Cirtuo procurement department

This week I went for a drink with a friend and at some point, the discussion turned to work for a bit. My friend works in sales and marketing (for a very large organization) and he said whenever they need to engage with Procurement, they’re trying to find ways how to avoid working with them.

When I asked him what is it about Procurement, that makes them feel this way, here’s what he had to say:

  • Everything takes ages
  • They slow us down
  • They are very strict and rigid about the rules, policies, and processes
  • We need to wait for months to get contracts in place
  • and many more

How mature would you say the Procurement team is at my friend’s organization?

I’m now going to take a slightly different approach and look at how Procurement’s stakeholders are also making life difficult for Procurement.

Almost every company I’ve worked for, consulted, or discussed with, had some level of stakeholder misalignment and tension arising between internal stakeholders and Procurement.

How many times have your internal stakeholders:

  • negotiated with a supplier without Procurement’s knowledge,
    > agreed to unfavorable commercial conditions, as a result of lack of understanding of the consequences regarding contract obligations and liabilities, SLAs, KPIs, etc.
    > locked themselves in with a supplier during the development process, making it difficult to manage such a relationship in the long term,
    > disclosed sensitive information to your suppliers about their competitors,
    > involved Procurement only when they ran into a problem with a supplier, expecting Procurement to magically make things better
    > and many more. This is not to blame one side or the other – it’s just to realize that both parties play an important role if we want to make our organizations successful and the right governance model, stakeholder alignment and mutual respect can go a long way. My next post is going to look at ways how to approach this and hopefully offer some practical advice how to make things better.

My previous points looked at how the stakeholders perceive Procurement’s value and what it is that stakeholders are ‘guilty’ of when dealing with Procurement.

Now, I’m going to try to share some of the things that I’ve seen work or put to practice myself – the list is non-exhaustive and also not sorted in particular order:

 

1. INVEST YOUR TIME BUILDING RELATIONSHIPS ACROSS THE ORGANIZATION (both vertically and horizontally)

– Spend time familiarizing yourself with your peers, executives, and other people from the organization. Understand the objectives, goals, and bottlenecks they’re going through – become an internal ‘consultant’ for the business.

 

2. LEAD WITH PASSION & INSPIRE OTHERS

–  Sometimes, it’s the small things that make the difference. Show your team and organization that you’re passionate about what you’re doing, and come energized and highly engaged. Try to move things forward, and take small steps to build momentum and recognition.

 

3. ROLL YOUR SLEEVES UP

– Walk the talk and deliver tangible value for your stakeholders. Try to understand their pain points, help calculate business cases using Procurement data, and discuss and resolve an issue with a ‘difficult’ supplier. Whatever it is, that gets you on their ‘radar’ and helps you build trust.

 

4. BUILD A GREAT, DIVERSE TEAM

My last team consisted of subject matter experts, data scientists, great communicators, and influencers ranging from 23 to 70 years old. That variety kept it interesting, fun, and challenging at the same time. Not the approach many would take, but variety is better than having a team of yes-men/women.

 

5. PICK YOUR FIGHTS WISELY

Not every problem is equally important, and you need to be able to recognize when you’re trying to solve something that has a lot of potentials and added value and when you’re just wasting time.

The below approach from Kearney is a great guiding principle and framework for organizations to prioritize their efforts in 3 key areas:

>Team Excellence
>Category Excellence
> Supplier Excellence

I hope that the above provided you with some tips and practical advice on overcoming difficulties in dealing with stakeholders and propelling the function towards a higher level of maturity.

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