Revamping ISM — A Perspective from "Anonymous"

This morning, I'd like to welcome a contribution from "anonymous".

To: The Board of Directors of the Institute for Supply Management
From: A concerned supply management practitioner

Dear Sirs and Madams,

Please forgive me for penning this letter under my anonymous persona and via a blogging web site, but I fear that doing so with my real persona would bring retribution and doing so in a one-to-one format would likely be rejected.

Having just returned from the conference in Las Vegas, there are a few observations that I think are important to share:

- ISM is generally a very well intentioned organization in serving its members and the broader community. For example, the jaded might perceive the CPSM certification as an effort to merely drive new revenues for testing, training, literature, etc., but it does seem to be an important step to helping to up-skill the profession. Additionally, the economic outlook efforts, salary studies, re-vamped website, Richter awards, webcasts, broadening beyond direct materials, etc. are good trends.

- The profession is at a cross-road as the strategic importance of supply management processes run up against the legacy of the traditional Purchasing department. ISM must not just be a champion in this transformation, but must also:

- Hold itself accountable to the same ethical standards that it holds its members to
- Adopt well accepted supply management practices
- Conduct itself in a highly professional manner given this critical time period for the profession

Unfortunately, ISM hasn't performed consistently against these last three requirements.

First, let's examine the ISM conference in Las Vegas as an example. To paraphrase John Edwards, the conference has actually become two conferences: one for the CPO elite and one for the masses. There's a "secret" leadership conference for roughly 100 Procurement leaders, hosted in the penthouse level, complete with its own parallel agenda, down to a private keynote speech and intimate discussion with Malcolm Gladwell. Having a private cocktail session with the secret handshake is fine, but this elitist conference-within-a-conference makes it so that a CPO never has to dirty his/her hands in attending the main conference sessions and certainly going into the exhibition floor with the "untouchables" (vendors). This type of country club should be left to Procurement Strategy Council, not ISM. Perhaps having the leadership attendees visiting with the masses might make those who pay for the conference (i.e., the general attendees and exhibitors) get some more value from the event and not feel embittered by this two-class system. Maybe even just having a board member saying a few words might be nice.

In addition, the exhibition hall was subject to the usual carnie atmosphere (or perhaps Kearney atmosphere is more apt), distributing more injected molded trinkets from Shenzen than perhaps the local McDonalds. The purchasing agents trawling the booths would put Walmart's automated wave picking algorithms to shame. The piles of crap they must build when they return home would rival my kids' Happy Meal chachki landfills growing in my basement. My recommendation is to have exhibitors give away eco-friendly products and also give an award to the exhibitor with the greenest piece of schwag.

In my view, the conference sessions themselves continue to be a mixed bag. For all the supposed rigor in the selection process, the case studies are overwhelmed by highly variable presentations from consultants and academics. Nothing wrong in principle from the latter, but it's the quality of them. There's much exciting research in academia, and little of it showed up at ISM general sessions.

For example, Dr. Rob Handfield presented some great research on Supply Risk, perfect for the conference’s focus on supply continuity, but unfortunately it was done at the secret leadership conference. In terms of consultants, only A.T. Kearney was (omni-) present at the main sessions and the secret leadership sessions. Accenture, IBM, Deloitte, CGE&Y, et al were nowhere to be seen. Interestingly, some of the outsourcers like ICG Commerce and Corbus were, even though selling outsourcing services to a junior buyer is like selling a Mercedes McLaren to Paris Hilton (which is not a perfect analogy, but the actual McLaren that she was pulled over was on display at the conference -- all $460K of it ... why I'm not exactly sure).

Speaking of consultants, the biggest visible issue is the cozy relationship that ISM and AT Kearney have. While "the letter of law" in ISM's charter spells out that a consultant shall be elected to the board, the "spirit of the law" seems violated when there's not just an apparent perpetual board seat granted to Kearney, but everything from the joint studies, Kearney sitting in on CAPS Research board, Kearney's CEO presenting a keynote at the conference, and most disturbingly, an ongoing joint venture (explicitly envisioned by ATK as a way to gain mindshare and sales leads) between a management consultant and ISM. This is not just atypical for a non-profit organization, but really strikes at ISMs credibility as an objective source of information.

Even if ATK does good work (which it does -- not leading edge -- but good yeomen's stuff), perception is reality, and it's unclear how well ISM is spending its money to serve this elitist "think tank" even though the value of the output from these executive networking session. ISM should very seriously consider revising its charter for CSSL to be consultant-agnostic if it wants to be perceived as both objective and relevant.

More broadly, ISM needs to advocate for the changing profession. Changing names from purchasing to procurement to supply management (to maybe "supply chain"?) and changing amorphous mission statements is not enough. Partnering with APICS is a good step, but ISM should perhaps consider learning best practices from the Supply Chain Council. First, it has weaned itself off PRTM. Second, it has engaged its membership to iteratively develop a process model (SCOR model) with associated KPIs and best practices. It's now on its way to its 9th version -- impressive. Is it really hard to do this in Procurement? Answer: no. Whether it's a 6-step model or 8-step model for sourcing, it's the same stuff, and the lack of integration between strategic sourcing and existing inbound supply chain processes is a white space that is extremely strategic, but left empty by both ISM and CAPS. Other than maybe Hackett, practitioners are left with poor choices (e.g., APQC) for this type of process definition and measurement rigor.

I also believe that ISM also needs to actively rotate the board of directors to keep current and relevant. While it might be diverse from a race/gender standpoint, it needs to cull the ex-CPOs who’ve set up shop as consultants or private equity players – regardless of their demeanor or their resumes.

Anyway, please take this commentary as an "opportunity for improvement" and a way to right the ship early before straying too far. Many CPOs I've worked with have written ISM off, but I don't think it’s too late, and hopefully we'll see some meaningful change coming down the road. Many will be anxiously waiting.

Thanks for reading.

Spend Matters wishes to thank "anonymous" for his contribution and thoughts.

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