If the events of the past year and a half have made anything clear, it’s that the supply chains of the future will need to be agile and digital, quickly managing change through the use of effective sense-and-respond capabilities. The pandemic has certainly pushed supply chains to their limits, leading many supply chain professionals to question how effective they are at identifying and reacting to disruptive events (see Figure 1). Now more than ever, agility is a key priority.
[Figure 1] COVID-19 pushed supply chains to question their agility
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Similarly, the disruption and volatility of the past year have not stalled the supply chain’s path to digital. Most CEOs cite digital capabilities as an area for increased investment, and some organizations are even accelerating their digital business initiatives. Chief supply chain officers (CSCOs) will be expected to contribute to their company’s digital optimization or digital business transformation in a significant way.
Better preparation for future unknown events and continued organizational ambitions to become digital will require new ways of working and making decisions in the supply chain. Yet supply chain work and roles have not typically been designed with agility or technology at the center. As a result, CSCOs will need to rethink how they construct their workforce—and they have their work cut out for them. Gartner research has identified some of the key areas they will need to tackle: simplify work design, develop digital dexterity and data literacy, employ and develop “connector managers,” and develop a modern development and career path program.
Simplify work design
When executives design work, they need to consider three components: role structure, workflow design, and systems and tools. They need to ensure that the right people are in place in the supply chain organization and that work models and tools are designed to produce valuable outcomes.
Having a solid work design strategy in place is crucial because as work changes—for example, as agility becomes more important and the organization becomes more digital—the roles, workflow, and systems and tools required to support that work will also change. Indeed, job roles, workflow, and tools will only be helpful if they accurately reflect and support the actual work that needs to be done and are not overly complex.
Not all work design strategies are created equal, but the most successful approaches all focus on simplification. Work that is overly complex leads to overwhelmed teams, longer process cycle times, and roles that are difficult to recruit for due to the specificity or complexity of required skillsets.
For example, when it comes to the structure of specific roles, the popular decluttering rule “one in, one out” should be the guiding principle. In other words, for every new skill or responsibility added to a role, one should be removed. Especially when adding new digital competencies to roles, it’s important to also consider which skills can be removed from the role profile. For example, as analytics are embedded into the supply chain, leaders might want to remove Microsoft Excel expertise from the job profiles and replace the empty spot with data literacy skills.
Let’s also take a look how workflows are designed. Supply chain executives should look to eliminate all nonessential partners, rules, and policies that staff have to consider before completing a workflow. For example, we might simply remove managerial oversight on specific decisions and instead equip employees with decision frameworks that clarify how decisions should be made.
The more complicated the workflow, the more complicated the skills and competencies needed to support it. A clean, straightforward workflow also makes work more enjoyable and desirable, as employees know what they should focus on rather than being completely overwhelmed by the multitude of tasks they have to perform.
Finally, in terms of systems and tools, companies should try to reduce how much technical knowledge their staff needs to use them effectively. Tools should be chosen based on their user-friendliness and how well they support the task the employees do without requiring complex skills. For example, when evaluating a new supply chain planning system—beyond technology management criteria—they should incorporate criteria around the time and cost of acquiring talent to use the new system.
Look for digital dexterity
Digital business transformation will require employees to have what we call “digital dexterity.” The term describes the set of beliefs, mindsets, and behaviors that help employees deliver faster and more valuable outcomes from digital initiatives. Employees with high levels of digital dexterity are open to the potential of new technologies. They’re tech-savvy, willing to flex roles, take risks, and embrace collaborative ways of working.
However, digital dexterity is not just about working digitally or using digital technologies. Employees must have the ambition and ability to build digital businesses as well. Unfortunately, digital dexterity is scarce in most organizations. Gartner research found that only 9% of employees exhibit high digital dexterity.1 Even employees with information technology (IT) backgrounds aren’t necessarily digitally dexterous; only 18% of them exhibit high digital dexterity. In part, this is because we find that digital dexterity isn’t just about technical skill or ability, there are softer skills required, too.
