Welcome to second half of our interview with strategic sourcing executive Steven Forth. In the first installment, we discussed the unique challenges in hiring for strategic sourcing, as well as the differences between transactional and strategic procurement from a talent perspective. In part two, Steve delves into some of the differences between strategic sourcing in the public and private sector, as well as offering his opinions on which industries are producing the highest caliber of strategic sourcing talent, and whether there’s a supply chain talent deficit.
The Public vs. Private Sector Distinction in Strategic Sourcing
We asked Mr. Forth about what distinctions he sees between strategic sourcing in various industries. “Just shooting from the hip, historically I draw the line between private and public sector. When you work in the private sector, all the decision making happens under a single roof, one corporate identity. In the public sector, the decision making process is often done as a group and in my current environment we operate as a group purchasing organization (GPO). By virtue of its construct, we rely on the input of many people from hospital organizations totaling about 100 people. Trying to create consensus and get everybody onto the same page to make the same decision can be a challenge.”
In terms of hiring, he says, “In the public sector, you’re usually given a job description and you live to the code of the job description. In my experience with the private sector, there’s more opportunity to be entrepreneurial and make a difference in process, strategy and outcomes, so it just seems easier to do.”
Which Industries are Producing the Top Strategic Sourcing Talent?
“My opinion would be that by and large, the financial services sector has excelled in the strategic sourcing area a great deal,” Forth remarks. “Insurance companies, banks, and investment firms. All you have to do is look at the industry consolidation, which has gigantic footholds in the US—and they have mature sourcing strategies. This is primarily because they have both the ways and the means to insist that their level of talent be seasoned. Beyond this, as an industry, they recognized early on that a confident and advanced strategic sourcing group is a key way to achieve operating cost efficiencies and advantages for their shareholders.”
“The other thing is the scale. Banks have a gigantic spend. But I would not overlook some of the manufacturing areas also, although the application is slightly different. You could look at the automotive industry and say that there are advanced people at places like Ford and Chrysler. In Europe you have advanced people at BMW, Audi, and Mercedes-Benz.”
Skills Required for Strategic Sourcing in the Medical Field
Forth is currently the VP of Strategic Sourcing at a major Canadian group purchasing organization in the medical field, and he identified some skills that really stand out in his current niche. “What makes this operation particularly unique is that you add the additional layer of complexity that comes from managing so many different groups. Our entire infrastructure is based on four committees, each with a team of 25 or more people.
“Some of these teams, depending on the clinical aspects of what is being sourced, require subject matter experts to be involved in the procurement process. So that will increase the number of people involved in the sourcing activity. One of the most important dynamics that often gets overlooked is people skills. Someone who can strike the balance between being a strong, clear, approachable, and decisive communicator that remains open to negotiation and compromise, but also a professional that is able to drive forward an agenda that’s good for all. That ability to navigate the whole structure is the stuff that makes somebody here successful.”
The importance of strong people skills and related “soft skills” are something that continues to come up in our discussions with procurement and strategic sourcing leaders. Forth highlighted how, in his efforts to develop strong strategic sourcing talent within his organization, he has eschewed the recommendation of purchasing certifications, instead sending individuals to classes focused on boosting their people skills and presentation abilities. “They gain confidence,” he emphasizes. “They think more clearly, learn how to better organize information—all kinds of things that aren’t related to the latest and greatest version of a purchase order or an RFP process.”
Is There a Strategic Sourcing Talent Deficit?
Finally, we wanted Mr. Forth’s take on our much-discussed issue of the pressing supply chain talent deficit. Speaking about senior executives in strategic sourcing, he remarks, “I can think of guys that are a bit older than me who retire, and then the next day after they’ve hung up their hat, they’re consulting and with no shortage of work. There’s something to be said for individuals like that who can find work quite readily at considerably higher prices over what they’re being paid as an executive. That says something about the drought of talent in that particular marketplace.”
“It almost seems like when these people spin off and start their own business, they tend to pick up certain projects or initiatives. All the other big five [consulting firms], including McKinsey, E&Y, and PWC, have long since picked up on this trend and started to hire more sourcing consultants. They do it because their organizations don’t appear to have anyone who can do it internally. It’s almost as if there’s a new line of practice that needs to develop that has to do with mentoring and coaching; a program that helps junior to mid-range managers develop the skills they need to advance in strategic sourcing best practices so when the senior people leave they can move up from within the organization.”
We hope you enjoyed the second half of our interview with Steven Forth! Stay tuned for more exciting market intelligence from some of supply chain’s leading talent in the coming weeks. In our next edition, we’ll be chatting with another senior procurement expert in the Argentus network about trends and unique issues in this high demand area. Questions or feedback? Let us know in the comments.