This document discusses strategic sourcing and how it differs from traditional sourcing. It defines strategic sourcing as taking a long-term strategic approach to talent acquisition, rather than just focusing on short-term tactics. The document provides a 6-step process for companies to take a more strategic approach: 1) Identify critical roles, 2) Identify pivotal roles, 3) Evaluate cost of hire data, 4) Map roles on a talent segmentation matrix, 5) Apply portfolio theory, and 6) Implement strategic sourcing elements like proactive talent pipelining. Taking this strategic approach can help companies gain a competitive advantage in hiring.

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Kennedy Sourcing Summit 2008:
Strategic Sourcing: Revisited, Defined, and Game-Planned.
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Joshua Letourneau
Managing Director
LG & Assoc Search / Talent Strategy

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Today’s Discussion
If Only We Could Slow Down . . . We Could See The
Subtle Shifts In Play Around Us!
Agenda in Brief:
a. Sourcing Vs. Strategic Sourcing
b. 6-Step Process to “Change the Game”
c. Relevant Examples

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Help Me Answer An Easy Question . . .
So, What is Sourcing?
“Candidate sourcing activity typically ends once the name, job title, job function and
contact information for the potential candidate is determined by the candidate
sourcer.” (From Wikipedia 11/1/08)
Primary: Phone Secondary: Internet
http://www.youtube.com/watch?v=sW-PHukzdgM

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Ok, So What Is Strategic Sourcing?
???
Define Strategic:
“A strategy is a long term plan of action designed to achieve a
particular goal, most often "winning". Strategy is differentiated
from tactics or immediate actions with resources at hand . . .
. . . by its nature of being extensively premeditated, and often
practically rehearsed.”

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Recalling SourceCon 2007
“Model Sourcing Organization” is asked by audience
member:
Q: “How Do You Decide Where Sourcing Will Make the Most Impact?”
A: “Honestly, We Source Where There Is The Most ‘Heat from Hiring
Managers’.
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Q: “What Metrics Do You Use To Define Sourcing Success?”
A: “Growth, or # of New People, Added to the Database.”

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Now, Is That Strategic?
Like Most Americans Who Are Overfed On Carbohydrates and
Underfed on Protein . . .
We’re overfed on Tactics and Underfed on Strategy!

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Observation From “The Fringe”
I don’t know about all of you, but from where I’m standing, it sure seems
as if demand is being fueled in terms of Sourcing Efficiency (more
names in less time for less cost) . . .

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Let’s Pause For A Moment
Current Recruiting Visualizations Reflect Assembly Lines and Funnel
Systems
Insight: People Don’t Like Feeling of Being Treated As
Inanimate Objects On An Assembly Line!

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Observation From “The Fringe“ (Cont.)
Focus Seems To Be On Sourcing Efficiency Instead of Talent
Acquisition Effectivness.
Hiring More Great People In Less Time For Less Cost* . . . at
Higher Day-1 Excitement/Engagement Levels than the
Competition!

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Let’s Keep Our Eyes On The Ball!
Metrics are outstanding Health Indicators . . . And hold value as a
result.
However, the mechanistic mindset of process improvement often
promotes a focus on the Output instead of the Outcome.
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“The whole visible world is as if it were a machine in which there was nothing at
all to consider except the figures and motions of its parts.”

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Visiting the Notion of Process Improvement
Most Companies Focus On What They’re Already Doing Pretty Well!
Incremental Quality Improvements
Modest Production Efficiencies
And lose their ability to think (imagine) outside the box.

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Today: Knowledge Workers / Tacit = Complex
Interactions
Fyi:

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Today: Knowledge Workers / Tacit = Complex
Interactions
In contrast to transformations and transactions, which can be mapped and
codified . . .
Tacit interactions depend on complex mixtures of judgment,
problem-solving and information exchanges, often involving
group behavior that is difficult to replicate.
However, to get the most from workers involved in tacit interactions,
managers must abandon much of what they think they know about
strategy, organization and information technology.
- James Manyika (May 2006)
McKinsey Quarterly Writer (May 2006)

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Today: Knowledge Workers / Tacit = Complex
Interactions
:

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How Can Your Company Change The
Game???
1. Identify What Roles Within Your Organization Are Most
Critical to Creating or Preserving Competitive
Advantage.
Talent Strategy Begins with Organizational Strategy
- *** Where Does Your Strategy Require Talent That Is Better Than
Your Competitors? ***
--------------------------------------------------------------
Strategy Points To Review: (Including, but not limited to)
Key Differentiators?
Value Proposition?
Brand Essence?

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How Can Your Company Change The
Game???
Disneyland Vs. Cedar Point Park
Disneyland Cedar Point
Key Differentiator Disney Characters Roller Coasters
Value Proposition “Happiest Place on Earth” “Roller Coaster Capital of
the World”
Brand Essence Fantasy Thrills
Top Website Feature 0% Disney Vacation
Financing
Blog/Discussion Page for
Roller Coaster Fans

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How Can Your Company Change The
Game???
Identifying Critical Talent Through Your Financials
- What SBUs’ Compromise the Majority of Revenue &/Or Growth?
- What Product Lines Comprise the Majority of Revenue &/Or Growth?
- What Customer Segments Comprise the Majority of Rev &/Or Growth?
- What Is Your Per-Employee EBITDA? (“Operating Cash Flow”)
= [Revenue – (Cost of Sales + Operating Expenses)]

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SBU Revenue & Growth TreeMap (Size = Rev / Color = Growth)

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SBU EBITDA Per Employee TreeMap (Size = Rev / Color =
Growth)

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How Can Your Company Change The
Game???
2. Identify What Roles Within Your Organization Are Most
Pivotal.
- Where are Your Pivot Points, or “Areas with significant deviation
between low performers and high performers?
Hint: Start with your critical roles (or most important SBUs’) and work
backward.

