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How to Develop Your Procurement People in 2012

The impact of talent management trends on the procurement profession.

Talent is high on the business agenda for 2012. According to Dr. John Sullivan (Professor of Management at San Francisco State University), it will be tough to retain the best people in the existing workforce and motivate them to stay high-performing in difficult market conditions. In his recent article “10 Predictions for 2012: The Top Trends in Talent Management and Recruiting”, he says “more than a majority of employees are willing to quit their current job as soon as a better opportunity comes along”.

Dr. John Sullivan predicted a number of people management 2012 predictions for ERE Media. Some of these are particularly relevant for procurement talent development. This is because many firms are seeking to further tackle cost management next year using the support of their procurement teams. Hence the importance of targeting the right support for this community and ensuring their learning is translated to daily work.

Some of the key trends:

1.     Risk Identification

Dr. John Sullivan says that Managers must consider “the economic ‘risk’ associated with weak hiring, the absence of developed leaders, and the cost of turnover of key talent.”

We must therefore understand the sources of procurement talent risk. When ADR are providing procurement consultancy to organisations, we recommend using recruitment as a chance reduce organisational skills gaps by hiring the right person in the right role, regardless of what the “official” job vacancy is. Instead of ‘back-filling’ for the person who has left the position, it is better to understand what the current business needs are, and what skills this requires. Several organisations we work with use ADR’s Development Needs Analysis (ADR DNATM) tool to assess the skills of recruitment candidates against the competencies identified as essential for the new hire. Some of the key themes that the ADR DNATM tool has identified as being important capabilities for 2012 are:

·         Influencing at Executive Level.

·         Change Management.

·         Financial Analysis Skills.

Where a staff member has concerns over a perceived lack of development opportunities, funding is not always available to meet the expectations of the professional.  Many of our clients find that mentoring by procurement managers (particularly cross-category) can deliver good learning outcomes. The benefits arise from the real-life application and hands-on advice for current work. Line managers often lack the experience to support others in this way. We often find that training this community in Procurement coaching skills can deliver a “multiplier effect” based on the train-the-trainer approach.

2.     Customisation of Learning

Dr. Sullivan notes “Rather than the traditional ‘one-size-fits-all’ retention strategy, a targeted personalized approach will be required if you expect to have a reasonable chance to retain your top talent.”

 At ADR, we use competency assessment to tailor learning approaches, but customisation is especially relevant for the identification and development of high potential individuals. These procurement professionals often have the leadership qualities required to achieve some of the more challenging cost improvement projects we will see in 2012. These projects include value engineering, demand management and performance contracting, as they drive a step-change in the value that the Procurement organisation delivers. We find that learning events specific to high potential individuals yield better outcomes than “mixed capability training”. This is because:

·         A dedicated event suggests a high expectation of a return on investment from the participants.

·         Clustering these individuals spurs creative thinking and helps solve each other’s challenges.

·         Learning is focused on the commitment to post-event action planning.

In ADR’s experience, having the commitment of senior management at such events elevates the status and motivation of the participants, and can also be used to recruit project sponsors.

3. Integration

Another highlight from Dr. Sullivan was the importance of people development activities working in unison.  Many Procurement organisations are planning a 2012 Procurement Academy launch. The online learning framework of an Academy can offer:

·         Links between HR systems and personal development plans.

·         Visibility of the competency framework, and the progress of learning against it.

·         The ability to assess, develop and re-assess the competency of Procurement Professionals

All of this helps the people development culture to be “pull”, not “push”. An Academy supports personalised learning pathways based on individual role, career aspiration, skills strengths and areas for development. Dr Sullivan says about skills assessment “vendors, software, and tools continue to improve in this area that will become increasingly important.” For example, ADR DNATM is used not only to determine the training plan, but to inform workforce mobility and team change resilience.

4.     Revenue Impact

According to Dr. Sullivan, “increased economic pressures will continue the trend of forcing all functions (including talent management) to convert their functional results into business impacts in dollars”.

In 2011, much Procurement training was a hygiene factor to maintain a sense of normalcy in a highly volatile business environment. We are finding that organisations have interest in greater investment in procurement learning for 2012, coupled with a need to embed, apply and drive business benefits. For example, our Cost Analysis Training includes participant pre-work that is analysed by expert tutors and used in a “Master Class” style event. The training is a mix of lecture, group work and discussion. Tutors recommend approaches to tackling the cost challenges contained in the pre-work, addressing analysis and negotiating behaviours. This blended approach is suited to small teams, and provides a fillip to procurement professionals looking for new ideas to spur a renewed challenge of cost.

As the global economic environment presents a greater need for organisations to protects profitability through effective cost management, the importance of Procurement Talent Development is clear. These insights provide some direction of how to approach this complex area and gain the most impactful results.

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