Last week, I spoke at a roundtable discussion hosted by The MPower Group, a Suburban Chicago-based strategy and operations consultancy focused on the Spend Management arena. The group, which calls itself The Best Practices xChange, is comprised of procurement executives from a diverse set of Fortune 500 companies. You can read more about the roundtable series over at Purchasing, which covered the previous quarter's event in an article which is a worthwhile read.
For last week's event, I was asked to speak on the Spend Management talent game. I began my talk by discussing what can go wrong when procurement and operations organizations apply a decade's old philosopy to managing their most precious commodity category: their own organization. I started this part of the discussion by arguing that there are a number of symptoms companies can spot when their talent and skills have not evolved to the level where they need to be. Organizations suffering from talent deficiencies place too much emphasis on checking boxes for boxes sake. Consider how they often use technology as a process -- or crutch -- rather than as an enabler to fundamentally drive better procurement. For example, they often use eSourcing and reverse auctions to drive processes rather than incorporating these tools into a complete, holistic strategic sourcing model, taking into account both cost and non-cost factors.
Organizations that lack the necessary talent to compete at the top level in today's environment often are able to identify results, but have a hard time translating paper-based savings from screen-shot trophies to those that drop to the bottom line. One of the root causes of this is, as Hackett Group points out, a failure at the procurement leadership level to truly become an integral member of the budgeting and planning process (which requires a level of skills, knowledge and expertise about how procurement truly relates and interacts with the business). It's my observation that average talent at the top is usually symptomatic of similar capabilities and performance further down the organizational ladder.
How does an organization improve its talent lot? When it comes for seeking out talent, my advice is to the group was to value generalist skill sets, raw intellect and EQ (emotional intelligence) over industry and domain knowledge in new hires. As important, it's essential in the interview process to test applicants to see how much they understand the world around them and to unearth general problem solving skills that go beyond functional -- or even technology -- knowledge. A database whiz that can fly through twenty thousand data cells is certainly valuable, but those sets of skills can be taught. It's far harder to find someone with the analytical skills to navigate complex total cost decisions and the emotional maturity and interpersonal skills to sell such analyses both up and down the company. As such, I suggested to the group that soft hands often work better than calloused ones in the current environment.
I look forward to continuing to explore the talent game on Spend Matters in the coming weeks, sharing additional thoughts from the roundtable discussion. If you have any particular topics you would like to see me address, please drop a line or post a comment.