Business Acumen – the key to being a strategic supply leader

There is a powerful business trend that is now requiring supply management professionals to move beyond tactical work into strategic leadership. As a result, organizations are demanding proficiency in a broad range of business skills from their purchasing staff at every level.

This is driven by the ever-expanding percent of corporate outside spending that is wrapped up in the supply chain - up to 70% to 80% in some cases.

From building relationships with suppliers and internal stakeholders to gathering business intelligence and making better decisions, professionals in procurement and supply chain are more involved in the critical thinking and actions that determine success for their enterprise.

Part of a powerful trend moving from tactical to more strategic roles in supply management, organizations are demanding proficiency in business acumen skills from their staff at every level.

Today's supply management professional must become proficient in all - not just some - of the business skills it takes to drive results for his or her company. From building relationships with suppliers and internal stakeholders to gathering business intelligence and making better, professionals in procurement and supply chain are more involved in the critical thinking and actions that determine success for their enterprise.

There are many ways to define business acumen in our field today. The skills that comprise it include:
1. Building Relationships
2. Business Intelligence
3. Change Management / Transformation
4. Communication
5. Decision-Making
6. Leadership
7. People Development / Coaching
8. Results Focused
9. Stakeholder Engagement
10. Strategy Development

For example, my team is regularly working with major multi-national organizations to provide targeted training in some of these areas as part of their overall learning and development roadmap. We commonly see the need for supply management teams to address the “human-factor” through Stakeholder Engagement, for example.

Identifying, engaging and managing stakeholders can be a challenge, even in some of the best-run companies on the planet.

Business acumen also addresses the synthesis of data into intelligence for better decision-making. In particular, our clients in high technology, pharmaceutical and utility industries are asking for training to develop skills in data analysis, problem-solving and action-planning. It is not enough to take instructions from an ERP system and fill a requisition and issue a purchase order. Supply management pros are expected to research and understand their spend, analyze key supplier financials and articulate insights into implementable steps.

Finally, business acumen training is mandatory for the up-and-coming generation of supply management professionals. Retaining Millennials often requires high engagement and job satisfaction. This new generation of leadership actually expects to be a strategic leader in their firms, not just tactical players. Business acumen training not only makes sense for the C-suite, but also for recruiting and retaining staff.

Jim Barnes is ISM Services Managing Director for the Institute for Supply Management. Business Acumen training at ISM is available through its Mastery Model learning program. He can be reached at [email protected].

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