supply chain talent

Talent Trap

by Lora Cecere on January 19, 2014 · 1 comment

The definition of a trap is something designed to catch a person or animal,
either figuratively or literally.

Nine out of ten companies are stuck. Their supply chains are not improving corporate performance. Despite multimillion dollar technology projects, and tomes of strategy documents, they are stuck in their ability to overcome market factors and rising complexity to drive continuous improvement on a portfolio of metrics.

I have spent the last month working with clients that are out of balance. They quickly acknowledge that they are stuck. What does that mean? In short, they have been able to drive improvements in one or two metrics; but, they are struggling to improve a portfolio of metrics that includes customer service, cost, inventory turns, and growth. They struggle to manage the supply chain as a complex system and power improvement on the Effective Frontier (shown below).

progress on the effective frontier

A large factor in success versus failure is the management of supply chain talent. Last week, I taught a public training class. As we were discussing the pending supply chain talent shortage, and the lack of mid-management talent, I was asked a great question. The class participant said, “Lora, I get it. I need to build talent. I cannot wait. But, help me, what are the talent traps to avoid?” Here are the five areas that we discussed. I loved the rich discussion with the group of ten.

  • Don’t Be a Know-It-All. I love doing strategy days with teams. Often, I will walk into a strategy day to face a group of managers that have not worked together before. Due to the shortage of supply chain talent, many have come from different companies. The fun starts when I expose that each thinks that they know what supply chain excellence is, but they lack a broader understanding. What they do not know before the class is that each of them carry a fixed mental model of the supply chain that they knew from their prior job. What they do not realize is that each supply chain has a unique combination of rhythms and cycles. Each is different. The value statement for each supply chain needs to be aligned to deliver on the business strategy in a way that delivers strength (year-over-year improvements), balance (a balanced portfolio of metrics to deliver against the strategy), and resiliency (consistency despite market shifts) in corporate performance. It is unique for that company. As complexity shifts happen, the supply chain has to be redesigned to absorb the changes. Most supply chain leaders are too comfortable in thinking they have the answers.  Breaking out of the pack requires new thinking. Traditional technologies and processes are not equal to today’s challenge. As a result, leaders have to understand the past, to unlearn what they think are “best practices,” to enable new thinking to drive new solutions. This requires embracing new mental models. 
  • Get Clear. One of the barriers to delivering on corporate performance is a lack of clarity of terms. Words like agility, responsiveness, efficiency, and flexibility need to be clearly defined to take strategy to action. Without clarity in definition, the supply chain teams cannot drive action. All too often, there is an assumption that the words can easily be translated to action. Without clarity of definition, the teams have difficulty aligning. Some of the frequently used terms are outlined in Figure 1. This chart is from a study of 46 leaders in the food industry. Note the range of frequently used words and the gaps. The use of any of these would require a careful definition to drive it to action.  Let me give you an example. One of the most overused terms is the word “team.” When I ask people what this means they look at me like I am crazy; but, the definition of a team is important. The games of football, baseball, swimming, track, and tennis all have different definitions of team play with different rules. You would never ask a swimming team to play by the rules of a football team. How can you ask a team to play together if the rules are not defined? 

