Category Archives: Talent

Is the West Going to Lose the Talent War?

I have to say that I’m worried after reading “grow, grow, grow” in the special report on innovation and emerging markets in the April 17th edition of The Economist. Near the end of the article we are told, point blank, that the best companies in emerging markets treat “talent” as a supply chain that needs to be relentlessly managed, not an isolated problem that can be solved on a piecemeal basis and that firms invest heavily in creating “educational ecosystems”.

While the first thing we do is slash the training budget every time money gets tight, companies in eastern emerging countries dispatch managers to give speeches at Universities. For example, GE has charged its top ten managers in China with cultivating relations with a particular university where they can spot bright youngsters and treat them to campus tours and scholarships (that will grow the brand and attract these future superstars).

While we expect unreasonable exceptional performance for a meager base salary and verbally lash out at anyone who doesn’t exceed her performance metrics by at least 10%, eastern emerging companies celebrate good performers. Haier prominently displays photographs of good performing managers, celebrates outstanding innovators in public ceremonies, and names new products and business innovations after their creators.

While we still assign undue praise to the University you attended instead of the degree you earned, your GPA, or, more importantly, what you actually learned, Infosys has adopted the mantra of “no caste, no creed, only merit” for its modern campus in Mysore. Furthermore, to ensure its employees had a better chance of not only climbing the ladder but becoming a millionaire than if they worked for a foreign multinational, Infosys was one of the first Indian companies to issue stock options.

And while we are the first to walk our best talent out the door every time the market dips, even though we just told them they were our most valuable asset the day before (as we, obviously, lied through our teeth), companies in emerging countries, who are experiencing much more rapid turnover than we need to deal with, will stick by their talent through thick and thin — cutting staff is the absolute last resort, not the first.

All told, it looks to me like we’re going to lose the talent war, which means that we’re also going to lose the innovation war, which we were supposed to win by outsourcing all of the manufacturing and back office to focus on our “core strengths” which, apparently, is middle management, junior art directorship and telephone cleaning, as that’s all we will be able to do if we don’t start focussing on talent, the true producer of innovation.

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Emerging Markets Will Disrupt Your Home Markets

An article in the special report on innovation and emerging markets in the April 17th edition of The Economist on the power to disrupt made some very good points on why things will move faster and further this time with emerging markets that deserve to be repeated and discussed because they will, ultimately, disrupt your home markets and the supply chains that serve them.

  1. Senior Management Talent Markets are LiquidGreat management talent can not come from anywhere, but can go to anywhere. And chances are that where ever they go, they’ll have access to highly developed capital markets for merger, acquisition, and expansion.
  2. Emerging Markets are Already Larger Than You ThinkThe emerging-market export machine has engines in almost every industry. ArcelorMittal in Luxembourg is the world’s biggest steel company, Infosys and TCS in India are among the world’s biggest IT companies, Haier in China is the fourth largest manufacturer of home appliances, and ZTE in China is a top-ten mobile handset manufacturer expected to soon be a top-five.
  3. Emerging Markets Offer VolumeDue to the slim profit margins in emerging markets, emerging market companies are obsessed with volume and ways to expand their footprint.
  4. Emerging Markets are Sources of Growth and InnovationNo longer the sweatshops of the world, emerging markets often offer more potential customers and innovation opportunities than home markets.

If you don’t keep a watchful eye out, the end result could be that your top talent defects to a competitor in an emerging market, which aggressively goes after your market share and wins because the innovative new offerings, which can produced more economically using frugal processes and economies of scale, cost less, which will become of increasingly greater importance to the cash-strapped developed economies suffering from stagnating growth.

To maintain your lead, you’ll have to recruit senior talent from emerging talents to revolutionize your supply chain, merge with emerging market companies in local markets, find ways to support even larger volumes at lower costs, and look for innovation the last place you’d expect it.

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Training is an Imperative … Just Do It

A recent article on Industry Week on “the training imperative” noted that, despite the record high unemployment rates, many U.S. manufacturers are having difficulty finding the right people with the right skills to fill a variety of positions. It’s not so much a skills shortage as it is a skills gap — and there’s looming concern that the gap will grow as baby boomers begin to retire. (Now, if they’d also stated that this situation holds true throughout the supply chain, Charles would be doing the river dance right now, because it does. And only a few of us seem to be willing to acknowledge this.)

Why is this the case? The article offers a couple of explanations, noting that what was considered adequate 15 years ago would be nowhere near adequate today and, due to the outsourcing of low-skilled jobs to low-labor-cost countries, the remaining jobs require a much higher skill level, and the average has gone up in terms of the amount of training needed per employee.

But the reality is that this shouldn’t be a problem. Whereas training programs were few and far between in the past, we now have private training and certification programs; more and more colleges and universities instituting new certificate, diploma, and degrees in manufacturing and supply chain every term; a number of online programs that teach basic theory and skills; and, in manufacturing, a number of e-training providers are now providing simulation technology that will teach people how to operate a piece of machinery or fix a machine without actually having to practice on a multi-million dollar piece of equipment. (This is becoming especially common in the Oil & Gas sector.) All you have to do is commit to the programs and your people will get where they need to be. Companies just need to be part of the solution and not part of the problem.

