For supply chain managers to become a trusted advisor, talent management is key
A CPO in the financial services industry also noted that a need to redefine procurement’s role in the enterprise is happening, driven by the recognition that a new type of procurement capability is needed:
Prior to our transformation, the ONLY metric by which our performance was measured is how much money we saved for the organization. When people are compensated only on some of the money they save this drives some interesting behaviors. Despite hitting home runs on our savings targets, procurement had higher attrition and mixed customer feedback. We have since shifted our focus on returns on operating budget, taking operating cost out of the enterprise, and on becoming a TRUSTED ADVISOR to every part of the business. And we now have a balanced scorecard to measure performance against a myriad of attributes, including our operational processes, our people, and consistent surveys of our customers.
The role of a trusted advisor is certainly aspirational, as it involves creating many capabilities that are new to procurement. To move towards this vision, organizations will need to re-think their approach on talent management.
Collings and Mellahi (2009) defined strategic talent management as activities and processes that involve the systematic identification of key positions which differentially contribute to the organization’s sustainable competitive advantage, the development of a talent pool of high potential and high performing incumbents to fill these roles, and the development of a differentiated human resource architecture to facilitate filling these positions with competent incumbents and to ensure their continued commitment to the organization.
But if this is to happen – is the human resources group going to lead the charge? Some believe that talent management is “too important” to be left to HR managers alone, who may not understand the critical needs of front-line supply chain managers, and the complex situations they are facing. I believe that there needs to be a closer relationship between HR and supply chain executives, and that they need to go about this challenge as a team. In this case, HR needs to become a “trusted advisor” to procurement, to help them apply the tools, methods, recruiting approaches, training and development methods, and talent metrics that will lead to a successful outcome. This will involve teaming to create a multi-generational plan for talent management that extends at least five to ten years into the future. This can help drive answers to the question of “what should we be doing today, that will ensure we have the right talent, to fill the gaps that we will have in five years, when our experienced managers begin to retire?” These types of questions can be analytically modeled. We are working on such a project at the SCRC over the project, and will be sure to provide updates on this fascinating area.