Let's make a deal
Logistics and supply chain professionals have joined the college crowd on social networking sites. But they're not there to share photos or swap movie recommendations; they're looking to get advice, snag a job, or seal a deal.
For many middle-aged professionals, the term "social networking" conjures up images of bored adolescents congregating on Web sites like Facebook and MySpace to make new "friends," post photos, share stories, and generally just pass the time.
But away from the so-called online hangouts lies a different world of social networking— one where serious commercial relationships are forged; where business contacts are cemented; where professionals "gather" to discuss trends, developments, and common challenges; and where logistics companies and recruiters may tap into a pipeline of talent to replenish a pool expected to be drained by baby boomer retirements.
Jerry Hempstead has discovered that world. Hempstead spent more than 32 years in the transportation business before retiring in 2006 as head of U.S. national accounts for DHL Express. Soon after establishing his own consultancy, he joined LinkedIn, a popular social networking site. Hempstead built a network of more than 300 direct or "first degree" connections, as well as more than one million "second degree" and "third degree" connections, which are contacts linked to Hempstead's own direct connections. Rather than investing hours on the phone or at trade shows, Hempstead created a global universe of contacts from his computer and did it for free (see sidebar).
Through LinkedIn, Hempstead obtained two lucrative consulting contracts—one of which came from a company outside the transportation field—and connected two former DHL Express colleagues to opportunities that he learned of through his own contact universe.
"The word-of-mouth capability of LinkedIn makes for a very impressive business networking tool," he says. LinkedIn executives were not available to comment for this story.
A new frontier
Advocates of social networking hail it as the next frontier of electronic business-to-business communication. But they don't cite as the reason the significant technological advancements that enable the networks to function. Rather, they see companies like LinkedIn, HireAbility.com, and Plaxo.com—which have all developed Web sites that cater to the business-to-business community—succeeding because they are able to apply one of the business world's oldest practices, networking, to a convenient, mobile, and Web-enabled environment.
"Many of your readers may be mystified by this phenomenon. But the process, in and of itself, is nothing new," says John McCrea, vice president of Plaxo, a Mountain View, Calif.-based company that in 2007 rolled out a social networking application called "Pulse" (see sidebar). "What's really going on here is that the Web is becoming more like the real world."
McCrea believes professionals will use networks to develop a "rich interaction with the people they know." The depth of personal and professional knowledge stemming from these dialogues will serve as a valuable lever for users looking to build brand awareness for themselves and their companies, he adds.
"In the future, I cannot imagine company Web sites not having social networking capabilities," says Craig Silverman, executive vice president, sales and marketing for HireAbility, a Londonderry, N.H.-based company that connects recruiters and companies seeking qualified employees to job seekers.
In 2006, HireAbility launched TalentTrader, which enables professionals across virtually any industry—including logistics—to come together and chat about trends, challenges, and solutions. Applications such as TalentTrader represent "the next level of where the business Web site model is headed," says Silverman. "People don't want to visit Web sites just to read content. They want to be active participants in what is going on around them."
Tracking down talent
One of the big unanswered questions about social networking sites is what—if any—impact they'll have on employment practices. No one expects social networks to assume a dominant role in the $250 billion a year domestic staffing and recruitment business—even the most sophisticated online applications can't match human intelligence. Nevertheless, the social network concept has caught the eye of some logistics recruiters, among them Jim Chadbourne, managing partner of MRI Executive Solutions, a staffing and recruitment firm in the Akron suburb of Fairlawn, Ohio.
Chadbourne believes online social networks offer great potential as a recruiting tool in a tight logistics job market, where demand for workers threatens to outstrip supply. "We are at full employment, and the talent shortage is only expected to get worse," he says. The use of social networks "will not alleviate the worker shortage but it will provide us with another channel through which we can identify qualified applicants."
He adds that social networks effectively connect recruiters and companies to the 21st century supply chain professional, candidates who often have a different attitude about work than the generation before them.
"There is a new type of individual coming into corporate America and the supply chain field," he says. "The individual ... is not wedded for life to a single company, and has an intuitive understanding of how online tools work and the value they deliver."
But other recruiters have tested the social networking waters and found the technology to be of no value. "I don't have any use for [these sites] because they are burdensome to me," says William Conroy, president of Tyler Search Consultants, a Ramsey, N.J.-based firm with a renowned supply chain management practice. "I don't want to be contacted regularly by candidates, many of whom we cannot help. We know a lot of the players already, and I prefer to reach out on my own for qualified candidates."
