Purchasing Transformation

According to the latest ADP report; employment in the United States has fallen by more than 2 million in the past five months; including a decrease of 522 000 in January alone. Although many of these cuts are found in traditional blue collar sectors, purchasing – just like many other business support functions – have also felt the crush of downsizing.

This triggers one very important question: how does one retain talent – and competence – in a downsizing economy. The challenges are many and include both the retention of corporate knowledge as well as the social structures that support innovation and development.

More often than not downsizing often includes voluntary attrition programs, and although this is often seen as a good way of managing downsizing, it often leads to major loss of competence, since these programs often propose early retirement meaning that companies lose those most experienced who carry much of a companies institutional memory.

Downsizing can also severely damage social networks as individuals – as opposed to processes – often serve as key connectors between business units and departments. In organizations such as purchasing, which is frequently center-led and rely on local market needs/possibilities to be factored into strategies, this can be of significant importance.

A third aspect of downsizing is the increased focus on getting the job done; meaning that much slack time, that was used to improve skills and sharing experiences is lost. Struggling with day-to-day business leaves little time for mentoring or knowledge sharing among co-workers.

So how does one cope with these challenges? One can start by focusing of these two issues:

• Knowledge needs to become structured and codified in order to become accessible for all.
• Management needs to understand the critical social networks in order to retain the key individuals that act as “information super-highways” in an organization. It is also important to have support tools and structures in place that facilitate social networks.

In the near future, we will focus on other issues related to talent and competence retainment as well as leadership and communication issues that proactively address the concerns of organizational transformation and development .

This entry was posted on February 4, 2009 at 4:50 pm and is filed under Organization. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.