This Halloween Beware the Scary Old-World CPO

It’s Hallowe’en! Is your boss scarier than your average ghoul? Is your career in the grip of a scary, old-world CPO and doomed to wither?

Beware the Jabberwock, my son!

The jaws that bite, the claws that catch!

– Lewis Carroll, 1871

You’ll know a scary, old-world CPO when you see one.

I had almost forgotten about them until I found myself in a meeting with one last week. Somehow in recent times I have escaped the horror of hearing such old-world, closed network thinking like:

  • “I don’t want my team on social media, someone may poach them”
  • “We’re too busy working to be looking at what’s happening in the rest of the world”
  • “We know our business best”
  • “What if my team spends all day on social media?”

To the team at Procurious, these comments are like blasphemy. We’re on a mission to change the face of procurement, and give the images associated with the profession a makeover. We want to replace the old brown cardigan-clad stereotype, with fresh images of procurement as the “smartest guys in the room”.

My meeting with this archetypal nemesis reminded me of all the reasons why we founded Procurious. It gave me increased motivation to continue our mission, and gave rise to an overwhelming urge to protect all the amazing rising stars in procurement from the soul-crushing dictatorship of a scary, old-world CPO.

The Old-World CPO

Let’s face it, if your personal characteristics and actions portray an image that you’re living in the past, the chances are good you are. People don’t leave companies, they leave bosses.

As such, we want to reward the great bosses, those leading by example, keeping their teams energised, investing in individuals’ careers, and continuously pushing procurement to excel.

What are the tell-tale signs of a scary, old-world CPO? The next time you’re going for an interview, or looking at your current boss, don’t fall for the flashy suit, big title, or even the big brand name they represent.

If the person opposite you falls into one of these categories, the chances are your career development will come to a screeching halt under such a draconian regime. 

The (Digitally) Invisible Man…or Woman

Check whether this CPO has any sort of online presence. Tell-tale signs of invisibility include profiles with no photos, or inappropriate photos, scant, or no, information, and no visible mentions in a Google search.

There may have been a freak internet-cleansing event, wiping out all references to this person, but the reality is that they probably haven’t spoken at any events, written anything interesting, taken the time or effort to understand social media, or understand the fact that you will be researching them online.

Also, beware those CPOs who have fewer than 500 connections in their network. Some CPOs do make the case of quality vs quantity. But, if you’re working in a large company, have a large team, and work with an extensive supply base, shouldn’t 500 quality connections be expected?

You (and the majority of your peers) want to work for someone who is an influencer. You want a leader with a wide range of connection they can introduce you to, and broaden your horizons. Working with someone with a limited network can be a road to nowhere for your career prospects.

Robinson Crusoe – the Loner

This CPO really is an island.

They don’t believe in networking, collaborating, or outside knowledge flow, and believe information is for their own personal advantage to build their power base. The Robinson Crusoe profile can physically manifest itself as an executive sitting in a corner by themselves, with their back to the team.

This information block exists not only within their psyche, but extends to the procurement team itself. This old-world CPO has particularly old-world views, and creates a knowledge hierarchy, where they take all the great (and politically advantageous) ideas as their own.

Another problem with this approach is that it encourages working in a closed network as part of the norm. These scary old world CPOs end up staying in the same profession, peer group, company, or industry, invariably associating with people they already know. This peer group continues to reinforce their outdated approach to management, and their thinking is never challenged.

The new world CPO is collaborative, a “true influencer” and shares their knowledge freely and widely.

My view is that a CPO’s main job is to not only drive change and innovation (and make a couple of deals on the side), but to give their team the opportunity to access tools and discuss ideas with other professionals, thought leaders and experts from around the globe.

Yet I still see CPOs encouraging teams to work in isolation, unaware that there is whole universe of knowledge to help them grow and excel in their jobs.

The Devil Wears Prada – The Career Crusher

Their desk calendar reads 2016, but their attitude towards employees is stuck in the 1950s.

Yes, your boss should have an overall plan for how their team is delivering against the overall business strategy. But they should also have a plan for you – both for what you need to deliver, and how you need to develop in the future.

They should be committed to diversity and promoting young talent, to making sure their team reflects this commitment and is generating opportunities for the next generation of talent.

The best CPOs are obsessed with finding the best people and helping them develop. They send their people out to be trained in the skills they need, expose them to new opportunities, and build peer networks that will develop leadership skills.

The worst CPOs keep their category managers locked away from the rest of the world in fear that their people will be poached. A great CPO doesn’t need to worry about this. They know that they have developed a great employee value proposition that keeps their team engaged and retained.

Reverse Mentoring

Let’s not be too hard on these talented Heads of Procurement. They can’t all be cut from the same cloth.