Figure 1. Supply Chain Descriptors

  • Carefully Design Regional/Global Governance. A major trap is the lack of definition of regional/global governance. Each discussion will usually start with the statement, “You know Lora, that we are global. And, that we are different and more complex than anyone else.” However, when I ask how they have defined Regional/Global governance, I get blank stares. It is not obvious. Global is not global. Strategic and tactical planning is usually global and done with a product or category focus. Operational and executional planning processes are usually focused on geographic implementation by factories, distribution centers, and third-party manufacturers and distributors.  In 2006, I met a man by the name of Dick Clark that traveled the world working on role definition of planners for Procter & Gamble. This year P&G will be over $83 billion in revenue. There is no doubt about it. The company is a consumer products giant. The P&G system has thousands of planners operating in a very complex matrixed organization. Unfortunately, Dick is no longer with us. Sadly, he died of lung cancer several years ago. But, if he were here, I would love to continue my dialogue with him. In 2006, I asked Dick why it was taking him so long to define the roles of planning within P&G. He had been at it for a few years, and I just could not understand why it was taking him so long. As a result, I would continually ask Dick why it could not be quicker. He had been at it for three years. In Dick’s words, he would say, “Lora you don’t understand. Our work processes are very complex with many conflicting priorities and political agendas. It is not as easy as your writing says. We are global with new employees with little experience and senior employees with lots of experience. Both need guidance. We cannot assume that they know what to do. If we do not help employees understand how their inputs tie into the greater whole of the company, we cannot win in the market. It is that simple.” Unfortunately, there are too few companies that understand the need for the work that Dick did. It was a great lesson for me, and I think it was a major factor in the corporate performance of P&G in the period of 2006-2010.
  • Step Up. Focus on Mid-Management Training. While companies have training programs for entry-level employees and “high-performance” achievers, only 22% of companies have training programs for mid-management employees. With the number of open positions, and turnover of planning positions, investment in talent becomes more important. The changes in analytics, supply chain processes, and technologies require a constant focus on training. The future is going to be quite different from the world today. I am convinced that this traditional sandwich approach will leave many well-intentioned companies with a talent vacuum.
  • Focus Equally on the Important and the Urgent. Today, one of the gaps is the focus on the urgent without leaving time for the important. People think that they need to be busy. They reward the urgent. However, planners need time to plan. Getting good at strategic and tactical planning is essential to be able to manage continuous improvement in inventory turns and operating margin. As a result, leaders need to ensure that rewards systems and job progression paths equally reward the urgent and the important. Work on “what-if planning” and audibles to ensure alignment as the business changes. The best job that I have seen of a company that ties Sales and Operations Planing to operations execution is Eli Lilly. At Lilly, the teams build play books to crystallize what plays need to be called within the month to ensure that the operating teams understand how to adapt the cross-functional plans in play-based market shifts. It is much like a football team sensing what play to call based on how the other team lines up on the field. A football team would never line up without spending time to develop the audibles. Sadly too few supply chain teams take the time to develop the plays based on “what-if analysis” to help the teams know how to operate on the field and in global markets. Only 11% of companies are satisfied with their “what-if capabilities.”
  • Measure Progress in Inches not Miles. Progress in supply chain performance happens slowly over many years. It is measured in inches, not miles. Supply chain leaders have to persevere and stay focused. I loved the quote from Marty Kisliuk, Director of FMC, in the book Bricks Matter,“Progress in supply chain improvements needs to take at least three years.” However, too many companies focus on ”the program of the month,” or “the yearly plan” without ensuring year-over-year continuity.
What do you think of my answer? Interestingly, the overwhelming sentiment of the members of the class was that the biggest issue for them is item #1: The leader that thinks that they know it all. I would love to hear your thoughts.

Or, maybe you would like to join us in our next training session to share your thoughts with the group?  I would love to see you there. Our next supply chain training class is in San Diego on March 25th-26th.  For more information check out our brochure.

I love telling stories and sharing research with the class. It is very reinforcing to see participants’ understanding of supply chain excellence evolve through the use of experiential exercises. The interaction helps me pound out more blog posts. I look forward to seeing your feedback.

For more on Supply Chain talent, check out these blog posts:

What Do We Do NOW?
Out of Africa
Interview with Mike Corbo, Colgate on Building Global Talent
Supply Chain Talent: The Missing Link?

What Do We Do Now?

by Lora Cecere on September 20, 2013 · 0 comments

Supply chain talent is a growing gap for leaders. The impact is great. The biggest issues are in mid-management roles. Let’s examine some of the facts from recent research. Today, 60% of companies have open positions. Fifteen percent of the planning positions are open for an average time of five months. An IBM surveys report that 51% of companies are seeing an increase in turnover of supply chain leaders. Have I convinced you yet to be worried?

If so, let’s start working on an answer. Let me give you the first clue. The answer is not recruiting more college recruits.  There is currently a 9:1 demand to supply ratio for supply chain graduates, and the skill level of new hires cannot stretch to fill the missing mid-management gaps.

It starts with leadership. This week, I have been reviewing supply chain strategy documents for companies planning their 2014 strategies. I love talking to supply chain teams about their future. However, I am surprised that most companies do not see the gap in supply chain talent as a critical need to fill.  The plans that they are sharing are not including the need to move aggressively on building supply chain talent. There is just no understanding that the WORLD TODAY is not the WORLD of FIVE YEARS AGO. Five years ago talent was plentiful, companies could easily recruit for supply chain planners, and it was easier to recruit supply chain graduates. Not so today….

