Overcoming Talent Challenges for Supply Management
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1 Overcoming Talent Challenges for Supply Management
2 OVERCOMING TALENT CHALLENGES FOR SUPPLY MANAGEMENT MAY 22, :30-3:30PM Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader Amy Fong, Principal and Senior Procurement Advisor P2P Program Leader
3 31% of organizations consider access to critical talent an area of high risk and they expect that risk to grow 20% in the next year. Creating a digitally enabled workforce
4 Current and projected business risk Cyber security risk tops the list overall while competition and talent are forecasting the biggest projected increase Percentage of companies ranking as high risk 2016 (current) (projected increase) Cyber / information security 47% 20% Intensified competition 41% 17% Disruptive innovation 32% 24% Access to critical talent 31% 20% Source: 2017 Key Issues Study, The Hackett Group 4
5 What we ll cover today What skills do you need to succeed? How will the organization will adapt? What is the future of procurement? 5
6 Thriving in the digitally enabled workforce will require these 6 skills Data Analysis and Modeling Process data and extract relevant information Knowledge of analytical tools and methodologies Translates analyses into actionable plans Business Acumen Understand key business drivers Knowledge of factors, priorities and business demands Identify problems and prioritize alternatives Strategic Mindset Develop strategic frameworks and visions Anticipates market changes Address challenges and outline future direction Relationship Management Advanced interpersonal skills Positively influence decisions Open and approachable Savings and Financial Analysis Translate savings and value improvements to P&L impact Develop tools to track, measure and forecast savings Analyze supplier financial statements for detailed insights Supply Risk Management Expertise Assess and prioritize business and category-specific risks Measure, prioritize, and address risk Develop risk mitigation plans for high-priority drivers 6
7 Key Skill: Business Acumen Individuals with strong business acumen: Understand how key business drivers relate to one other and are impacted by competing courses of actions Have deep knowledge of factors, priorities, and demands that influence business decisions Are experts in how to identify problems, prioritize alternatives, and implement solutions Understand interdependencies across business functions Are capability of managing uncertain situations and remain flexible in the face of shifting circumstances Navigates the short- and long-term trade-offs of business decisions Why it Matters As economic volatility increases, category managers will need to sit side by side with their stakeholders, navigating business decisions that impact the supply base. Business acumen is fundamental to elevating procurement s role as a trusted advisor. How to Build it Learn finance and operations basics Take job rotations Monitor industry research Spend time in one company/industry 7
8 Key Skill: Relationship Management Individuals with strong relationship management skills: Use advanced interpersonal skills to build relationships that drive business outcomes Treat individuals from all levels of the organization with courtesy Meet with others and listen to their perspective on business issues. Interact with internal and external peers to positively influence decisions Are consistently open and approachable when resolving highly sensitive and complex issues Build strong relationships with senior leadership Why it Matters Evolving the value of procurement requires working hand in hand cross functionally with a variety of stakeholders from senior budget owners to line managers as well as being a customer of choice and partnering with valuable suppliers. How to Build it Build your soft skills: Listening, learning and caring Embrace diversity Check your subtle cues Be approachable and approach others 8
9 Key Skill: Risk Management Individuals with strong risk management skills: Are considered an expert in assessing and prioritizing business and category-specific risks Develop templates and frameworks to measure, prioritize, and address risk Lead others in the development of risk mitigation plans for high-priority drivers Adopt emerging technologies like advanced analytics and cognitive tools to better assess, monitor and mitigate risk factors to the business Why it Matters In a market of increased risk and volatility, risk management capabilities are more prominent to the enterprise. Responsiveness to market and outside threats will determine which companies survive. The next economic downturn or crisis may be revealing. How to Build it Know your industry risk factors Include risk in your category plans Read up on risk Pay attention to technology developments 9
10 Key Skill: Strategic Mindset Individuals with a strategic mindset: Are experts at developing strategic frameworks and setting a vision for the organization Serve as a key resource to advise others Anticipate market changes and establish a vision to affect change through formulation and implementation of objectives and priorities Are able to lead a strategic planning team to address major challenges and outline future direction for the organization Why it Matters Even the most digital organization needs strong leaders to navigate the ship. Understanding the broader market and aligning procurement s vision with that of the business will be fundamental to navigating change and extracting value from the supply base. How to Build it Learn about corporate strategy visit a MOOC Understand your broader business objectives and challenges Be a leader 10
11 Key Skill: Data Analysis and Reporting Individuals with analysis and reporting skills: Possess expert ability to process data and synthesize disparate sources to extract relevant information Hold deep knowledge of analytical tools and methodologies Design training programs for data development and analytics to support organizational needs and guide analysis teams to address data needs and objectives Are able to query complex data sets and derive conclusions, as well as translate disparate analyses into actionable business plans Have insight to think mathematically and model complex problems with robust statistical tools Support all hypothesis and recommendations with relevant quantitative information Why it Matters Big data will change the way we use information in procurement. Those able to sort through the data and make actionable plans have the potential to add high value to the organization. The tools are available today, but adoption is just beginning How to Build it Train yourself on the latest analytical tools Start with your own spend cube Learn from others 11
