Spend Matters welcomes a guest post from Santosh Nair, GEP.
Often cited by most CPOs as one of the most critical components of their success (and also an extremely vulnerable area), effectively managing procurement talent continues to be one of today’s biggest challenges. All companies devise game-changing procurement strategies, but the differentiator seems to be the talent to execute those strategies. There are many reasons for this industry-wide shortfall, but several leading organizations have managed to plug this gap and accelerate their performance. Here are three tips from best-in-class procurement organizations on managing talent effectively:
Focus on skills over experience
If you look at typical job postings for procurement candidates, they usually require several years of experience in managing a category or activity. The expectation seems to be that the ideal candidate will be able to extend their experience in a linear manner in the new role. The first problem with this is that these criteria self-select a narrow pool of candidates, irrespective of the quality of their experience, and we continue to fish in shallow waters. The second (and more important) issue is that broader skills trump specialized experience in terms of forecasting future job performance. Today’s procurement role requires general management skills, excellent analytical capabilities, teamwork, collaboration, and influencing abilities. There’s been a shift from the hard technical knowledge base to the softer organizational skills needed to help this function succeed. This has to be built into the job description and recruitment practices, if procurement is to build a solid core of professional talent.
Catch them young
Once the focus shifts from experience to skills, an ongoing pipeline of young, bold resources has to be tapped. Working closely with schools, colleges and universities, a channel should be created to provide positive branding and opportunities for young students. Apprenticeships, internships, project-based experience, junior buyer roles, etc. are all simple and low-risk methods for both parties to work with each other. The marketing function does a great job of tapping into such channels, as does the operations function with engineering schools. Procurement has to build excitement with the millennial generation by communicating the ability of the function to impact firm profitability, the opportunity to work with different parts of the organization and build external partnerships. This generation is also much more comfortable with technology, process automation, big data, and creative thinking. This hunger and passion is sorely needed to drive true procurement innovation.
Seek leaders from new industries
Beyond seeking more skilled (with possibly limited procurement experience) resources at junior and middle levels, procurement has to look at new industries to fill leadership positions. I recently worked with two Fortune 500 CPOs, both of whom came to their current positions from totally unrelated industries. They brought very fresh perspectives to their organizations and challenged the status quo. Their functional knowledge and leadership skills transcended industry vertical labels and helped accelerate procurement transformation at their new organizations. Such visionary changes require commitment from very senior levels and the willingness of CEOs & CFOs to drive such changes.
In conclusion, toady’s procurement leaders have a burning platform to attract, nurture, and retain talent in all parts of the organization. This calls for branding the function attractively, communicate the well-rounded experience it offers, tapping into multiple channels of recruitment, proactive career management, and exploring new sources of talent.
For more interesting thinking on procurement, visit the GEP Knowledge Portal.