Category Archives: Talent

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?

Elements of Leadership

A recent post over on ChiefExecutive.net on The Four Elements of Leadership had four great tips for helping you manage your top talent. In brief, they were:

  • Understand Your Role
    You’re a leader, not a manager. As a result, you direct, you don’t control.
  • Unify the Team
    Don’t divide the team, don’t add members that will divide the team, and if the team begins to divide, align them against you if need be (on a temporary basis).
  • Deference is for Managers
    If you get too accustomed to having people defer to you, you stop growing as a leader. The team should be empowered to make their own decisions, should know that you’re not the only expert, and should know that you don’t have all the answers and don’t expect that you do.
  • Deal with Differences
    Learn how to identify them, respect them, use them appropriately, and find a common language when not everyone thinks the same.

In other words, leaders lead, they don’t micromanage; they build a team, they don’t just put bodies in seats; they empower the team and acknolwledge their own limitations, they don’t see themselves as superior; and they understand.

It’s a good article with good advice.

The Emerging Focus on Talent, Part IV

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 Emerging Focus on Talent, Part III

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.