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Current and Future Skills Requirements of the Category Manager
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Current and Future Skills Requirements of the Category Manager

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My Final MBA Thesis presentation to understand 2010 vs

My Final MBA Thesis presentation to understand 2010 vs

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  • 1. Current & Future Skills Requirement of the Category Manager By: Kay Bayen, June 2010 EIPM MBA Project Confidential Bayen K – MBA Research 2010 1
  • 2. Objective Research Questions 1. “What would be the updated pool of skills for category managers across industry sectors?” 2. “Will there be a difference in the core skills of category managers in Europe from today’s (2010) requirements vs the future requirements in 2015?” 3. “What will be the most appropriate and up to date definition of the role of the Category Manager according to the perspective of leading academics and senior purchasing executives?” 4. “Is there a gap between the “average” vs “best in class” category managers?” 2 Bayen K – Current & future skills requirement category management
  • 3. “Good talentat the heart ofgood “People are outperforms change. “Attracting & Retaining supply management talentkeyof 1.5x. the processes by a factoramongst Skills & talent is a is issue. top 7 key people produce economies Talented strategies that should be pursuedFlexible &do operational Many people can of skill. inonlynext decade.” …they sourcing, the a few can manage adaptable SRM & strategic sourcing.” can apply themselves broadly throughout the organisation” Carter & Monczka CAPS Research Philips,Senior VP Rob Savelkoul, 2007 Dr Nicolas Reinecke, McKinsey 3 Bayen K – Current & future skills requirement category management
  • 4. Literature Review 4 Bayen K – Current & future skills requirement category management
  • 5. Lit Review Year Lit Research Authors Topic 1983 Kraljic Purchasing must become Supply Management 1993 Kolchin and Giunipero Purchasing Education & Training 1 (Senior executives) 1996 Carter and Naraimhan Future Purchasing Knowledge 1999 Giunipero Skills based Analysis of the World Class Purchaser 2000 Durand Competency Model Relationship between Purchasing Skills & Strategic 2000 Carr and Smeltzer Purchasing 2000 Giunipero and Pearcy World Class Purchasing Skills 2002 Bouwmans Purchasing Knowledge & Purchasing Performance 2004 Giunipero Future Purchasing Manager Skills Set 2004 Giunipero Purchasing Education & Training 2 (Senior executives) Axelsson, Bouwmans, Rozemeijer 2005 Developing Sourcing Capabilities & Wynstra 2005 van Weele Purchasing & Supply Chain Management 2007 Carter & Monzcka Succeeding in a Dynamic World 2007 Bassi and Mc Murrer Maximising Return on People 2008 Bironneau & Le Roy Quelles Competences pour le Responsable Logistics? A Contingency Approach of Procurement Competencies 2009 Bichon, Kamann & Merminod & Attitudes 5 Bayen K – Current & future skills requirement category management
  • 6. Lit Review Gaps identified in Lit Review 1. Few studies on Purchasing skills have been extensively researched in Europe. 2. Skills are paramount in accelerating the successful change to adapt to external challenges. Top executives are turning to the purchasing function in tough economic times. But what skills are important for the future? 3. No studies have focused on the category manager profile. This profile lacks a definition in literature. 6 Bayen K – Current & future skills requirement category management
  • 7. Methodology Methodology of Research I have adopted the approach of (Giunipero (2004), Kolchin & Giunipero (1993). My contribution : • Applied above framework to EU context • New scope: Utilised data of (EIPM) skills assessment to analyse the gap between av vs best in class. 7 Bayen K – Current & future skills requirement category management
  • 8. Profile Participants of my research Job Profile of Focus Qualitative Quantitative Interview respondents Group Survey Survey CPO Level Vice President Director 20 19 23 28 Manager Buyers HR, Academics, Consultants 8 Bayen K – Current & future skills requirement category management
  • 9. Interviews 19 interviews with Academics & Senior practitioners • Dr Arjan Van Weele Chair of Purchasing & Supply Management Eindhoven University of Technology • Dr Michael Henke Chair of Financial Supply Management, European Business School, Munich. • Dr Michael Dickmann Head of Human resources, Cranfield University • 15 In-depth Interviews with senior purchasing executives 9 Bayen K – Current & future skills requirement category management
  • 10. Focus Group Part One: Focus Group discussion 20 participants Published: CPO Agenda Jan 2010 10 Bayen K – Current & future skills requirement category management
  • 11. Focus Group Objectives of focus group 1. Validating the qualitative and quantitative research questionnaires 2. Updating the list of skills for the research purpose 3. Developing a definition of the category manager 11 Bayen K – Current & future skills requirement category management
