Tag Archives: Art of Procurement

Reality Check: The Contingent Workforce is Here to Stay

worker

Are you an employee or a free agent? In May 2008 at ISM’s 93th Annual Conference in St. Louis, I heard Daniel Pink speak about the “Changing World of Work”. When Pink’s “Free Agent Nation” was released in 2001, there were independent free agents, especially in consulting roles, but the number in comparison to the total workforce was small. While many doubted the disruption of the contingent workforce in 2001 and even in 2008, there’s no doubt of its impact today in everything from how we travel by car to the workforce at Fortune 500 companies.

When you think about it for procurement, it makes sense that an independent agent with experience and knowledge in a category of spend can quickly assess the supply market, benchmark price and cost, develop a strategy, negotiate an agreement and then move on to the next assignment. This leaves the supplier relationship mangers to execute the contract and manage the relationship for the term of the agreement. This year, particularly, the contingent workforce has been a hot topic in procurement media and research. I recommend reading and listening to Ardent Partners research and Contingent Workforce Weekly podcasts, Art of Procurement’s podcasts on the contingent workforce and SpendMatters research and upcoming “GE Digital on the Future of Work” webinar to gain insight on where we are and where we need to be to optimize the “free agent nation.”

For CPOs, the contingent workforce will play an increasing role. While the budget for contract labor will increase, but companies will be released from the burden of taxes, healthcare and insurance costs, and other full-time employee costs. The key to success is to capture expertise in the short term, then have the contractor move on. The CPO can manage more strategic priorities with the right balance of FTEs and contingent workers.

It’s important to understand that the ways we work are constantly changing and evolving. With artificial intelligence (AI) and the internet of things (IoT), it’s apparent that some of the work humans currently do will be replaced through business system integration across the supply chain. We’ve certainly evolved from the days when Eleanor Roosevelt said “We have reached a point today where labor-saving devices are good only when they do not throw the worker out of his job.” Now the work and the labor force has changed – we can see the way forward to work more strategically and drive innovation.

I am structuring my company’s organization to reflect the value and opportunities available using contingent workers. What about you?

Was Daniel Pink right?

Five Key Personality Traits of Successful Procurement Leaders

personality

It goes without saying that technical procurement skills and business acumen (listen to Jim Barnes on the Art of Procurement podcast) are the prerequisites to be successful in procurement. While these skills will take you far, they may not be enough. From studying procurement and supply chain professionals across the globe, I have noticed five personality traits that separate mediocre from highly successful leaders. I love it when data backs up observation, especially since these observations aligned with a SpendMatters and ISM procurement personality survey in 2015, which found that Myers-Briggs personality types ENTJ and ESTP were the top personality types for CPOs.

  1. Flexibility and Agility – procurement leaders operate in a highly dynamic environment where acquisitions, mergers, bankruptcies, economic changes, risk and regulation can change both the daily routine and strategy for procurement. The ability to move with the dynamic world is one of the differentiators between successful and run-of-the-mill procurement practitioners.
  2. Communication and Relationship – building stakeholder and supplier relationships based on trust, mutual benefits, innovation and that delivers value is a core requirement for procurement leaders today. To develop these skills, a leader must be an expert listener and an even better communicator. The ability to communicate, listen and build strong relationships can make a difference in a corporation’s success or failure in the marketplace.
  3. Objectivity – many procurement professionals are solely focused on cost. Their relentless drive for cost without understanding the suppliers’ financial makeup can be a disaster. All suppliers have to make a sufficient margin to reinvest, satisfy shareholders, and innovate. Successful leaders maintain objectivity and understand the drivers behind the suppliers cost and typically receive more value than their competition. Maintaining this objectivity enables them to keep things in perspective, balancing cost and value opportunities.
  4. Learning by Experience – in organizations where procurement professionals have developed and changed strategies frequently not allowing the strategy time to embed always fail. Consequently, it is not uncommon for these organizations to make mistakes and continue to make mistakes without learning from the previous strategy. The most successful procurement leaders learn from experience and drive continuous improvement.
  5. Confidence to Acquire Top Talent – professionals who are reluctant to bring in high-level talent for fear that they will be overshadowed and potentially displaced achieve suboptimal results. The best leaders bring in the best talent and lead that talent to deliver high levels of performance. The confidence to on-board, coach, mentor and execute strategies is a valuable asset to any organization.

Perhaps the most important skill of a leader is giving back to the profession and having time for everyone.

How does your personality match up?