It may be the Jubilee weekend, but who is your 'king'?
May 31, 2012 1:55:00 PM
As we here in the UK prepare for a long-weekend full of festivities in celebration of Queen Elizabeth's Diamond Jubilee (marking 60 years on the throne), I began to reflect on the importance of experience and knowledge particularly as it relates to business.
Today's business environment is more complex than ever, thanks to the rise of globalisation, the impact of natural disasters, an unrelenting wave of economic and political turmoil, and more recently the 'shareholder spring'. And there are multiple (and multiplying) schools of thought on management practice - for example there are a monarchy of conflicting clichés (cash is king, knowledge is king, customer is king, etc.). All of this means that the knowledge, expertise and experience a person (or team) holds today, may not be relevant or applicable tomorrow.
Dr Joanne (Jo) Meehan, Lecturer in Strategic Purchasing at the University of Liverpool Management School, during a recent interview (read the full interview here) commented "there is a difference between skills and knowledge. Traditionally, universities were focussed on giving students the knowledge, giving them the model frameworks that they can fall back on. Increasingly, it does need to be more than just knowledge and particularly in a very applied area like business, students need to have the softer skills. Its often the softer skills that determine whether something works or not."
The frameworks many of today's procurement leaders were taught 10 years ago were heavily focused on getting the most from the supply market - negotiation, 7 step sourcing processes, risk mitigation etc. But as businesses evolve in their complexities, so too do their expectations of their procurement operations (and all business operations) - with a shifting focus from cost outcomes to value outcomes. As such, many business leaders are looking for people with skills that can adapt and change in response to shifts in business direction.
However, these softer skills are often ignored over the harder analytical, market focussed skills which seem to define procurement today in many businesses. Why is that?
- A greater focus on stakeholder management inherently carries an opportunity cost, as it will take people's time away from some of the market focused activities (sourcing, negotiation, contract management)
- It is much harder to measure the output of applying such skill-sets. And worse, the output is often 'unseen', e.g. risk mitigation (ensuring something doesnt happen), or enforcing compliance (ensuring compliance doesnt drop).
Many procurement practitioners argue that they simply do not have the time or resources available to re-skill their current workforce, quite often looking to third party service providers to provide the bridge between procurement and the business.
Education bodies are beginning to acknowledge this trend and increasingly looking to teach the next generation of procurement leaders the softer people skills such as stakeholder relationship management and change management.
Jo Meehan finished off the interview by stating "we're conscious of the need to equip our students as the leaders of tomorrow - that means not just getting them to answer questions correctly, but in business it's just as important to get them to ask the right questions. I structure my teaching around developing students to think about what I call the three C's - getting students to Challenge (ask the right questions), Choice (think about options and how things could be improved), and Consequence (this is the 'so what?' question what are the impacts of decisions they make)."
Ultimately, both skills and knowledge need to be relevant to the business that they are being applied to in a way which adds-value - as defined by business. They are both king.