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- August 07, 2017
- David Hearn
- Spend Management
Strategic sourcing is at the heart of modern spend management. As more organizations automate transactional procurement activities and move in this direction, competition for talent is heating up. In previous posts, I’ve discussed strategies for addressing the talent gap, starting with maximizing the talent you have, then making sure your organizational structure and job descriptions reflect your forward-looking vision.
The next thing we need to do is widen the lens as we look for people to staff our organizations. We tend to look for people that already have experience in the field. We need to think more broadly about transferable skills, and the personal characteristics that lead to success in a modern, technology-enabled spend management organization. We need to consider people who have those skills and have not come up in the industry, and we also need to think about developing promising young people from the ground up.
Hiring for success
We started experimenting with the former in an organization I led, and had two fantastic successes hiring people that had no background in procurement at all. We decided to put greater emphasis on finding people with the skills we identified as critical success factors, and that were lacking in our organization--interpersonal skills to build relationships. Our thinking was that we could teach people the tactics of procurement and sourcing, but it would be a lot harder for us to teach them emotional intelligence and relationship building, especially since our organization wasn’t strong in that area.
So, we looked to sales, where people usually have better-developed relationship building skills. They already have some negotiating skills and probably know their way around a contract, albeit from the opposite side. We hired two sales people for sourcing roles, and taught them the function from scratch.
They came in at a mid-senior level, which meant the learning curve was steep for a while, and that was a little bit hard on them. But, our hypothesis was correct: skills such as how to do an RFP or sourcing event can be taught relatively quickly to eager learners. Just be prepared as an organization to spend time training these people and supporting them as they ramp up. Of course you need to build training into your organizational design for another reason as well--to develop folks right out of school.
There aren’t many people coming out of college prepared to start working in indirect procurement. There are only a handful of degree programs in supply chain management, and those are oriented around direct procurement. That has caused a lot of concern in the profession, which is understandable--if you’re looking for entry level people that understand buying, purchase orders, negotiation, contracts, sourcing, and supplier management, at least in theory.
But, most of the thought leadership articles in industry publications talk more about the ability to partner with the business, and a lot less about those traditional skills. That’s a tacit admission that partnership is much more important to a forward-thinking spend management organization.
For junior, entry-level positions, all we need are people that can use basic business tools and procurement systems.
We also tested this hypothesis in an organization I led. We decided to screen resumes of entry level candidates for capabilities in Word, Excel, and PowerPoint, and business background, maybe in finance or marketing, and for evidence of interpersonal skills.
We also decided that the only thing we were going to do when they came onsite to interview was to test their interpersonal skills. So how do you do that?
A tough interview
One of the best training courses that I ever took was behaviorally-based interviewing. I’m not going to get too deep into it here, because I’m not an expert and there are a lot of resources out there, but the basic concept is this: Instead of asking questions about skills, or questions people can answer theoretically, you only ask for personal stories.
For example, instead of asking "How do you deal with difficult people?" you ask, "Can you tell me about a time where you had to deal with a difficult person, in your professional or personal life, and how you were able to work together productively?"
For the purposes of strategic sourcing, you ask questions along the lines of, "How have you built relationships to accomplish a joint goal? How did you deal with folks that really did not want to work together with you?"
It's a tough interview for folks, because it's different than what they're used to. They may even start to answer theoretically, and you have to nudge them to use a real example. What I remember from the class is that people rarely lie in this type of interview, because it's very hard psychologically to lie when you're telling a story about yourself.
They’re also more authentic. It’s human nature. When you tell a story about a challenge that you had to overcome, you become introspective, both on where you faltered and where you succeeded.
We would do these interviews as a team, with three or four people asking different questions, and then we'd come back together. We would almost immediately know who had the influence and relationship skills to be successful at procurement, and would be a good fit for the company. It was obvious through their stories.
Behavioral interviewing also works for hiring senior people as well, and it’s arguably even more important because those people will have resumes packed with skills and experience. But, at least half of them will probably not have good skills in relationship building, because unfortunately our profession has only recently discovered this is critical for success. If you can master behavioral interviewing, you can bring in great people with no procurement background, even at a senior level.
Lastly, if you spot people who are great at relationship building, don’t hesitate to approach them. Twice in my career we were working with business people--one in marketing, one in IT—who had built great relationships with our group. We thought so highly of them that we asked them if they would like to do a lateral move into procurement.
These were people in the prime of their careers, and they realized cross-functional experience on their resume would make them much more attractive candidates for leadership positions, and they agreed to come over. They already knew more than a little bit about procurement from working with us, and we taught them the rest. We didn't have to screen them for skills in influence and collaboration and relationship-building, because they'd already demonstrated them.
We all agree that there are more important skills than knowing how to fill out a purchase order or an RFP. Those can be easily taught. Besides, every company operates differently so you’re going to have to do some training of new hires at every level. No one is going to walk in knowing your procurement process.
We've all been fishing in a lake that has very few good fish We can work twice as hard if we want to continue to fish exclusively in that same lake, and we still won’t catch the best fish.
Or, we can fish in a variety of lakes, looking to attract candidates that have skills in influence, relationship-building, leadership and collaboration, and many permutations of business background. At least half the workforce could fit that description.
We’ll get better quality people, and we're not going to have to invest significantly more than we normally would've had to, because we would've had to train them anyway. If we can find the right people from other areas within our companies, they can succeed. They may roll back into their previous function, or into an executive role, bringing all that procurement knowledge and help their colleagues understand the value of working closely with procurement. That’s a win for everyone.
David deployed Coupa at Juniper Networks and has been a Coupa evangelist ever since. He led indirect procurement at three companies (Sun Microsystems, Kaiser Permanente, Juniper Networks) and now helps procurement teams transform the way they add value to the business. His procurement advisory firm is called CPO Advisement Services, LCC. Contact him at: [email protected], 510-304-3380.