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CPO Views on Talent Management: A Report from the Procurement Leaders Conference

I attended the Procurement Leaders’ Conference in Boston this past week, and heard from a number of top Chief Procurement Officers presenting on current topics, as well as sharing ideas on various themes in the supply management ecosystem. A common theme that came out was the need for increased talent in the supply management area.

Nick Gunn, CPO of Indirect Spend at HP devoted an entire session to the topic of talent management. He noted that most people don’t start a 40 year career thinking they will be working in procurement, but that over the course of a career many, many things can change. How HP engages stakeholders is a critical talent, since procurement at HP is a shared service, and as such their stakeholders are literally their customers in every sense of the word, except that they don’t have a choice to go elsewhere if they don’t like what HP procurement does for them. Procurement sits down with their senior executives to understand their business, and plans accordingly on how they will deliver value. He also talked about the fact that people in procurement need to stay relevant and abreast of current issues, just like doctors who keep up on their journals. Twenty years ago, HP was hiring “red meat-eating negotiating professionals”, but while cost savings are still important, it is a softer set of skills that underlie the ability to create better relationships with customers.

A roundtable in the afternoon led by Robert Rudzki from Greybeard Advisers also produced some notable insights. Sitting around the table was a notable group of professionals, including Linda Topping from Colgate Palmolive, Carl Oberland from Siemens, Lance Davis from Genworth, Deron Banke from Oldcastle, and others. First, most companies now have formal training and development plans that are focused on procurement skills. In terms of what is important, training is viewed as a critical element. Bob Rudzki noted that when he was CPO at Bayer in Pittsburgh, even when he was asked to cut budgets, he protected training, noting that “I’d rather lose one person that sacrifice the capability development of my people.” He also joked that when he emphasized that every person had to have 40 hours of training a year, he met with a lot of resistance, but told people that “You mean we can’t sacrifice 2% of an individuals time (1 week out of 50) to improve their skills?” Several people agreed, noting that the ROI on training is not just about getting people to apply approaches to drive cost savings, but really as a way to stimulate, develop, and retain your best talent in supply management! This is an on-going issue, as keeping the best people is critical in just about every industry. However, there are clear examples where ROI is evident. For example, training on strategic sourcing probably has a great ROI than training on presentation skills!

Some of the key skills identified in top talent includes financial skills, analytical skills, ability to develop models in Excel, as well as teamwork, leadership, an ability to present data in a “soft-sell” mode to influence individuals in other business functions. Most companies do not have a specific annual hourly training requirement, but have a capability roadmap laid out for entry-level vs. experienced individuals in different roles.

Colgate emphasized the importance of having multi-lingual training, as they are seeing a lot of growth and need for procurement in Latin America, Eastern Europe, and Asia. Another way to get people excited about training is to hold the sessions in different global locations, as many people are excited to travel and visit new locations.

A final issue was what happens if other functions want to sequester procurement people or move them to a different location. This is a good news/bad news situation. The good news is that now you have a procurement advocate in a different business unit, but the bad news of course is the loss of talent and finding a replacement. A way to ensure this is to make procurement an exciting place to be, so that people request transfer into the roles.

A final discussion item came up: why is there such a talent shortage? I pointed out that many companies have roles that state they need 5 years of supply management experience, thereby making it almost impossible for young MBA’s and undergraduates to land these roles, so they go unfilled! There is a need for companies to be willing to take more risk on young people coming into the job market who may have fewer years of experience, but demonstrate a high level of learning agility….especially in the current market.