  • 12. Focus Group Contribution: Definition of Category Manager defining a The category manager is someone who is in charge of strategy for the category, a market intelligence expert in this category and is capable of communicating this strategy for implementation in a regional or global level. In the course of his role, he or she should work upstream in a cross functional/cross organisational manner to influence important decisions while being updated on important input from internal and external sources for strategy definition. 12 Bayen K – Current & future skills requirement category management
  • 13. Focus Group Contribution: Updated Skills Pool for Quantitative Research Focus Grp participants - Removed certain skills Final Original List which are obsolete Skills List 77 Skills 69 Skills + Added new skills which are growing in importance Kolchin & Bayen K, 2010 Giunipero, 1993 + Multiple skills combined 13 Bayen K – Current & future skills requirement category management
  • 14. Focus Group Findings: Core Skills & Existing Gaps MANAGEMENT SKILLS DECISION MAKING SKILLS • Change Management • Risk Management • Entrepreneurial skills • Working Capital Management • Strategic Thinking • Financial Acumen • Make or Buy • Outsourcing PERSONAL DEVELOPMENT • Teamworking skills BUYING TECHNIQUE SKILLS • Empathy • Functional Specifications • Creativity • Total Cost of Ownership (TCO) • Stakeholder engagement • Purchasing strategy • Supplier Market Intelligence & • Category expertise • Supplier relationship management (SRM) COMMUNICATION SKILLS • Cross cultural skills • High level communication skill PERIPHERAL TECHNICAL • Selling & influencing skills • Project Management • Corporate Social Responsibility & environmental regulations 14 Bayen K – Current & future skills requirement category management
  • 15. Qualitative Survey Part Three : Qualitative Survey results 23 participants 15 Bayen K – Current & future skills requirement category management
  • 16. Qualitative Survey Qualitative Survey Structure Part 1) Present Context Challenges & main purchasing objectives KPIs Purchasing organization & structure Qualitative Survey Part 2) Future Outlook Role/mission & objectives of Purchasing in 13 questions 5 yrs time Key activities for purchasing in the next 5 yrs Part 3) Talent Management Successful Talent Development programs Evolution of the Purchasing Job profile 16 Bayen K – Current & future skills requirement category management
  • 17. Qualitative Survey Findings: Company Challenges External • Changing market players: mergers & acquisitions on both customer and supplier side • Growing competition brought about by globalisation and emerging markets • Shorter product lifecycles • Supply market fluctuations and supply risk. Internal • Changes in top management • Managing the cultural differences in a large global organisation 17 Bayen K – Current & future skills requirement category management
  • 18. Qualitative Survey Findings: Main Purchasing Objectives • 8 Purchasing objectives identified  Value Generation  Cross Functional Collaboration  Alignment of corporate purchasing initiatives with internal users  Risk Management  Getting Indirect spend under control  Optimising & developing supplier base  Sustainability & responsible sourcing  Develop Talent Organisation & process KPIs identified Purchasing Objective Key Activities Qualitative & N = 1 …. 8 Quantitative 18 Bayen K – Current & future skills requirement category management
  • 19. Qualitative Survey Findings: Purchasing’s Future? • Shift from price negotiation to Total Cost Solution approach facilitating the involvement of key suppliers in innovation and along the entire value chain. • Move away from the traditional role of the “policeman” or “controller” to ….a „value-creating‟ role. • Be perceived as an expert advisor to internal stakeholders, be more influential to become more strategically involved with the rest of the organisation. 19 Bayen K – Current & future skills requirement category management
  • 20. Quantitative Survey Part Four: Quantitative Survey 28 respondents, rated 69 skills Scale of 1 (not important) to 5: very important 20 Bayen K – Current & future skills requirement category management
  • 21. Quantitative Survey Key findings Skills are changing … Ranking in 2015 Ranking in 2010 Strategic Thinking 1 24 Teamworking 2 11 Supplier market analysis 3 19 Influencing & persuasion 4 12 Total cost of ownership 5 23 Integrity,Professionalism 6 1 Listening 7 5 Purchasing category strategy 8 6 Market Knowledge 9 8 Change Management 10 50 21 Bayen K – Current & future skills requirement category management
  • 22. Quantitative Survey Top 10 Rank: 2015 vs 2010 Skills future Mean 2015 Skills current Mean 2010 1. Strategic Thinking 4.69± 0.47 1. Integrity, Professionalism 4.27±0.67 2. Team working 4.69± 0.47 2. Negotiation 4.19±0.75 3. Supplier market analysis 4.69±0.55 3. Cost Management 3.96±0.77 4. Influencing &persuasion 4.50± 0.76 4. Category Expertise 3.92±0.93 5. TCO 4.62± 0.57 5. Listening 3.85±0.92 6. Purchasing Category 6.Integrity,Professionalism 4.58± 0.50 3.85±0.73 Strategy 7. Listening 4.58± 0.58 7. Conceptual thinking 3.84±0.80 8. Purchasing Category 4.58±0.58 8. Market Knowledge 3.81±0.80 Strategy 9. Market Knowledge 4.58±0.58 9. Problem Solving 3.80±0.85 10. Change Management 4.42±0.64 10. Analytical thinking 3.81±0.71 22 Bayen K – Current & future skills requirement category management