Making a connection
In the logistics field, the concept of social networking is still in its infancy. But there are signs that the idea is taking hold. One of the field's leading professional organizations, the Council of Supply Chain Management Professionals, recently announced it has signed on to LinkedIn, thus connecting the service to 8,500 supply chain professionals worldwide. (Disclosure: CSCMP has various commercial relationships with DC VELOCITY's parent company, Agile Media LLC.)
This past November, Jeff Ashcroft, who has spent more than 20 years as a logistics practitioner and consultant, launched the "Supply Chain Network Group" on Facebook. He followed that up recently by establishing a similar group on LinkedIn.
As of mid-April, the SCN Group on Facebook had 45 members. Among the postings was a solicitation from an executive of GE Infrastructure, a unit of General Electric Co., who was looking to fill several openings within the division, and a summary of Aberdeen Group's annual procurement summit on global supply management strategies. It was unclear from the postings when they were originally made.
Ashcroft was unavailable to comment for this story. But in his November 2007 online newsletter, he wrote that as the reach and complexity of the global supply chain demands richer levels of interaction among trading partners, "more effective and immediate tools than e-mail will be ... required to support these communications." Ashcroft said he was "amazed at how many distribution center and warehouse locations already have set up a group on Facebook to voice their collective beefs and also to interact outside of the typical work environment."
Facebook representatives declined repeated requests to comment. The company has developed a suite of business solutions to leverage its brand to companies and professionals. In an effort to monetize its huge and growing user base, Facebook has hired Sheryl Sandberg, a former top executive at Google, to become the company's number-two executive behind founder Mark Zuckerberg.
Those in the business-to-business social network space acknowledge it would be easy for Facebook to add businessrelated capabilities to its product menu. However, they contend that because Facebook has focused on building a brand around personal networking, it is coming late to a game that plays by somewhat different rules.
"We believe you can develop interesting business models based on who you know rather than simply who is your friend," says McCrea of Plaxo.
Among social networks, Facebook and MySpace get most of the ink. But their models were designed around interaction at the personal—rather than the business—level.
In the past five years, however, sites catering to business professionals have emerged to fill the gap. They're proving to be a powerful draw; some have already attracted millions of members. Three of the leading business-oriented social utilities are the following:
• LinkedIn. Based in Mountain View, Calif., LinkedIn is considered the most prominent business-to-business social networking site. Its model is built around a concentric circle of business contacts. At the time they sign up, LinkedIn members create a profile that summarizes their professional accomplishments. The profile is designed to help the member find—and be found by—colleagues, clients, and partners. A LinkedIn member can add connections at any time.
The LinkedIn network has different layers: A member's first degree, or direct connections; the connections' connections (second degree connections); and the contacts of those second degree connections (third degree connections). The net effect is to give each LinkedIn member access to potentially thousands of business contacts around the world.
The basic LinkedIn service is free. However, the service charges a fee for members wanting to access an indirect connection without first getting permission from that connection's own direct contact.
• Plaxo.com. Also based in Mountain View, Plaxo features a social networking model that's built around a powerful Web-based address book that hosts 40 million users daily. To enhance the model, Plaxo last year introduced a tool called "Pulse," which optimizes the interaction between Plaxo users and their business and personal connections. With Pulse, Plaxo users have real-time visibility into the personal and professional goings-on of people in their network, what projects they're working on, and their favorite travel locations, among other things.
For example, a Plaxo user may be aware that one of his business contacts on the site is putting a project up for bid. Through Pulse, he could find out more about that person— favorite restaurants, children's ages, and so forth—and leverage that information to develop a stronger relationship and, perhaps, bolster his chances of landing the contract.
On May 14, Plaxo announced it was being acquired by Comcast, the communications giant, for an undisclosed sum. The two companies have teamed up on various projects for more than a year. Plaxo said the transaction will not change the strategic direction of its business.
• HireAbility. Based in Londonderry, N.H., HireAbility focuses on staffing and recruitment. Among its tools is software, called ALEX, that processes millions of résumés from around the world and converts them into specialized human resource computer code that can be integrated into an individual's profile and application information. Another tool, TalentTrader, enables human resource professionals and third-party staffing and recruitment firms to exchange information and communicate with job-seekers.
HireAbility also hosts a job board at www.hireability.com. The board, which offers job posting and résumé viewing packages, automatically cross-posts jobs to hundreds of paid and free sites.
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