Supply Chain Frontiers issue #40
Leadership in supply chain management has become a hot topic over the last few years. Many supply chain executives visit the MIT Center for Transportation & Logistics (MIT CTL) for recruiting, executive education, and other reasons, and it is a rare meeting where the topic of leadership (or the lack thereof) does not come up. Although leadership issues are not unique to supply chain, in our experience there are some aspects of this attribute that are special to the profession.
Regardless of their industry, geography, or company size, the executives we have interacted with at MIT CTL are basically seeking answers to three key questions:
Can leadership be learned, or is it an inherited trait? Is there a leadership gene that enables certain individuals to be more effective leaders than others in all situations? Most executives I know agree that this is not the case and that leadership skills certainly can be learned.
While leadership can be learned, can it actually be taught? The argument is that a person can only acquire leadership skills through the scars of long experience. Surely, you cannot teach how to be a leader in the classroom or out of a textbook? I agree that you cannot learn leadership solely from a book, but disagree that it cannot be taught. At MIT CTL, we have found that the best way to teach leadership is also the best way to teach practically any other topic – through hands-on, interactive, and engaging exercises.
What, if anything, is special about supply chain management leadership? There is some truth to the argument that leadership in one business setting is much the same as in any other. But, this is not the whole story. I believe that the evolving definition of the supply chain function within a firm has expanded the role so far from its original requirements that the technology, processes, and, most importantly, the people in the profession are still playing catch-up.
The evolution from physical distribution to logistics to supply chain management is at the root of why we are becoming more focused on the leadership issue. It is a matter of where the profession came from and where it is heading.
Most current senior supply chain leaders grew up in organizations where the focus was functional expertise within independent operations. The technology tended to be tied closely to functional requirements and employed intricate optimization within that area. And the leadership style, by and large, was direct or command-and-control since most organizations followed a hierarchical reporting structure.
Today, the most pressing technology needs are visibility across functions, geographies, and companies. One of the most desired skills is the ability to coordinate across multiple entities. Thus, the ability to influence decisions through indirect or soft skills becomes paramount, as the traditional hierarchy is no longer there. The most critical stakeholders in your supply chain no longer report to you; nor do you report to them.
This brings us back to the four key capabilities that, I believe, make supply chain leadership different from most business functions:
- Global perspective. Supply chain managers need to understand the cultural and other characteristics of the regions in which they operate, and to maintain a corporate culture that can be embraced by the various regions.
- Soft leadership skills. Business failures are often caused by a lack of communication, the absence of buy-in from the right VPs, or the improper setting of expectations; in other words, poor “soft” leadership skills. These soft skills are needed when working in a non-hierarchical structure, which describes most supply chains these days.
- Strong technical capabilities. Although this might seem contradictory to the previous point, supply chain managers do need to retain exceptionally strong technical skills. Having the technical capability does not mean that you need to be the expert in every aspect, nor does it mean that you should actually be doing all of the analysis.
- Relational leadership. Because supply chain leaders work across multiple functions within a firm, they need to have multiple leadership styles. And, they need to know when to use each style. The leadership style used in the S&OP meeting will be very different from the one used in a meeting with, for example, key customers, a wayward supplier, or an internal project team.
In summary, I have found that supply chain management leadership is somewhat unique. Certain leadership skills that are “nice to have” in most positions are “must have” in any supply chain leadership role. Because supply chains are connected to all aspects of a firm, the supply chain leaders need to possess a larger set of leadership skills.
This article is an abridged version of a column written by Dr. Chris Caplice, Executive Director MIT CTL, published in the March/April, 2011 issue of Supply Chain Management Review (http://www.scmr.com). This is the first in a regular series of columns published under the title Talent Strategies that will be written by MIT CTL experts. For more information on the above column, contact Chris Caplice.