In this edition, Nick Little, Assistant Director, Executive Development Programs at Michigan State University’s Broad School of Business comments on some trends in how the “Talent War” is currently affecting supply chain people issues. Nick spent 25+ years in supply management and has been at MSU for 15 years. Initially on research projects and most recently working with companies to help develop their supply chain and other executive staff, Nick uses MSU professors and their research to raise practitioner knowledge and enable learning. Nick is also a founder member of the cross-business, global Supply Chain Talent Academic Initiative working with professional associations and other universities and colleges to raise the level of the supply chain talent pool. Nick can be reached at firstname.lastname@example.org.
We all face one scarce resource that has a greater impact on performance, however measured … people and not just anybody but good, reliable, trustworthy and, above all, capable talented people. The economic recession has raised the focus on right-sizing the talent pool within companies but as the economy recovers, there will be a greater demand for really great people. Companies cannot afford to allow their stars to be head-hunted away to competitors. Great talent is frequently at the root of true competitive advantage through its ingenuity and innovativeness, let alone knowledge of the industry, markets, supply base, systems, processes and so forth. Replacing “lost” talent with suitable people will inevitably be expensive as demand exceeds supply.
The talent issue can be viewed in several dimensions:
- Recruit – both new starters such as graduates who need to be committed to supply chain as a career and more experienced managers who may not see supply management as an exciting place to pass through on their career path to the C-level. Supply management or supply chain management as a whole, does not feature on the radar screen for high-school leavers, is not understood by career counselors and is rarely an elective of choice for business school undergraduates. We need to raise the profile of the career and profession. We need to adopt a scientific model that values and weights the skills and competencies most needed for specific jobs. This will help recruit (internally as well as externally) for tomorrow’s needs rather than merely hiring a replacement as similar to the previous post-holder as we can find.
- Retain – what can be done to ensure really good people want to stay working with us rather than seeking their future elsewhere, often with competitors? Dave Malenfant, Supply Chain Leader at Alcan Laboratories, Ft. Worth, TX says that we need to “scrap the succession plans” and replace them with a closely mentored rotational development program for high-potential people.
- Reward – large performance related bonuses have been bought into disrepute recently and must relate to a combination of personal, functional, business unit and corporate performance that can be open to audit. Thus, base salary will once again be the major portion of total monetary remuneration having direct impact on COGS. We need to recognize and reward people for all their efforts. Working practices such as availability to deal with issues, questions from above, maintain relationships with internal customers and suppliers are much more 24/7 thanks to electronic connectivity, let alone the demands of working with a global supply, manufacturing and service operations. Mike Hadley, chairperson of the Supply Chain Talent Academic Initiative, says that premium salaries are frequent results of failure to develop the strategic role for supply chain managers.
- Redefine – today’s skills, knowledge, capabilities and ways of working will not be the way to do things in the future. People, whether direct labor, managers, specialists or executives all will need to learn the new ways. Often, retraining will suffice, but everyone has leadership and/or followership aspects of their personality and their role in the organization, so mere training will not be enough. Everyone needs to be given the opportunity to become a greater contributor to organizational success. For some, this will involve discovery and harnessing of interests outside work and development of ways to allow them to benefit their community. Others will be able to use their innate ingenuity to be creative, solve problems or work in different roles. Others will be hungry for knowledge and ideas from outside that will spark thoughts leading to different ways of working, new products and so forth. We need to be far more flexible in our approach in this aspect and we need to recognize that failure to invest in peoples’ potential for growth today will cost us tomorrow.
- Realign – recent surveys of CEOs indicate that the most common criticism of HR leaders is that HR fails to demonstrate an understanding of strategic direction through its actions. Often being perceived as reactionary and always “behind the game” often only very few people in an organization are tagged as agile, flexible future leaders. Compare this with our expectations of strategic suppliers. Going the “extra mile” is now becoming part of regular performance, but to be able to do that successfully, we need to do two main things. Firstly, we must recognize that we are raising the propensity to take risk, so expect mistakes and their financial impact without firing people but look on it as an investment – and be sure never to make the same mistake again! Secondly, celebrate success and recognize individual contributions to raise peer performance. Ideas come from anywhere in the organization and should be encouraged to do so, not forced into current budget categories that prevent a view of true total life cycle cost/value analysis. So, we need to ensure all our people recognize that they deserve preferential treatment.
- Redeploy – as strategy changes, new products/services evolve and new markets emerge. Clearly today’s workforce capabilities will not be the same as in the future. We should try to educate or train them for the new environment. Some individuals, even after being given chance to change will be unable or unwilling to perform their new roles. Ultimately we face the choice. Either move them elsewhere in the organization so we do not lose their personal knowledge. Or let them go. Once a vacancy is created, look to move someone with potential to develop beyond their current capabilities into the job as the way to gain experience. Do not slavishly follow a succession plan but seek to benefit from the unknown.
We know that the cost of switching a [critical] supplier is often more than developing that supplier, so why do we fail to adopt the same logic for people? Most individuals have considerable untapped and unexplored capabilities – we don’t know what they have never had chance to show they can do. Give them the opportunity but keep close watch on them. Communicate extensively. Help them develop. Open up sources of ideas for them by investing in education rather than mere training. Develop their minds as well as their skills.
Mike Hadley, consistently hears supply chain leaders lament of the shortage of talent, especially the lack of true cross functional integrations skills. Those can only be obtained through a combination of knowledge and experience. The former can be taught; the latter can only be learned. Both are needed.
MSU and other academic institutions have a large part to play in helping to develop knowledge and to push the boundaries of an individual’s contributive capability. Listed below are a few of our key SCM open enrollment programs and events. In addition, we extensively customize content to company specific objectives and focus on experiential learning with a demonstrable ROI rather than traditional lecture style delivery.