Building Momentum for Organizational Development (A Case Study of the Philip Morris USA, Inc. C.P.M.

Society) Ronald E. Butler, Staff Specialist Philip Morris USA 804-274-5301; Ronald.E.Butler@pmusa.com Timothy R. Campbell, Procurement Director Philip Morris USA 804-274-2983; Timothy.R.Campbell@pmusa.com 89th Annual International Supply Chain Management Conference, April 2004 Abstract. Organizational capability is the foundation of organizational success. Without it, business strategies may not be properly developed or implemented. Creating a highly capable team requires vision, planning a nd a commitment to continuous organizational development. At Philip Morris USA, we are passionate about organizational development and we want to share our focus with you. Learn how a small group of visionary procurement analysts in our Purchasing Department created an internal, peer driven organization dedicated to enhancing our organizational capability. Our organization is called the C.P.M. Society and our mission is Dedicated to Promoting the Professional Growth and Development of PM USA Purchasing Employees. To provide you with a broad perspective regarding the Society and the impact it has had on the department, we will present the story from the perspectives of both senior management and business analyst. First, we will discuss how the senior leadership team created the culture that inspired the C.P.M. movement (from four C.P.M.s in 1999 to thirty in 2002). Then well share with you what motivated our colleagues to pursue the C.P.M. designation, create the Society and proactively take an assertive role in planning, developing and implementing our Purchasing Departments staff development plan. Examining the creation, mechanics and success of our C.P.M. Society may provide the insight you need to be the visionary change agent for your organization. When you return from the ISM Conference, we want you to have the confidence to be the catalyst that builds the momentum for organizational development within your department. It started with our culture. Inspiration a nd encouragement for continuing education should begin with the leadership team. It is incumbent upon them to create a culture that recognizes the value of continuous professional development and academic growth. At Philip Morris USA, the value of continuous education is not just endorsed, it is embedded in our culture. Our leadership team recognizes that the best procurement systems and technology in the world are ineffective without smart, driven, dynamic people. We call it our 10X Vision combining Technology, Integrated Supply Chain Management and Organizational Capability. This is not lip service, its who we are.

To guide us in achieving our 10X Vision, our senior leadership team developed our Values in Action. These values are the cornerstone of our culture and have been in place since 1999. They are: Integrity, Trust and Respect Passion to Succeed Executing with Quality Driving Creativity into Everything We Do Sharing With Others These timeless principles are the core of our Purchasing Department. They support our mission, our business strategies, and our culture. The leadership team lives by these values and pushes each of us to go as far as we can with everything we have. Working in this type of environment, is it any wonder why we are passionate about building our organization? It starts at the top. Motivation follows action. In 1999 only a few members of our staff had the C.P.M. designation. By the end of 2002 the C.P.M. Society was established and hundreds of training hours had been planned, coordinated and taught (in many instances by our C.P.M.s). Thats quite a change! How did this happen? What motivated the staff to take such a dramatic step in organizational development? It was a series of actions that culminated in the creation of the Society. In 1999, with the birth of our 10X Vision, Purchasing focused on three key areas: Integrated Supply Management Technology Organizational Capability Our Organizational Capability component was strong, but did not contain a structured curriculum for educating new members of the Purchasing profession. Additionally, it was not effectively structured to provide continuous education for our experienced staff. Given the demands and the extraordinary challenges of purchasing a vast array of direct materials, capital equipment, and supplies and services, the small group of experienced employees who had already obtained their C.P.M. designation recommended the C.P.M. courses to their colleagues. Upon review of ISMs C.P.M. and A.P.P. curriculum, the Purchasing Departments leadership team embraced the training. Senior management endorsed and sponsored a series of on-site , instructor-led training classes. The success and enthusiasm of the first class rippled out into Purchasing. Within the year, a second class was formed, which led to a third. Some employees, due to work schedules, family constraints or personal choice, chose to pursue their designation through independent study.

The entire effort has been a great success. The number of Purchasing colleagues with the C.P.M. designation has increased 500%. More colleagues are preparing to take their final exam during the first half of 2004. Keeping the momentum! In early 2002, shortly after the success of the third class, several professionals were eager to elevate the training to a higher and more specialized level. With the excitement of recently completing the C.P.M. exams still fresh in our spirits, our desire was to continue to build the momentum for organizational development. Among the C.P.M.s, there was also a unanimous desire to serve our colleagues, our company and to maximize o ur contribution in the quest to become 10X. It was at this point where the idea of creating the C.P.M. Society was born. Comprised of C.P.M.s, our mission would be to Promote the Professional Growth and Development of PM USA Purchasing Employees. To accomplish our mission, we sought to plan, coordinate, and in some instances instruct, a wide variety of academically relevant classes. The classes would be open to e veryone in Purchasing and be provided on-site at our operations headquarters. If an internal subject matter expert was not available, the Society would secure an external expert to teach the class. We also wanted our Society meetings to be open to everyo ne in Purchasing. During the meetings, we study our strategic business plan, assess our collective skill sets, discuss recent organizational changes and discuss changes in our business environment. Based on these factors, we create an organizational development plan for the department. In an effort to maximize the return on our time and effort, we coordinate our training with ISM. Applying for and obtaining ISM recognition of the training classes provides additional structure to our training schedule and adds credibility to our seminars. Not to mention saving thousands of staff-hours in travel time and tens of thousands of dollars in external training costs toward obtaining CEHs for recertification. From Concept to Creation. We took our proposal to the senior leadership team in April 2002. Their feedback validated that o ur proposal filled a critical need, offered a sound solution and provided dedicated resources eager to take on the responsibility of implementation. The senior leadership team enthusiastically and unanimously endorsed the C.P.M. Society Since our kickoff event in June 2002, we have accomplished the following: Completed eleven training classes Awarded over 200 ISM Continuing Education Hours Accumulated approximately 1,000 hours of training among all Purchasing colleagues Mentored colleagues in pursuit of their C.P.M. Assisted C.P.M. study groups Created a Purchasing library complete with ISM training software, ISM study guides and text books, a broad spectrum of academic texts, CAPS Research Studies, and a variety of relevant publications to include Inside Supply Management. Been noted in PM USAs strategic business plan, responsible for staff development

Hosted local NAPM meetings Pursued C.P.M. Instructor certification to teach our C.P.M. class of 2004

Are we fulfilling our mission? You bet! And we want to share our success with you. The Goal. We are committed to ensuring that you understand: The keys needed to create a desire for continuous education within your organization How to build momentum for professional growth and development among your staff and senior management How to foster and gain senior management support Strategies to ensure your development initiatives support your core strategies Steps to reduce the time and expense associated with professional development without sacrificing effectiveness How to leverage an internal professional development group to enhance the relationship with key internal customers By reviewing these initiatives and telling our story from two perspectives, we hope to provide you with the inspiration and confidence youll need to build momentum for organizational development within your company. We look forward to seeing you in Philadelphia.