If only more companies had the view of Mike Corbo, current leader of the Colgate supply chain team. In my recent interview with Mike, he said he spent 30% of his time on team development. Notice how talent management is at the top of his mind:

“As an organization, we believe in building talent systems and hiring from within. I take my job as the leader of the 22,000 global members of the Colgate supply chain team seriously.  I oversee succession planning for the supply chain organization.  When it comes to talent management, it is a “single threaded needle.” While I am supported by an experienced and talented supply chain human resource team, managing talent is a large part of what I do.  It takes time. It is 30% of what I do on a day-to-day basis. As a result, the reward and feedback systems for talent development are very consistent. The leader of the supply chain team has led succession planning for the last twenty-five years.

When people come to see me and ask for career advice, I tell them to do their current job VERY well. My advice is to “get real good at something and drive value today.”  I believe that success is not always about moving up.  I encourage members of the team to take enrichment opportunities in other areas of the company or other geographies; but I don’t want them to just spend time, I want them to contribute and learn.  I believe that we should encourage people to move across the organization to get a greater understanding of the business. We do succession planning three times a year. I value cross-functional experiences.

I strongly believe that we cannot let regions operate as islands. We hire with the expectation that people will spend time in multiple regions and multiple functions.”

 What do we do about it?

So, when companies agree that this is a problem, the next question is,  ”What do we do about it?” Here are five steps that I think that supply chain leaders can take today:

  1. Recruit Heavily from Engineering Programs and Train New Hires on Supply Chain Concepts. Today many companies are competing for the same talent from supply chain programs in business schools. An untapped and more available talent pool is in the engineering schools. They can be trained to fill in the process mastery gaps. While they will need to be trained on the practical supply chain processes, they understand the concepts of process systems and they have the raw talent to build both technical and process mastery. In fact in some ways this may be helpful, because many supply chain programs are teaching old supply chain concepts, and very functional views, of the past.
  2. Focus on Making Your Teams Loyal Employees. Loyal and valued employees stay with organizations. Planning roles are at the bull’s eye of this “perfect storm.” Supply chain planning roles have the largest number of vacancies with the longest time to source. So, a perfect place to start is to make sure that your planning teams feel appreciated. Most planning teams have a low-level of satisfaction due to the fact that traditional processes reward the urgent, not the important. The research that we are doing strongly supports that companies that are good at planning are better able to balance costs, inventory and customer service.
  3. Cross Train. Enrich and improve cross-functional understandings through short-term assignments. Use the principles of co-op positions to for permanent employees to give them both job enrichment and cross-functional experiences. The largest gaps are in the areas of strategy and finance.
  4. Invest in Learning. In our recent studies, 1/3 of employees are asked to own their own training programs. And, we all know that training is usually the first thing that is cut in a downturn or a budgetary cycle.  And, as my friend Marcia Conner points out so eloquently in our webinars, training is not the same as learning. Training is only one way to learn. Build stronger teams by embracing learning as a cultural value. One opportunity to do this is through the onboarding of new employees from other companies. One mistake I see companies make over and over again is believing that they have a clear understanding of best practices. Next week, I will teach a class where former P&G, Unilever and Dell employees have joined the same organization. They each believe that they understand “best practices”, but they are unaware of how different their understandings of processes like forecasting, network design, inventory management and sales and operations planning are. Each employee comes with a different paradigm. Use these understandings to forge better processes. Challenge why companies operate in certain ways and be sure to clear understanding of how these processes evolved based on constraints, cycles and market shifts. Help new employees build a bridge from prior experiences to the new environment early and encourage team discussions so that the entire team can to learn through the process.
  5. Don’t Take Mid-Management for Granted. Most organizations have programs for entry-level employees and “high-performers.” Most training plans take mid-management employees for granted. Don’t make this mistake. Build your own learning programs to help mid-management employees build process and technical mastery. While there are historic programs through APICS, CSCMP and other associations, leaders like Colgate, DuPont and Johnson & Johnson are upping the ante to build the next generation of thinking. They feel that these industry training programs have not kept pace with the needs of the industry. Partner with these industry leaders to take advantage of new ideas

These are my thoughts, but I would love to hear from you. Please let me know what steps you are taking. For more on the supply chain talent gap check out these resources.

Webcasts:

Supply Chain Talent, the Missing Link

Supply Chain Talent, the Missing Link 2012

Reports:

Talent Supply Chain’s Missing Link

Supply Chain Talent the Missing Link?

Presentation from the Supply Chain Global Summit:

Powerpoint Slides

Video

Blog Posts:

Supply Chain Talent: The Missing Link in Your Future?

Colgate: A Closer Look at Supply Chain Excellence

Supply Chain Talent: The Missing Link?

Buckle Up! It will be a Long Ride