Taking Your Supply Management Activities (and Performance) to the Next Level (Part 2)

Click here for Part 1 of this interview.

SM: What is the best way of "up-skilling" the profession? What role are groups like ISM, CIPs, etc. serving today? What could they be addressing that they're not?

Trent: I'm not convinced that some of the professional associations are "up-skilling" as much as continuing to focus on a set of operational/tactical/traditional topics. I would like to see some current data on the percentage of CPOs that don't have a procurement background. My anecdotal experience is that it is fairly high, which tells me that the procurement profession might be a bit short on the strategic leadership side. Many companies need to look outside the procurement group to find the kind of visionary and strategic leadership they need to create a next level supply organization. This is not something the professional associations are addressing well.

Rudzki: Bob makes a good point regarding the historical role of the professional associations. The perceived gaps that exist have spawned a multitude of alternative conference organizers, as well as alternative, for-profit professional certifications. But that's not necessarily bad. It just confirms that we have a dynamic profession whose evolving needs are constantly being addressed by a variety of service providers.

SM: How has the role of professional advisory changed since you left the procurement world and became a consultant?

Rudzki: When I was a CPO, you either engaged a big firm in a big, expensive project, or you pursued your change/transformation agenda on your own. There were not many options in between. Today, you still have the option of a big project with a big firm, but there are now more flexible options from expert smaller service providers. This is of growing importance as the loss of organizational "deep smarts" becomes a larger issue within companies across the globe (an issue described in Chapter Six of the book).

SM: Today, what percentage of finance organizations (and CFOs, in particular) look at procurement with the respect the function deserves?

Trent: In my opinion, less than 20% of CFOs "get it." What I see is that supply managers are beginning to realize they need to speak the language of the CFO, and the reverse is not as true. Within academia, my finance colleagues show zero interest in the world of supply and supply chain management, which means that little to no research is happening here. I tell supply managers (and my students) they better take ownership for becoming more aware of the financial side because corporate finance is not going to be all that responsive to their needs.

Rudzki: Bob is right on target. In spite of surveys that suggest otherwise, the reality seems to be that the CFO's office generally does not demonstrate that they have an understanding of what strategic supply management could accomplish. If they did, CPOs would not be constantly on the defensive regarding headcount and budget. But that challenge is also an indication of the opportunity when the CPO "speaks the language of the CFO." A key to success is being able to build a transformation business case that generates strong executive support, with the funding of resources (both internal and external) to support it.

SM: What is the latest with Greybeard? What types of assignments are most in demand these days?

Rudzki: We've been seeing three major themes from clients in the last 24 months. The first is procurement leaders who want to create that transformation business case that I mentioned earlier. We have a strong expertise in this area, and a track record of helping clients succeed. I've been particularly pleased that we've helped firms – even during the absolute depths of the recession – present an effective case for a more strategic procurement role at their company, and helped them to obtain a substantial increase in their budget from their top management. We've then helped those same firms execute on the transformation plan, by coaching their teams on the job. This relates to knowledge transfer, which is a great lead-in to the second emerging demand. The second theme relates to professional skills and competencies. We are seeing more RFPs for professional training accompanied by on-the-job coaching of the sourcing teams by experienced sourcing advisors. In our experience, that is a smart way to proceed. To change behaviors and deliver results is the true purpose of a combined training-coaching approach. Having coaches on site, working with the Procurement professionals, makes a significant difference when it comes to achieving sustainable results.

The third theme is actually a sub-set of training and coaching. There is a growing interest in risk management. We have a robust six-phase risk management process that serves as the core in jump-starting a client's risk management program.

SM: Looking forward a decade, what will the title of the book be that you publish that year and what will the major themes focus on?

Trent: I think the market will be ready for a book on Supply Chain Finance. Also, we are in dire need of some thought leadership on risk management beyond the usual thinking that we see today. For example, most supply and supply chain managers equate the concept of risk with "loss." Over the next decade we will begin to see how supply leaders equate risk with "value creation" rather than simply loss. Imagine that -- risk as a source of competitive advantage.

Rudzki: I agree. The inevitable merging of financial and procurement disciplines is underway in leading companies, and that trend (which we emphasize in our current book) should be a prevailing best practice within 10 years. That merger encompasses a host of key topics, not the least of which is risk management from both a loss avoidance/control perspective and a value creation perspective.

Spend Matters would like to thank Bob Rudzki and Bob Trent for their insights. You can buy their book, Next Level Supply Management Excellence today!

Jason Busch

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