12 Key Skill: Savings and Financial Analysis Individuals with strong savings and financial analysis skills: Are experts in translating spend, savings, and value improvements to impact on P&L Demonstrate ability to develop new and creative tools to track, measure, and forecast impacts of savings and broader value Share expertise with sourcing team and finance department to guide projects Have the ability to analyze supplier financial statements for detailed insights Why it Matters Tying savings and value benefits to financial statements demonstrates the value of procurement, but more importantly drives business profitability. Tying budget favorability to procurement actions can be elusive but critical. How to Build it Make a visit to finance Take a class Lead a project 12
13 There are a broad array of procurement s skills and talent concerns keeping CPOs up at night where to focus? Impact of growing use of outsourcing on staff development and career paths Maintain adequate skill levels as older workers retire Productively integrating new generation of workers into the company Ability to offer learning & career progression opps. Impact of increasing use of and dependence on technology by procurement Dealing with varying talent mgmt. requirements of staff in different regions Developing leadership capability within procurement Training and developing the skills of procurement staff Ability to attract and retain Procurement managers people mgmt. & development capabilities Alignment of procurement staff skills with changing requirements Communication vehicles and styles appropriate for/preferred by younger workers Impact of increasing globalization/ offshoring of procurement resources Most serious concerns Serious concerns Moderate concerns Least serious concerns Source: Skills and Talent Outlook, The Hackett Group,
14 Procurement organizations leading the talent race are putting in the effort to attract and build their digital workforce Function, not HR, takes ownership for Talent Management processes More fully developed career paths, particularly early and mid-career Implement a vision within the function for talent Greater use of intern and employee referral programs Engage in workforce planning activities, and do more to define talent needs and skills Perceived to be more open to innovation and offering more learning and career growth 14
15 New ways of hiring: Predictive analytics for hiring starts with understanding what drives success in the current role Large Financial Services firm builds a predictive model for hiring & retaining high performing sales team. Undertook an analysis of Average vs Top Performers: - Demographics - Recruiting data - Job Experience - Environmental data By shifting to a new way of assessing sales candidates, the company generated more than $4 million of new revenue in the first six months. Will this work for Procurement? Why not the qualifications are quite similar Source: 15
16 New procurement roles: Head of Cognitive Procurement and Digital Sourcing What makes a head of cognitive procurement? Business acumen Data analysis and Modeling Strategic Mindset 16
17 New ways of learning: Its time to modernize the learning approach To improve learning/development across generations: Explosion of social media provides new ways of learning and knowledge sharing Use a blended learning approach Make learning real time and relevant through bite-sized learning Take advantage of reverse mentoring opportunities Make learning fun and engaging through gamification (ex. MIT Supply Chain Beer Game) Train on how to access the right information/knowledge Develop a more collaborative environment leveraging today s technologies Source: ASTD 17
18 New Cultures: Characteristics of an agile procurement culture Agile procurement organization Low agility Agility enabler High agility Change averse culture, preserve status quo, focus on resource utilization Culture Embrace change, view change as an opportunity, focus on business outcomes Bureaucratic decision-making, lacks empowerment, fosters inappropriate risk taking Talent tied to specific roles, common talent management strategies for all roles, limited learning and development, life-long procurement Leadership Talent Delegated decision-making authority, change-oriented leadership, calculated risk taking Flexible talent placement, talent management tailored to needs of roles, continuous learning and development, rotation Low Agility enablement index High 18
19 Niche Majority Broadly Used Ubiquitous New leadership style: Talent top performers provide greater access to leadership Poor Performers Underperformers Second Tier Top Tier High On the Job Training Stretch Assignments Formal classroom training Web-enabled L&D program Industry education Leadership Dev Programs Coaches and mentors Career high-potential leadership dev programs Utilization Low - Effectiveness High Low 19
20 Thoughts on orchestration and intelligence augmentation Over time I think we will probably see a closer merger of biological intelligence and digital intelligence - Tesla CEO Elon Musk Ultimately, it s not going to be about human vs. machine. We humans have creativity, empathy, emotion, physicality, and insight that can then be mixed with powerful A.I. computation the ability to reason over large amounts of data and do pattern recognition more quickly to help move society forward. - Microsoft CEO Satya Nadella 20
21 How will different activities and industries be affected by intelligent automation? Industry Sector Managing People Applying Expertise Interfacing with Stakeholders Unpredictable physical Collecting data Processing data Predictable physical Automation potential % Accommodation and food services Manufacturing Agriculture Transportation and warehousing Retailers Mining Other services Construction 47 Utilities 44 Wholesalers Finance and insurance Arts, entertainment and recreation Real estate Administrative Health care Information Professionals Management Educational services Source: US Bureau of Labor Statistics, McKinsey Global Institute 21
22 The question of our time: Will Procurement exist in 25 years? Yes but it will look very different from today Transactional tasks may be entirely automated Sourcing activities may be executed electronically with little need for human intervention Data analysis will be embedded into our information systems However.. There will always be a need for interpersonal relationships, values based decision making, creativity, and judgement to harness the value of the supply network. As humans have in the past, we will adapt our personal value and our surroundings for success 22
23 Y O U R F E E D B A C K I S I M P O R T A N T Please take a few minutes to complete this brief survey. Survey link: or Scan the QR code on your smartphone.
24 Contact information Chris Sawchuk Principal and Global Procurement Advisory Practice Leader Amy Fong Principal and Senior Procurement Advisor P2P Program Leader Amsterdam Atlanta Frankfurt Hyderabad London Montevideo Miami New York Paris Philadelphia San Francisco Sydney Vancouver 24
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