Following a recent talk to a group of CPO’s in London in September 2019 it became evident that the topic of the profession in itself is of great interest to the leaders of the function. The advent of I4.0 (Industrial revolution 4.0), RPA (Robotic Process Automation), AI (Artificial Intelligence), GDPR (General Data Protection Regulations), et al have all played a part in instigating change as the new normal. The recognition more than ever that our heuristics (experiences) to aid judgement and decision making are less and less valid or reliable is a reality we must face into either as a risk or for some an opportunity.
I'm sure we will have all read the various white papers commissioned by the many and varied proponents of digital attributes/systems in procurement proclaiming “digitalise or die”, but the agnostic amongst I’m sure value a more objective and unbiased view of the world before us. The reality is that harnessing all the possible and credible approaches and/or attributes will be necessary if we are to succeed to any level, and therefore embracing processes (category management in any flavour or variant), systems (P2P, spend classification, e-auctions, etc), Digital (EDI), and last but not least People (specialists, analysts, generalists, leaders, et al) are all necessary to create value in the new world, not just one attribute above another.
To be clear the definition proffered by Torn et al (2018) stating that I4.0 is “characterised by cyber-physical systems with autonomous machine to machine communication” perhaps best describes the term. In this the shift from 3rd generation systems becomes much clearer. The questions surrounding how we address as an entire business, cyber security, GDPR, RPA, AI and more should be a call for collaboration on a greater scale than we have ever seen before. This, then signals the skills needed to bring about this new world reality as an imperative for people to change and re-skill. This will require investment on the part of the enterprise (fiscal and enablement to purse) and personal (self-directed and purposeful learning to address the new skills demanded).
Looking at the leadership level through this new lens the World Economic Forum (WEF) advocated six dimensions;
1. Responsibility and Accountability
2. Systems leadership
3. Technology leadership
4. Entrepreneurial leadership
5. Adaptive leadership
6. Shaping societies
This fully embraces the profession of procurement & Supply chain. The report WEF: Leadership in the Fourth Industrial Revolution 2018), from which the leadership dimensions are cited, also highlighted that;
The skills of today are not the skills of tomorrow
Skills will have a half-life of 5 years
Leaders will need to guide the learning journey
Perhaps more dramatic is the fact that investment in intelligent technology is set to increase by 60%, versus 3% for the skills to use it!
The opportunity for the most inspirational and effective leaders will come from a people centric organisation that recognises early in the forward journey that “their leadership behaviours” will be one of the single biggest attributes that turns risk into opportunity for the enterprise and the individual. Finally, in this context the WEF posited that transformational leadership with people at the centre needs;
i. Leaders to inspire with empathy and vision
ii. Innovate with passion
iii. Advocate humanity, trust and compassion
iv. Collaborate across the ecosystem
v. Orchestrate for agility and growth
vi. Embrace social responsibility
I have long advocated the use of critical thinking skills, emotional intelligence, soft skills and creativity and even wrote a book about it in 2018 (Soft Skills for Hard Business: Cambridge Academic 2018). This was later supported by the research carried out by McKinsey Global Institute in 2018, as illustrated in their workforce skills model, shown below:
This brings the focus full circle to an article I wrote in January 2018: Procurements relevance as a business partner: Value Architect, whereby the reconstructed role of value architects, derived from the strategic thinkers and thought leaders in procurement and supply chain. Will not only have the skills and competencies derived under the social, decision and behavioural sciences, et al, but will be known for value creation through, but not limited to:
Making sense and translating internally and externally the contributions from internal subject matter experts and the wider supply (value) chain.
Incremental innovation to create competitive advantage as a facilitator or enabler
Articulate value over cost savings
Ensure reputational guardianship
Aggregate and integrate the best of what is available
Creatives that exude the entrepreneurial spirit and business acumen of a start-up leader
Be recognised for critical thinking skills
Understand where and how intervention will positively contribute to an outcome and be the one to create the (choice) architecture to achieve this
Socialise the use of decision support systems
Challenge socially constructed traits (enable talent to contribute where it can, not where it is allowed)
I hope this article has inspired and prompted new and critical thinking about the profession and stimulates further debate to truly advance the profession.
The Procurement Doctor blog (www.procurementdoctor.com) has been designed for procurement and supply chain professionals to share best practice in order to improve both our profession and its reputation, and to bridge the gap between academia and practice.
Come and join the debate – contributions, articles and editorial content always welcome
David L. Loseby is a procurement professional with over 25 years of experience as a senior procurement professional and is the author of “Soft Skills for Hard Business” (Cambridge Academic Press) – a book that focuses on procurement effectiveness through the development of soft skills.
Copyright © The Procurement Doctor.com
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Permissions”