Our research shows that there are five competencies that are the strongest drivers of an employee’s digital dexterity:
1. Business acumen: an understanding of the business’ long-term goals, context, and end consumers.
2. Adaptability: the ability to approach obstacles with persistence and a positive attitude.
3. Political savviness: the ability to practice empathy for stakeholders.
4. Fusion collaboration: the ability to thrive on diverse teams and communicate with a variety of audiences.
5. Systems thinking: an understanding of how one’s own work affects other functions or groups.
These competencies enable employees to move between business and technology domains, work on iterative projects, collaborate with a greater variety of stakeholders, and understand the interdependencies of digital business initiatives. Notice that none of these competencies mention any specific technical skill. That’s because our ability to work digitally and build digital businesses is more dependent on our understanding of how technology supports our organization and our workflows than on the technology itself. Supply chain leaders should both look for digital dexterity competencies when hiring new employees and find ways to train their existing staff in these areas.
Develop data literacy
However, this focus on soft skills doesn’t mean that we should completely disregard technical skills. Gartner predicts that by 2022, 90% of corporate strategies will explicitly mention information as a critical enterprise asset and analytics as an essential competency.2 This will apply to the supply chain as well. As a result, to be successful, supply chain organizations must have employees that possess “data literacy.”
Gartner defines data literacy as the ability to read, write, and communicate data in context, including an understanding of data sources and constructs, analytical methods and techniques applied, and the ability to describe the use-case application and resulting value.
There are four competencies that drive data literacy:
1. Business value: understanding how data adds value to supply chain decisions and the ability to cite examples of measurable outcomes powered by data and analytics.
2. Data: understanding that information is a strategic asset as well as how to manage it effectively.
3. Analytics: understanding the difference between various analytic techniques, for example, prescriptive and descriptive analytics.
4. Culture: being able to actively promote and support the development of data literacy within the organization. As leaders, we communicate the importance of data literacy to our staff.
Already today we’re competing for data and analytics talent. Given the current economic climate, we may continue to struggle to attract and retain these very technical and in-demand individuals. Supply chain leaders will need to evaluate data and analytics (D&A) capability requirements at the team level and must have clarity of D&A use cases if they wish to retain such coveted talent. Additionally, data literacy is becoming increasingly important to the average supply chain role, and organizations will have to carefully construct a skill development program that helps employees enhance their data literacy in a variety of ways.
Employ and develop connector managers
In an agile business environment, it becomes increasingly important for business organizations to make decisions quickly. One of the best ways to increase the speed of decision making is to have decisions be made by individual contributors at the point of contact with tactical issues as opposed to bumping them up the chain of command. However, in the “2018 Gartner Talent and Organization Survey,” 55% of survey respondents said that management is involved in most decision making.3 As supply chains become more complex and as remote work becomes standard, leaders need to trust their employees to make quick decisions on behalf of the organization.
This change in philosophy will require a change in how managers manage their people. Rather than being involved in every minute decision, future managers and supervisors will be responsible for acting as strategists, change managers, and enactors of employee motivation and development. What management style does the best job of accomplishing this?
At Gartner, we have identified four main management styles:
1. Teacher managers draw from their own experience to provide feedback on employees’ work.
2. Cheerleader managers focus on providing positive encouragement and take a hands-off approach to management.
3. Connector managers get to know their employees’ needs, build connections among team members, and refer employees to others in the organization when they don’t have an answer themselves.
4. “Always on” managers provide continuous coaching and feedback to try and guide their employees toward higher performance.
Our analysis shows “always on” management is the least effective of all styles, actually degrading employee performance by up to 8%. Teacher and cheerleader managers can improve performance to some extent (7% and 9%, respectively), while connector managers can improve their teams’ performance by up to 26%.4
Why? Because with connector managers, the focus is on providing the right coaching and development to employees, not just on providing more of it. They take an employee-centric approach and recognize that they don’t always have the skills and expertise needed to coach their direct reports. So, they tap into a broader coaching network to get their direct reports the support they need.
Companies can foster a connector manager style by supporting managers in tracking their employees’ changing development needs and giving managers the tools to enable peer skill sharing. They can also help managers recognize their own limitations and identify others within the organization who can help develop their direct reports.
