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New Skills Or New Function?

June 11, 2009

One of the reasons that our work at IACCM is so fascinating is that we gain perspectives from a range of different business functions. And many of the challenges we hear about are very consistent; they all involve the idea that a) we must expand our role and b) we need some new skills and areas of knowledge in order to do it.

The truth is that inter-comapny relationships are becoming more important and in many ways more fragile. Simply selecting a supplier or a customer and then hoping that performance will be good is no longer enough. Everyone involved in establishing or managing trading relationships understands that we must become better at defining the relationship and then in ensuring it delivers the right outcome. In other words, we must measure thequality of our work.

But that is hard – and it is made harder by the fragmentation of today’s organizational models. It is often unclear who does what in structurng or selecting trading agreements. It is even less clear who is then charged with ensuring it achieves its goals.

As we discuss this with senior managers from Procurement, Legal and Contract / Commercial Management, they all feel that there are gaps in today’s processes and responsibilities. Many see this as an opportunity – so long as they can assume the mission to fix the problem and if only they had the right skills and tools to do it.

A message we regularly hear is that delivering greater value depends on people who have a more creative mindset, who have good facilitation and problem-solving skills, who can work cross-functionally and deliver outstanding market insights. In addition, they must be good risk managers, great negotiators and value-focused commercial experts. So we must train people and perhaps bring in a few new faces. But is that really the answer?

I hear similar recipes for success from other professional groups. It seems that project managers and sales account managers also plan to fill these gaps. So there is plenty of competition – yet little evidence that much is happening.

The truth is that many of the individuals populating today’s business functions cannot and will not make this transition. If they had the desired skills, they would not be doing their current job. So maybe we are on the wrong track and need to think not so much of expansion, but rather of integration. And that in many ways is what lies at the heart of the IACCM concept.

Traditional business models were built on the idea of functional  groups that delivered specific expertise and were motivated by a system of creative contention. Today’s demands for greater speed, the introduction of greater complexity and the innovation caused by global networks have destroyed key aspects of that model. The result of these changes is that we often see destructive contention and competition between functions, as they struggle to deal with the demands of the new business environment.

While it may be true that businesses today require more of certain skills, that is not because such skills are completely lacking – they simply are not well deployed and in some cases, they are in short supply. The challenges that face buy-side relationship management are very similar to the challenges that face sell-side relationship management. Even if we could fix one side, it would not address the problem – because the other side would remain deficient. So we must take a more holistic view – and perhaps that means greater consolidation between skill sets and the  amalgamation into new business functions.

Just as the old jobs of the late mediaeval period vanished, to be replaced by new roles and organizational models, so we must today face the realities of the networked world, with all the differences that implies. I believe we have the chance to change the mould and consolidate the skills and knowledge of contract and c0ommercial specialists from both buy-side and sell-side into a single, new business function.

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