  • 23. Quantitative Survey Skills that increased the most in rank Skill In descending order Rank 2010 to 2015 Rank + 1. Change Management 50th to 10th rank 40 pts + 2. Networking 41st – 12th rank 29 3. Risk Management 42nd – 14th rank 28 4. Strategic Thinking 24th to 1st rank 23 5. Environmental Reg & CSR 61st – 38th rank 23 6. Cross Cultural 44th – 22nd rank 22 7. TCO 23rd – 5th rank 18 8. Supplier market analysis 19th – 3rd rank 16 9. Customer Focus 32nd – 17th rank 15 10. Financial Analysis of Supplier 48th – 35th rank 13 23 Bayen K – Current & future skills requirement category management
  • 24. Quantitative Survey Evolution of the Top 10 Skills Top 10: Yr 2010 Top 10: Yr 2015 Negotiation Common Strategic thinking Cost management Listening Team working Category expertise Cat strategy Supply Market Analysis Conceptual thinking Mkt Knowledge Total cost of ownership Problem solving Integrity Influencing, persuasion Analytical thinking Change Management 24 Bayen K – Current & future skills requirement category management
  • 25. Av vs Best in class Part Five: Average vs Best in class Data analysis of 1040 category managers from period of 2007 – 2010 Measurement 0-3 3-5 5 - 6,5 6,5 - 8 8 - 10 Scale Skill Area to Reinforce Strengths 25 Bayen K – Current & future skills requirement category management
  • 26. Av vs Best in class Average Best in class (Mean population scores) (Top 25% pop’s av score) TOP 10 (2015) PR KN ATT TOP 10 (2015) PR KN ATT 1. Strategic thinking 1. Strategic thinking 2 Ability to work in teams 2 Ability to work in teams 3 Supply Market 3 Supply Market Analysis Analysis 4 Influencing, persuasion 4 Influencing, persuasion 5 TCO 5 TCO 6 Integrity 6 Integrity 7 Listening 7 Listening 8 Purchasing category 8 Purchasing category strategy strategy 9 Market knowledge 9 Market knowledge 10 Change Management 10 Change Management 26 Bayen K – Current & future skills requirement category management
  • 27. Human Capital Management (Original HBR Bassi & McMurrer Model applied to purchasing) Examples : Sited from the Qualitative Survey HCM Leadership Employee Knowledge Workforce Learning Drivers Practices Engagement Accessibility Optimization Capacity Knowledge Involvement Well defined Open Employee Availability: & Processes, reporting Communication engagement Required job Transparency structure Support high Channel & evaluation information & & Respect performance Learning Culture resources. Efficiency of Regular Teamwork training Salary: Individual, Feedback & Work Clarity encouraged & programs : Non Team, Group Supervisory enabled Budget holders, X-Functional HCM Knowledge Indicators Job Design Formal career Top Mgt Management Skills based (Profiles & Roles) development Commitment facilitate Recruitment taps skills plans collaboration Individual sense Leadership Mentor & of Achievement, Transition Job Orientation Coaching Recognition & System Opportunities Appreciation Aligned & effective Competency Job Security & KPIs : Quantitative & development Work Life Balance Qualitative plans 27 Bayen K – Current & future skills requirement category management
  • 28. Conclusion Conclusion & Discussion 1. “What would be the updated pool of skills for category managers across industry sectors?” …. 69 skills Focus Group findings 2. “Will there be a difference in the core skills of category managers in Europe from today’s (2010) requirements vs the future requirements in 2015?” ….Yes, Quantitative Survey findings 3. “What will be the most appropriate and up to date definition of the role of the Category Manager according to the perspective of leading academics and senior purchasing executives?” …Focus Group findings 4. “Is there a gap between the “average” vs “best in class” category managers?” Yes …. 28 Bayen K – Current & future skills requirement category management
  • 29. Highlight: Interview JF Baril,Senior VP Purchasing, Nokia HEART BRAIN Individual HANDS GUTS 29 Bayen K – Current & future skills requirement category management
  • 30. Limitations Limitations & ideas for further research • Long-term impact (€€) ROI of company’s Human Capital development with revenue, brand, innovation …not studied. • Skills of category manager with relation to 1) direct vs indirect segments, 2) specific purchasing maturity or 3) Kraljic category segment not studied. FUNCTIONAL FOCUS CROSS FUNCTIONAL FOCUS High Leverage Strategic FUTURE Value TODA Creation Y Non Bottlenec Low critical k Transactional Commercial Purchasing Internal External Value chain Focus orientation orientation coordination integration integration integration Low High Direct Indirect 30 Bayen K – Current & future skills requirement category management
  • 31. Thank You  Special thanks to all the participants of my research. 31 Bayen K – Current & future skills requirement category management