Great procurement is built on collaboration...
For a long time perceived as ‘hatchet men', brought in at the last minute to handle final negotiations when cost is the only variable, procurement professionals are too often deliberately kept out of the loop when value and quality issues are important to a business.
This can be the result of a lack of collaboration and the perceived inability of most procurement professionals, to demonstrate a strategic understanding of a business and its goals.
But just as HR professionals have shifted from being employee relations service providers to organisation and talent business partners, now the procurement function is moving towards a role of understanding what the business' goals are first, before establishing which of them the procurement function can support.
For example, if a business goal is top line growth by 10% year over year, how is your day-to-day job having an impact on that? Are you bringing in innovative suppliers that are helping the business to be more successful? Are you writing contracts that reward suppliers for bringing you fresh ideas? What are you doing on the supply side to give your business competitive advantage?
Understanding a business's goals is the first step to true collaboration: it enables you to demonstrate your value to their business goals. You are much more likely to achieve collaboration with your stakeholders when they believe you are aiming to help achieve their goals. You may have your own internal ‘standards' that you are driving towards but these must be secondary to the businesses goals if you want to be seen as a true business partner.
Where a business goal is about improving margins, it's quite easy to see how procurement can help – it's a clear line between reduction of costs and improvement of operating margins. However, cheap doesn't mean effective: if reducing the cost of a service has a negative impact on the effectiveness of that service to the business, you've shot yourself in the foot. The goal is to get the best service for the business as the best price possible for them – it doesn't necessarily mean cheapest.
In one example of poor collaboration, an internal stakeholder was looking to engage an events management company in order to outsource running their business events. One of their biggest concerns was quality of service.
The procurement team pushed low cost suppliers who clearly couldn't meet the quality and scope requirements of the business. When forced to ‘deal' with the suppliers who could meet the requirements, their ability to understand the nuances of the cost models and several incorrect numerical models eroded confidence in the business stakeholders, who eventually asked them to be removed from supporting the deal.
In this particular situation the procurement professionals involved completely failed to fully understand what they were buying and, more importantly, why. This highlights the importance of commercial understanding and numeric agility – considered ‘table stakes' by most business people for procurement – if you can ‘t provide that you're in the wrong job!
Instead, procurement professionals need to think of their internal stakeholders as clients. You don't own a budget, so you have to treat and service them as clients. Respect them as clients; respond to their phone calls/emails as clients in a timely manner.
If you are the expert – own the space. You have to understand the numbers better than your business partners – that is a basic essential. Equally, if you are a category specialist – be one. Know your category and demonstrate expertise – who are the suppliers, how do they work, how do they get paid, what's the cost of employment in the sector, how do they make money? What are the suppliers' challenges? Is talent an issue? Is commoditisation a concern? What value are you bringing to the table that your clients don't already have?
Relationships are built on trust
Your client needs to be able to trust that you are giving them good advice, running a strong, professional process and are knowledgeable about your area of expertise.
As anyone who has ever been in a relationship can understand, trust isn't given on day one; it has to be earned. You earn it by ensuring that every single contact is professional:
- Turn up on time
- Make sure all communications are well written; professional in their approach and always being mindful of your clients' business objectives whether it's time, money or prioritisation
- Don't presume that this project is their number one priority
- Take every opportunity to impress them – even if it's the smallest job. Most clients will give you something to ‘try you out' to see what they have got with their new procurement professional
- Do everything as if it is the most important piece of work you've ever done
- Make sure you understand your category and how your category influences the business objectives. For example, if you are looking after marketing, understand how success is measured against your marketing investment. Understand who your agencies are, build knowledge of your agencies that makes you more credible. Be able to give specific examples to back up your recommendations.
Never presume you've ‘made it' – you are only as good as your last piece of work. Basking in former glories will get the door quickly closed in your face. Make sure everyone in your team is strong and professional.
HOW TO HONE YOUR COLLABORATIVE SKILLS
- Work with the business. Suggest to your boss that you go and work within and among your client team for a few weeks. Job shadow a couple of key roles so you understand what they do and what their daily pressures are. Do it on the supplier side too. If you can understand the nuances on both sides you can play a better role in creating a successful collaborative solution.
- Ask for feedback regularly and be willing to learn. Build it into your process.
- Identify where you are not strong and work on those areas. It's great to focus on your strengths but also work on the areas that might limit your potential.
- Find a mentor who ‘gets it'. Ask them to work with you to help you develop your skills.
- Get some training, particularly if you are new to this game. Most stakeholders have experienced the ‘here's my process that we are going to follow' procurement people which is why procurement has a poor reputation in some businesses. Get some training in business partnership – HR is ahead of the game on this one so sneak in on an HR business partnership course and learn how to connect with the business before bringing out your process. Don't start with that.
- Get to know your clients as people not just ‘clients'. If you can understand them personally you will be better able to respond to them. By understanding them you will know how they like to receive information, what interests them, what worries them and what keeps them up at night. Move beyond just a service provider and become a ‘trusted partner'