Redesign development and career path
What is the best way for employees to learn and develop competencies such as digital dexterity, data literacy, and a connector management style? When building learning and development programs, we often use a “70-20-10 approach.” (See Figure 2.) The idea is that a learning program or an employee’s learning and development objectives should be broken into three main buckets:
[Figure 2] The 70-20-10 learning and development breakdown
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- 70% of learning should be facilitated on the job or experiential. This is often done through stretch assignments, project work, or job rotations.
- 20% of learning should be relationship-based—often facilitated through shadowing, mentoring, coaching, and social learning platforms.
- 10% of learning is the standard formal training via on-site classes, e-learning modules, or even simulations.
We are already seeing specific supply chain organizations use these approaches to develop digital dexterity and data literacy competencies. Many leading supply chain organizations are creating opportunities to take on stretch assignments that are comprised of cross-functional teams working on supply chain digitalization. Some are creating communities focused on adapting new technologies or exploring their possible usage in the supply chain.
In addition to restructuring how they help employees develop digital skills and competencies, many companies are rethinking how they structure their career paths. Traditional career paths have been promotion-focused and structured around having employees move up within functional silos. However, these linear-based career paths fail to provide employees with opportunities to gain experiences that are critical for success in digital business. It’s important for employees to have a full picture of what’s going on in the supply chain because they must understand the ramifications of their individual actions and how they relate to positive and negative outcomes in other functions. But how can even the most talented employees truly understand the full picture of the business if they have only ever been in one function or business unit?
Learning-based career models that allow for lateral, vertical, and diagonal career moves are more appropriate for digital businesses. Instead of the traditional focus on position attainment—such as from project manager through senior project manager to project lead—these new career paths focus on a set of key experiences—for example, managing a program budget or leading a cross-functional team. The focus is on what experiences employees want to have along their career journey and what experiences might help them to get to a specific role. This type of career path not only is more engaging for employees but also helps them develop their digital dexterity by exposing them to more functions of the organization. Digital dexterity is contingent on a deep understanding of the business, all its component parts, and how to interact with a variety of stakeholders within it. More dynamic career paths allow employees to build this understanding.
To successfully establish these new career paths, we must redefine career conversations and the roles of employees and managers in those conversations. Employees are and will always be responsible for identifying their career aspirations and determining desired career experiences. As part of the journey, they should seek to develop themselves—to seek out experiences that help them grow specific skills and competencies. And they should be willing to try new roles. Not everyone has to move cross-functionally, but it’s a behavior that organizations should encourage and make easy.
Managers should be responsible for connecting their employees to development opportunities and to individuals that can provide them development support. Managers are also responsible for coaching. They need to identify the strengths and weaknesses of their people and provide guidance on development. And there should be an incentive for managers to develop and promote talent along different career paths. Mobility must become a positive metric on managerial scorecards. For example, supply chain executives might incorporate into their management scorecards the metric “velocity of opportunity”—that is, the average time spent in a role or how frequently associates are promoted or rotated to new positions.
Time to take action
Most supply chain executives today want to run a more agile, digital organization. To create that type of organization, however, they first need to ask themselves whether the complexity of their organization’s processes, technologies, or roles are hindering their employees’ ability to be more agile. How can they start simplifying their employees’ work?
To be sure, digital tools and processes can help companies be more agile. For this reason, executives need to evaluate what skills and competencies their employees need in order to support the organization’s digital roadmap. Once that is complete, they must decide what types of learning experiences they need in order to build a supply chain workforce that is fit for every disruption and digital challenge that might come its way.
Notes:
1. “The Gartner 2018 Digital Dexterity Survey,” Gartner Inc. (2018).
2. This percentage is one of Gartner’s “strategic planning assumptions.” These predictions are made by Gartner analysts every year and are not necessarily founded in any dataset.
3. “Gartner’s Supply Chain Talent and Organizational Pulse Survey” Gartner Inc. (2018).
4. “2018 Gartner Manager Behavior Survey,” Gartner Inc. (2018).
