DC Velocity - IdeaBook 2016

on job rotations, the top supply chain executive for one specialty retailer deliberately shifts directors into unfamiliar and uncomfortable roles before they are offered a vice president-level position. For example, the longtime distribution director transitioned into the role of transportation director for a year. This individual quickly learned the transportation function with support from knowledgeable direct reports and guidance from senior executives. This initiative gives participants another perspective of the supply chain, requires them to manage a broader array of strategic trade-offs and challenges, and compels them to build relationships with a different group of suppliers and customers. Collectively, this broader exposure helps to round out the supply chain capabilities of potential future leaders.

WISELY LEVERAGE THE FREE-AGENT MARKET

Each year in professional sports, some veteran players will choose to enter the free-agent market rather than stay with their current teams. This allows the players to pursue new opportunities and potentially sign lucrative contracts with different franchises. Free agency also allows a franchise to quickly fill roster gaps and potentially sign the superstar who will carry the team to a championship. Of course, success is not guaranteed, as a player’s fit with the team or capabilities may not work out as expected.

In a sense, organizations can also pursue supply chain “free agents.” Hiring external talent can be a logical solution, particularly when there is no internal candidate with the appropriate skill set or experience to fulfill a critical role. This strategy can also supplement the supply chain talent pool without putting pressure on the company’s bench strength.

Companies should recognize, however, that the free-agency model presents risks. Hiring outsiders— particularly for senior-level supply chain roles— may create animosity among current high-potential employees, upset the existing salary structure, or require a longer-than-expected acclimation period. For these reasons, the free-agency model should be used sparingly to supplement internal development and succession-planning efforts.

To make external hiring successful, supply chain
executives should use a combination of proactive
recruiting methods. The overwhelming majority of
companies in our study view executive recruiters as
the most effective method for recruiting senior-level
SCM professionals.

The beverage company mentioned earlier subscribes to this multipronged recruiting approach. It uses “headhunters” that specialize in the food and beverage industry to help fill managerial and department leadership roles, and military-transition recruiters to link veterans to supervisory roles. Supply chain executives work with their HR counterparts to thoroughly vet the capabilities, experiences, and cultural fit of candidates suggested by these external recruiters.

WHAT IT TAKES TO WIN

It takes more than a standout talent like the legendary basketball player Michael Jordan or ice hockey’s all-time top scorer, Wayne Gretzky, to build a dynasty. Senior executives need to surround their superstars with the right talent. And it doesn’t happen overnight: Recall that the Chicago Bulls did not win their first National Basketball Association championship until Jordan’s seventh season. Time, resources, and a comprehensive talent strategy that cultivates top prospects across the system into long-term franchise players are required to build and maintain a winning tradition.

The same goals and requirements apply to SCM talent management. Savvy supply chain executives recognize the role of depth charts, tailored training, short-term assignments, retention strategies, and outside hiring in augmenting their current leadership team, and they are using adaptations of these tools to groom future leaders and a highly capable support organization. Those who take inspiration from sports teams’ talent-retention and succession-planning strategies will be able to develop the nucleus of a long-lasting dynasty of their own. c

Note:

1. C. John Langley Jr. and Capgemini, 2015 Third-Party Logistics Study: The State of Logistics Outsourcing—Results and Findings of the 19th Annual Study (2014), www.3PLstudy.com.

BRIAN J. GIBSON IS WILSON FAMILY PROFESSOR OF SUPPLY CHAIN MANAGEMENT AT AUBURN UNIVERSITY, AND SEAN P. GOFFNETT AND ZACHARY S. WILLIAMS ARE ASSOCIATE PROFESSORS OF LOGISTICS AND MARKETING AT CENTRAL MICHIGAN UNIVERSITY.