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CPO Agenda’s Skills for the Future

A recent article in the Winter 2009-2010 issue highlighted the results of a recent Human Capital in Purchasing workshop on “Skills for the Future”. According to the article, a buyer will need the following skills in the Supply Management world of tomorrow:

  • risk management
  • financial management
  • working capital management
  • cost management
  • functional strategy management
  • profit management
  • innovation management
  • product (composition) & service management
  • flexible production management
  • team management
  • change management
  • negotiation management
  • supplier (relationship) management
  • corporate social responsibility management
  • sustainability management

as well the following skills:

  • market intelligence
  • leadership
  • communication skills
  • cultural skills
  • personal professional development

In other words, if you want to survive in the Supply Management world of tomorrow, you have to be ready for the New Renaissance coming in the supply chain, get back to the classroom for your true Renaissance education, strive to be The New Polymath, and hope that today’s Leonardo da Vinci takes an interest in supply management, because even if you’re a Mensan, that’s a tall order!

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Old MacDonald Was Right — It Is About E-I-E-I-O!

Today’s guest post is from Dalip Raheja, President and CEO of The Mpower Group (TMG) and a contributor to the News U Can use TMG blog.

Most of us missed it. They were trying to tell us about it when we werevery young. We were not even in nursery school yet! It’s all aboutthe vowels. It’s not about Old MacDonald’s farm, his pigs or hens or any of that … it’s about E-I-E-I-O! Now what do vowels have to dowith Sourcing and Supply Chain Management you might be wondering? Well, as it turns out … everything! The vowels are the most critical link between our alphabet and our language. Without vowels we don’t have words … we just have letters! Without words, we have no sentences, no language, no meaning, no intelligence — in short, we have nothing! And so it is in our organizations. We focus on the tools, templates, processes, systems (the farm, the pigs, the hens) and we forget about the most critical elements in achieving superior business results — the vowels. And without the vowels, all we have are letters. There is no meaning … and we add no value!

The vowels I am referring to are Adoption, Execution, Implementation, Optimization and Utilization. Without these, all we we have is an organization that has the best practices, the best processes, the best tools, the best templates, etc. In other words, what we have is a Toyota. We might have an organization that may be succeeding at a large scale, but we don’t have a sustainable model in the long run. For that, we need the vowels … the ever powerful vowels! If you were strategically sourcing a surgeon for yourself, I am sure you would look at more than just the tools that the surgeon has at her disposal and the training that she has been through. You would want to know what she could do with the tools and the training … n’est-ce pas?

And yet, sadly, it is still very hard to convince most organizations where they need to invest their focus and their energy. They all think that all they need is to develop the right infrastructure in terms of the processes, tools and templates and then train their people on the infrastructure and — voila — just wait for the results. We keep trying to tell them that they should budget at least an equal amount of effort in the vowels, including the help of an expert talent management consultancy, and they continue to insist that all they need is what Old MacDonald talked about … and that the vowels will take care of themselves. Alas, they don’t. The superior business results never materialize. The organization gets frustrated and decides that it needs to adopt new processes, tools and templates because the current processes, tools, and templates must be broken. The cycle starts all over again. And the lessons of childhood are forgotten … that’s it’s not in the verse … it’s in the chorus … it’s all about E-I-E-I-O!

And the focus on the vowels needs to start very early. After all, thealphabet does begin with an A! Furthermore, the focus cannot end with just the creation and training around the process, tools and templates. It has to extend all the way to the point where superior business results are achieved. And while we will need the best tools, templates and processes (for the infrastructure), the mere presence of, and training on, the infrastructure is clearly not enough. In order to truly achieve superior business results, we have to make sure that we pay attention to the vowels.

The focus has to be on what happens beyond the training, how people will actually achieve superior business results, and how they will successfully adopt, implement, and execute the processes. It is the same with supplier relationship management processes. It’s not how you design them, it’s how you implement them. You need to focus on how these relationships will be established and managed to extract maximum value. It’s not just about getting to the contract. At my company we believe in this so much that we even approached a couple of the major law firms to encourage them to include the vowels in their deliverables to clients when they work on executing large transactions between providers and suppliers to help set up these relationships. We did not avail, but we know we’re right. (By the way, it is the same with organizational structures. To optimize them, we have to focus on the lines [vowels] between the boxes, not only the boxes.)

Here is how the doctor described the goal of a transformational journey:

We mostly agree with this except we think the potential is even greater than that. A truly transformational Sourcing / Supply Chain department actually should be transforming other departments. They should be totally focused on value across the entire supply chain. The department should function as if it was a consulting group. The best strategy for such a department is actually a “Sunset” strategy. This concept, and others, will be discussed in later posts.

We will examine this issue in detail in a series of posts. We will begin the transformation journey together. We will discuss the use of maturity models, both current and emerging ones (which look almost identical to the current models) and talk about the gaps and the roadmaps. You can rest assured that we will not ignore the consonants (the maturity models, roadmaps, infrastructure and talent management) … but, we will also focus on the vowels (Adoption, Implementation, Execution, Optimization and Utilization). Because there’s gold in them thar vowels. We will take you back to your childhood, to the days of Old MacDonald, to E-I-E-I-O and then we will build a solution framework and challenge your thinking. We encourage you to join the conversation. Add a cluck, cluck here and a cluck, cluck there … and pretty soon we’ll have everywhere a cluck, cluck!

Thanks, Dalip.

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