Supply Chain Talent: Get it Right or Nothing Else Matters

Shay Scott

Executive Director, Global Supply Chain Institute at University of Tennessee

Learning Objectives

Supply chains succeed or fail based upon their talent. The best strategy paired with innovative technology will melt in the hands of an incapable or unwilling organization. Yet, many supply chain organizations take an improvised approach to talent development and retention. Organizations are hesitant to invest in development or retention and often employ one-size-fits-all plans that work for no one. This session will dispel common myths that persist about talent development and offer a strategy for how to systematically approach human capital as the core enabler of supply chain management that it is. While much of this discussion is generalizable to any organization, the evolution of integrated supply chain management and its progression into a digitalized era make talent THE critical challenge for supply chain leaders.


Key Takeaways:



  • Identify and challenge the typical HR rules and norms that will atrophy a SCM organization

  • Start with the big picture. All too often, myopic perspective reigns in SCM talent development and retention


"If you've got a business imperative and you invest in training and development from a key employee set around that, then expect them to deliver improved results."

Shay Scott

Executive Director, Global Supply Chain Institute at University of Tennessee

Transcript

Hello, I’m Shay Scott. Thanks for joining our session today. As Executive Director of the Global Supply Chain Institute at the University of Tennessee, I have the honor and privilege of interacting with a wide group of practitioners, top researchers, and innovative and energetic students. This topic of Supply Chain talent inevitably comes up. In particular, as we talk with our global Supply Chain Institute’s Executive Advisory Board, this topic comes to front and center and many of the discussions. It really drives why I entitled the session “Get it Right or Nothing Else Matters” because I think that captures the perspective that many of these leading executives have on this topic of Supply Chain talent.


As we start today, I’d encourage you to take a little bit of an introspective look. This session is a lot about changing your perspective on talent. So just to start, I’ve got a few questions. Do you have the Supply Chain talent to deliver what your organization needs in 2021? In 2022? If not, is this a strategic priority for your senior leadership team? When I talk about a strategic priority, I mean something that Garner’s substantial investment of time, effort, energy, financial capital? If so, what steps is your company taking to get ready? Or what’s keeping this from becoming a strategic priority? So as you consider how you and your own organization views and thinks about this area of Supply Chain talent, let’s dive in.


Today’s focus, I want to start by talking about why does this area of talent take on a special importance for SC and leaders? Undoubtedly, talent presents a challenge across all areas and aspects of the organization. But SCM, we believe, represents a special case. Next, I want to cover some harmful and we found pervasive myths in companies about this area of talent development. These myths keep us trapped in mindsets that keep that really prevent us from moving forward. Finally, I’ll end with some practical approaches for what you can use to make progress in this area.


As I said at the beginning, what makes SCM talent development different and challenging? I’ve highlighted five things here, and I’ll just touch on two of them as you’re able to take in all five via the screen. The first I would highlight would be SCM is quickly changing. With us entering the area of Supply Chain management digitalization, with a changing perspective on international trade, and a better understanding of areas of risk such as the COVID 19 pandemic, the Supply Chain management field is really reinventing itself regularly, which means that we need talent that is able to push those agendas forth.


Second, boundary spanning. When we hire in Supply Chain, we need talent who are technically proficient to be able to keep up with the advances of the field, but that also excel at relational skills that can boundary spanned two different functions within the organization and also both upstream and downstream to partners, suppliers, and customers outside of our own four walls. These things make talent development in Supply Chain management quite challenging, and in many ways, a special case to other areas in the organization.


Moving on to this talent management process. When you look at this, you say, “Oh, this is quite basic.” It is, but it came from some research that we did with leading companies across a variety of sectors who really excel in this area of talent management. As we stop and we consider it a little bit longer, I will predict that your organization tends to center on recruit and retain when you think about talent management. There’s an open requisition, or we need to staff up, or we’re going to need to shrink our staff—that’s in this area of recruiting and retaining. But what we found differentiated those best organizations was they also focus on analyzing, finding, and developing. So we’d analyze just very quickly, they took their Supply Chain strategy, and they built a talent strategy, and they said, “What skills, what experiences, which capabilities do we need to develop in order to succeed?” and that drove their talent process. As they had those skills and experiences and capabilities, they began to look for sources, for pockets of talent that they could find, and whether it was other industries, potentially even some competitors, but also schools or geographic areas. That data and that plan really drove the recruiting process to be quite a different look than traditionally were, “Oh, we have an open requisition, let’s open it up and hire the best person we can find.”


