization can always hire an analyst to synthesize the data. It’s the ability to make good decisions based on the data and information available that is admired most. And it’s not always the legacy the CPO has built, but the legacy the board thinks the CPO could build as a CEO that ultimately influences the final decisions.

It’s a tough call to say which skill set is the right skill set and what is required to get the CPO into the top spot. Are there any other viewpoints out there that could shed some more light on the subject?