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Do You Have Access to A Product Portfolio
Map?
Example: GE McKinsey Matrix
If you do, it will contain many valuable insights to help you
identify ‘Sourcing Targets of Opportunity’ (plus this will impress and gain
buy-in of Mktg & Finance Leaders, to say the least.)

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Understanding Pivotal Talent

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How Can Your Company Change The
Game???
Multi-Functional Facilities Manager (Electrical & Equipment
Maintenance)
– 2 Engineers
• Electrical Engineer & Software Engineer
– 6 Supervisors
• High-Voltage: 2
• Controls: 18
• Outside Buildings: 14
• Electrical Maintenance: 15
• Construction: 12
• Graveyard + Swing-Shift: 5 + 7

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How Can Your Company Change The
Game???
Critical Talent Segment = High-Voltage Supervisor
– “If I lose power to the facility, I have to send 7000 employees home . . . And
that would be a real bad day.”
Pivotal Talent Segment = Janitors
– “Because the President of the facility knows that squeaky clean = a higher
Wall-Street multiple when the Analysts visit.”

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How Can Your Company Change The
Game???
Key Insight – Decision Theory
Embrace the Notion that There is a Logical and Financial Justification
for Increasing Our Investment Geared at Identifying, Attracting,
Engaging, and Hiring . . .
“Critical” Talent
AND
“Pivotal” Talent

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How Can Your Company Change The
Game???
3. Dive Into Your Data and Evaluate COH Across All Roles.
- The Marketing Discipline has provided us the tools we need to
perform this type of evaluation:

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How Can Your Company Change The
Game???
Where Is The “Bleeding” Occurring? . . .

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How Can Your Company Change The
Game???
Key Insight: How Are We Trending?

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How Can Your Company Change The
Game???
4. Map Your Roles On a Talent Segmentation Matrix.
Hints:
- Graph ‘Importance to Organization’ on the X-Axis
(Scale 1-10)
- Graph ‘Difficulty to Identify/Engage/Close on Y-Axis
(Scale 1-10)
- Make Size of Bubble = Relative Size of Internal Talent Pool

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How Can Your Company Change The
Game???

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How Can Your Company Change The
Game???
Talent Segmentation Matrix Leads Us Key Questions:
Where Are Our Purple Squirrels?
Do We Have Purple Squirrels That Are Non-Critical?
Where Is Our Executive Search Spend Occurring?
(Is This Spend Justified?)
* Insight: We Can Make a STRONG Case for Increasing
Investments In the Upper Right (and Sometimes Upper Left
Quadrant).

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How Can Your Company Change The
Game???
5. Apply Portfolio Theory To Your Talent Acquisition Efforts.

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How Can Your Company Change The
Game???
Portfolio Theory Expands Our Thinking and Moves
Toward a Decision Science:
Insight: Portfolio Theory involves viewing each Talent Pool investment
in mutually exclusive fashion.
Goals:
Reduce COH Where Feasible
Reduce TTF Where Feasible
Increase QOH

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How Can Your Company Change The
Game???
6. Implement Strategic Sourcing Element.
“Special Operations” Mindset
This Element should focus on Plays of significant strategic value:
Proactive Talent Pipelining
Competitive Intelligence
Psychographics Research

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How Can Your Company Change The
Game???
Proactive Talent Pipelining Drives Competitive Advantage
- Creating Competitor Lists & Identifying Similar Roles
- Identifying HiPo Profiles & “Lateral Fits”
- Building Relationships with Competitive Talent
- Identifying/Attracting/Engaging Talent Proactively
Increases QOH and Reduces TTF . . .
While Increasing Hiring Manager Satisfaction (HM_Sat)

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How Can Your Company Change The
Game???
Proactive Talent Pipelining Visual (By Competitor)

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How Can Your Company Change The
Game???
Proactive Talent Pipelining Visual (By Location)

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How Can Your Company Change The
Game???
Proactive Talent Pipelining Visual (SNA – Recruiter/Sourcer)

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How Can Your Company Change The
Game???
Proactive Talent Pipelining Visual (SNA – Derek)

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How Can Your Company Change The
Game???
Brief Detour - Psychographics (Adjective Cloud)

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TA Innovation’s Ultimate Embodiment
Let’s Play Out a Scenario:
*The process of dividing the total market into smaller sections based on shared
characteristics.

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TA Innovation’s Ultimate Embodiment
Let’s Play Out a Scenario:

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TA Innovation’s Ultimate Embodiment
*

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TA Innovation’s Ultimate Embodiment
Red-5 Studios (IPod Strategy)
a. Hand-Picked 100 Dream Candidates (Hiring Target: 5)
b. Studied their Backgrounds/Interests through Their Social Networks and
Blogs
c. Mailed iPods in Pyschographics-Driven Packaging
d. CEO Left a Personalized Message
Result: 90 Replies / 3 Immediate Hires

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Conclusion: Take Your First Step Today!
Big Companies fear that they are too slow and not agile enough to
compete with “The Little Guys”.
- “The Wolves Coming Up the Hill Might Be Hungrier, But the Wolf On Top of
the Mountain Always Eats.”
Little Companies fear they can’t compete because they don’t have the
capital and resources of “The Big Guys.”
- Suggested that with the proper tactics, the smaller/weaker unit could gain
strength while weakening the larger/stronger unit.
*** Confucious: “A Journey of a Thousand Miles Begins With a Single Step.”
***