Shifting Millennium Skills in to High Gear to Drive Organizational Capability
Cathy Martin-Kendrick, C.P.M.
Cathy Martin-Kendrick, C.P.M., Coach/Consultant, BellSouth Telecommunications, Inc., 675 West Peachtree St., 39S40, Atlanta, GA 30375, Tel: 404/420-8775, Fax: 404/525-3045, email: firstname.lastname@example.org
85th Annual International Conference Proceedings - 2000
Abstract. Gaining a competitive advantage in any Supply Chain Management and Logistics organization requires a defined set of skills in the new millennium. How can skills translate to performance and increase organizational capability? What is organizational capability and how does it support a strategic focus in supply chain management? This presentation will address workforce impacts, culture and organizational structure to help you determine the "value-add" of having better educated supply managers who fully understand your business.
Developing a Workforce. An effective workforce is dependent upon having the right skills, motivation, management and environment. While developing a workforce to transition from purchasing to supply management, leaders must pursue efforts in areas that will focus on strategy and make employees as productive and satisfied as possible. A Supply Management Strategy can be defined in several ways. For the purpose of this discussion, strategy is defined as an alignment of buyers, suppliers, customers and processes to achieve competitive advantage. The success of a supply management strategy is linked to a mastery of key elements such as organizational philosophy and structure, human resource development and common metrics.
How does one develop that workforce? Use world class supply chain management skills through investments in training, recruiting and retention of existing talent. When recruiting, define a process that consists of:
- Selecting for talent
- Defining the right outcomes
- Focusing on strengths
- Finding the right fit.
Organizational capability is defined through the type of workforce that you have. In an ideal situation, this begins with the recruiting process. Once candidates have been selected, the next step is performance evaluation. Performance Management links the "HOT skills" and competencies of the new millennium to performance that is tied to business and operational results. Evaluations of performance are outcome and results based and training is determined on an individual level. This is the first step in driving organizational capability!
Additionally, an organizational philosophy with an emphasis on leadership for results is a way to organizational greatness. If leaders focus on "great place to work" initiatives such as the learning organization, unique people practices, development and learning and work life, employees will achieve amazing results. While there are numerous factors such as pay, benefits and opportunities for development that contribute to making an organization a great place to work - these usually are not the things that make people want to get out of bed in the morning!
Once a workforce is selected and performance management initiatives are underway, leaders must focus on retention. Most people want a workplace that generates enthusiasm, excitement and even a few laughs. It is all about relationships, where employees trust the people they work for, have pride in what they do and enjoy the people they work with everyday. The new millennium is bound to reveal what great managers already know: people do not leave companies, they leave managers. The secret to retention and succession planning is for senior leaders to make people development a core value in the corporate culture. When succession planning moves from and an annual event to a continuous process, the culture will include a continuation of good management.
The structure of the workforce is always under constant review. It should accommodate changes in the organization's business and provide skill growth. A succession plan strategy should have long development goals and an emphasis on what is needed based on the overall business strategy. Rather than having position blockage, paths should be created for appropriate turnover in key positions. Successful leaders will be able to assess their bench strength of ready talent with an emphasis on results and metrics. One approach to use begins with the performance model.
Performance Modeling. A performance model is defined as a detailed description of the on the job performance requirements established to ensure business goals and objectives are met. A model that is effective focuses on what people need to do, is process oriented, both proactive and reactive and has unbiased solutions. This is a necessary step to ensure that supply managers fully understand your business. A successful model relies on exemplary performers that have used multiple solutions to achieve operational results. The performance model criteria is a basis for selections in the recruiting process, thus making gaining a competitive advantage a cyclical event.
The model focuses on required skills, knowledge and attributes. The supply manager performance model encompasses the following components:
- Operational measures used to determine success
- Performance results or outputs to be accomplished if the operational measures are to be achieved
- Best practices which, if used, help ensure accomplishment of each performance result
- Measurement criteria used to measure performance
- Enhancers, both internal and external to the organization which encourage performance
- Obstacles, both internal and external to the organization, which will challenge the ability to accomplish the required performance results and
- Critical job-specific competencies, which enable the performance with links to the appropriate performance results.
The following is a list of potential performance results, which have been identified for a supply manager position. These results are categorized into clusters.
Financial Performance Cluster
Administrative and Development Cluster
Achieve Financial Targets
Build Strong Internal Partnerships/Teams
Manage Own Development
Develop and Maintain Market Analysis
Build Strong Partnerships with Clients and Suppliers
Meet Administrative, Regulatory, and Compliance Requirements
Ensure Supplier Performance
"HOT Skills" such as supplier optimization and understanding customer usage are utilized throughout these clusters. Each cluster has a defined list of what must be accomplished, how it will be accomplished and what the best performers do to accomplish it successfully and it an excellent manner. This quality criteria is both quantitative and qualitative as it links back to the operational and business results for measurement purposes.
Here's an illustrative example of a specific performance behavior within the financial cluster:
To ensure that appropriate market analysis is conducted when making procurement decisions.
When determining pricing:
- based on market research, if the market is mature, buying volume may be going down; use the industry average to determine the price and the product life cycle to determine the implications on cost
- if the product is differentiated, price may be stable or increasing; to bring cost down, work with the supplier on cost of production, distribution and/or total supply stream cost rather than the margin
- if an exact margin of a product is unavailable, use a similar technology with a similar production cost and interface to determine the margin; then to determine price, adjust pricing to compare with industry averages or similar product lines
- solicit input from a qualified/experienced team member.
Reduction in cost of overall supply stream is achieved.
Organizational Capability. Businesses constantly strive for a competitive advantage in their marketplace. The essentials include developing a highly motivated workforce and a high performance culture. Fundamental shifts will occur in the culture that holds the workforce accountable for outcomes and where managers are given authority to do what it takes. The cultural support depends on an organizational structure that integrates functional expertise and process orientation.
The fundamental shift however, is not in structure. It is a behavioral difference in people. Simple people become sophisticated people. Simple jobs become complex jobs. Complex processes become simple processes. As a result of this behavioral shift, high performance will abound and a new spirit of service will arise. An improvement orientation develops and creates customer and shareholder value. A competitive advantage is gained and derived from superior processes as process owners, coaches and leaders emerge to develop industry leadership.
To gain a competitive advantage in the new millennium, the time to start is now. Although gaining that advantage is a cyclical event, the best advice is to begin with the easiest first. What determines easy is based on where you are today. Fill your tank with a snapshot of your supply chain management strategy, organizational structure and human assets as they are currently. Check your engines with your senior management leaders and have them engage your team in the design for the future. Then, design a roadmap that includes performance planning, recruitment, retention and measurements. Communicate your vision to the entire team; put your plans in high gear and DRIVE ON!
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