Similarly, the development process. They had formal plans, strategies intended to invest much more heavily in developing that allow them to retain and have the choice of their talent, which ultimately paid dividends from a business case perspective. So even as we think about the most basic talent management processes, I think we should widen our gaze to really think in a more strategic way.


This second part of the session, I want to talk about these myths. I use the word pervasive before. We see them regularly as we work with organizations of all sizes, and really all calibers, and also across geographies. This is not only in the US, it persists in other markets too. I want to take some time to go through each of these myths individually, rather briefly, because I want to, hopefully stimulate some thought and help broaden your perspective around them.


First, talent management is HR’s responsibility. Again, this is a myth, this is not true. Talent Management is the primary responsibility for you as a Supply Chain leader, and abdicating responsibility to a centralized Human Resources organization, or allowing even that organization to force fit policies that don’t advance the Supply Chain is a mistake that we see often made. Budgets are very small. They’re evenly spread totally from an equity perspective, as opposed from really advancing the areas of the organization that need impact. There’s not an integration between what learning and development happens and the business priorities and imperatives that we have. So talent management is the Supply Chain leader’s responsibility, not Human Resources.


Talent Management can’t be measured or managed. We hire good people, and then we trust that they’ll do their best. We have been able to advance the field of Supply Chain by improving the way we design processes and we measure and we design incentive systems and organizational structures to support the exact same is true of talent management.


Focus on the results. If you’ve got a business imperative and you invest in training and development from a key employee set around that, then expect them to deliver improved results. Just as an example, as an aside one of our own programs here at University of Tennessee, our Executive MBA for global Supply Chain, we have each student do an individual project that returns a financial ROI back to the company that vastly by multiples, pays that expense back. You should be doing the same even in your internal learning and development programs.


Three, we cannot afford to spend significantly to support talent development. This follows along from the second myth, if we can’t manage it, then we can’t really spend. You can manage it, and you must spend significantly to develop talent. We need to build business cases that look like the same business cases that we build for physical footprint expansions, for information technology systems with clear ROIs. Talent investment should be made similarly to those other decisions. There are real cost. Replacing an employee that you didn’t develop on average cost two to four times their annual salary. Just think of what you could do from a development standpoint by only spending a fraction of that money.


Number four, talent development primarily about teaching SCM content. It’s true, there needs to be technical proficiency, but it also comes along, there needs to be this relational agility and competency and capabilities. Those need to be married together. You really can’t have one without the other. So it’s not possible in our research to say, “We’re going to send our employees to a disconnected generalized Leadership Program, and then we’re going to send them to Supply Chain strategy, education, and development.” Those two things need to come together and the development happens in a concerted way.


Number five, a one size fits all solution will work for Talent Development. I just mentioned, oftentimes, when it comes to L&D opportunities, we fit into a standardized mold that our centralized Human Resources organization has for us. Those programs typically do not fit the bill for what we need. There’s not a lot of recognition on the requirements around success in Supply Chain management. So the one size fits all solution doesn’t really work very well. In most cases, that forces us to dig deeper. To really understand why do we need this particular program, specifically what objectives will it accomplish and what financial ROI will it provide back to our business.


Keep it on the same theme, internal or external resources are always better. Some organizations say, “We only do our training and development internally, we know our business, and we teach our people.” Others say, “This is important, so we engage a top tier consulting company.” Either of those could be the right answer. They also could be the wrong answer. It depends on the situation. Again, this one size fits all strategy doesn’t work most of the time. Development happens primarily in a classroom.


Number seven, learning happens everywhere. The key is to fit this knowledge into a framework that allows the employee to internalize it and make decisions differently. To do this, you must have a system. There’s a widely known 70-20-10 model that we’ve seen work fairly well, where about 10% of the learning actually occurs in a formal classroom environment, whether that’s online, whether that’s face to face. The next 20% helps the employee apply that through coaching through mentoring. Then, the remaining 70 is experiential, it’s on the job. None of these three categories works without the other two. The experiential does not work without the framework that come through the formal class experience and the coaching and mentoring that helps assess and direct the employee. So that system needs to really be taken as a whole.


Number eight, talent development will happen naturally and informally. We’ve not seen that. People are too busy. They need structure, they need accountability to really internalize and develop a framework that drives them to make decisions differently. So certifications, whether they be internal certifications or external degrees, those types of things provide an excuse for employees to be about this time consuming task of learning.


Number nine, talent development is less important than the issue [unintelligible]. What I mean by this an example we often say, “Well, we’re not paying competitive wages, our benefits are up to up to scale of our competitors.” Those things may be true, but we’ve seen in research—this particular A piece of research is a little bit dated—but the same thing holds true. Employee engagement is one of the areas that’s most important. For companies that lean in and develop their employees, the employees really become passionate about the work, and the other things take care of themselves generally.


Finally, wrapping up the section around the myths. We’re so far behind that we should give up now in this area—myth number 10. As we pull companies, most of the time when people self report, they tend to exaggerate how successful they are or their level of attainment. What we’ve seen in this area is the opposite. People tend to underestimate kind of how well they’re already doing because it’s not organized and it’s not structured. So I just offer you an encouraging word. If you’ve listened to these other nine myths, and you say, “We fall prey to almost all of those,” it’s not hopeless. You can take one step at a time and really have a significant ROI from this area of talent management.


Briefly, what are the best companies doing today? We did some research not long ago. We went out, we did interviews with a range of companies across different sectors you can see there. What we found were some similarities across all of those companies. First, they have a formal talent management strategy that pairs with their Supply Chain management strategy. Second, they employ this best of breed system that I’ve talked about to develop their employees. Third, they measure it. They view talent development as a critical success measure, which allows them to support and also track it.


So practically, what can you do? First of all, let’s stick with this mindset change. Approach talent management like you would other areas in SCM. We have a natural ability to do this as successful Supply Chain leaders because we’re used to having a clear vision, a clear strategy, a clear plan. Establishing value creation and KPI metrics, and measuring to those. Thinking about things like continuity and risk mitigation. Making make by decisions, do we go external for that resource or do we develop it in house? Always getting better. These best of breed solutions we talked about. Making it a priority before it becomes a crisis. These are things that we are used to doing as Supply Chain leaders, but so often what we see is we don’t do those as formally as successfully in this area of talent as we do in other areas.


So practically, what does that mean to do is we think about building the Supply Chain talent management strategy. I put some things up on the screen that would come natural to us. Determine the role talent must play in accomplishing strategic goals and priorities. Are we wanting to make a large step? Are we entering a new market? Are we changing our Supply Chain model? If so, our talent strategy is going to look very different than if it’s just business as usual, and we’re in a mature market.


Be sure everyone knows what you know. Internal learning, cascading that knowledge, and that’s across business functions and as well as within and outside of the Supply Chain, across levels in the organization, across geographies, then validate what you know. There are a number of valuable certifications out there, whether they be trade association certifications, or industry certifications. Do benchmarking, even like this Quartz Network platform allows you to do some benchmarking to see what others are doing. Build that learning culture. One that’s counterintuitive is selectively choosing key talent and investing deeply.


If we go back to myth one, our base case with HR is to evenly divide money up across the entire employee base. What we’ve seen leaders do is instead choose a strategy to disproportionately invest in the areas of the organization and in the individuals in the organization that can really bring about advancement of your particular strategy. Finally, things that we’re used to doing in other areas of our business measure: catalog, communicate, improve.


I hope this conversation the session today is really spurred you to continue the conversation in this area of Supply Chain. I hope you’ll do it here on the platform provided by Quartz Network. I encourage you to share best practices, share things that have worked in your own organization, and also ask questions. Hopefully, we can work together to continue to build the talent around this important function within the organization of Supply Chain management. I hope you have an excellent day. Thanks for giving your time to join with the session.


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