Why not get on the front foot and try and initiate some reverse mentoring. With a few polite, and well-placed pointers, I am sure you could help turn your scary, old-world CPO into a procurement rock star.

Sharing your skills and knowledge could help your CPO become increasingly tech savvy and an advocate for technology, including social media, for procurement. And just in case you need some more points, you can find a 5-point checklist on being a great procurement boss right here.

We look forward to seeing you both on Procurious soon!

Your Top 4 Tech Tools for Influence

Want to up your influence and get some engagement for new ideas? Then you need these tools to help out-contribute the competition…

Photo by Elijah Macleod on Unsplash

Influence is always a matter of consistently making a more valuable contribution to your target market than your competitors. The challenge is that consistency takes time – how much time depends on how smart you get.

Recently I was speaking with a procurement professional who was struggling to find time to create content. His influence within his networks was growing, but he was stuck in the trap most of us get caught in – focusing on stakeholder management. My advice was to apply the 6:3 rule. Schedule and commit to six solid hours once a quarter, then three hours every week to ‘out-contribute’ your network.

To break 6:3 down into its simplest form – once a quarter you focus on creating a large piece of cornerstone value. This could be a video, podcast interviews or an emerging trends report. The most important factor is that it’s tailored and valuable to your target audience.

This then gets broken down into a number of smaller pieces of content over the next 90 days, such as articles, social posts or ‘Trend Update’ emails. The three hours each week is then spent keeping on top of industry news and trends. Pulling out key insights, saving them for the next quarters content drive and sharing them within your network via email or social media.

Sound like too much? Consider this. The latest research shows that it takes 10 ‘touch points’ to get someone to take action on a new idea or product. However unfortunately most of us give up after one or two attempts to get real engagement. The good news is it’s easy to increase your output with the right support. Here are my top four simple tech tools to keep your influence on track:

Flipboard

Flipboard runs my brain. It’s an online magazine that allows you save articles straight from your smart phone under a variety of different topics. Any time I find something interesting, I save it to my Flipboard magazine and then once a week (usually early Monday morning over coffee) I go through everything and decide what to share. I have a magazine for content, one for possible podcast guests, one for industry events, and so on.

Buffer

Buffer is a great social media scheduling tool. There are tons out there at the moment, with varying degrees of functionality. However I’ve found Buffer has the simplest interface on a mobile device – which is where I spend most of my time. It basically allows you to create and then schedule posts across nearly every social media platform. In just half an hour (again usually a Monday morning) I can schedule the core posts for the week and then just top up as the week unfolds.

Unroll.Me

This website changed my email life. It’s a free tool that takes your email address – then scours your account to find every single subscription – creating a long list from which you can unsubscribe en mass. However that’s not all. You can then add the rest to your ‘Rollup’ – which gets sent as a short summary of every single newsletter you wanted to keep – all in one email. Hours of Inbox space given back. You’re welcome.

Canva

Canva has been a complete game changer for graphic design. A super-simple design platform – it offers a huge amount of quality free presentation slides and social media templates for those that want impact without the hassle. However, if you want to take it up a level – you can also upload your own templates and change the text and images as you need them. Best of all you can do it all on your smartphone in 30 seconds from the back of a cab, which is my test for anything that claims to be time-efficient.

Staying ahead of the ideas and trends in your space – then having the time to translate them with your own insights takes work. If it didn’t, everyone would do it. But if you can get the right schedule and tools in place, “I don’t have time” should never be an excuse.

Julie Masters is a globally recognised expert in influence, authority and thought leadership. She is the CEO and Founder of Influence Nation and Founder of ODE Management – responsible for launching and managing the careers of some of the worlds most respected thought leaders. Julie is also the host of the soon to be launched weekly podcast Inside Influence. An exploration into what it takes to find and own your voice – and then use it to drive a conversation, an idea, an industry or a Nation. To subscribe check out iTunes or her website.

Three Reasons I’m Excited About Blockchain

Blockchain – is it the answer to procurement and supply chain’s prayers?  Or is it over hyped, another ‘technological innovation’ that promises much and delivers little?

blockchain
Photo by Mert Guller on Unsplash

I must admit I was leaning towards the pessimistic camp – when were those great use cases really going to happen?  I signed up for the Procurious webinar to find out more about how this new technology is impacting supply chains – and what I learned was very exciting:

Blockchain Lets You Focus on What Is Important

One of the pieces of work we all wish would disappear from the day job is the time-consuming process of supplier onboarding. 

Webinar guest IBM Sterling’s Shari Diaz told us about a blockchain-enabled onboarding process that would “give the procurement professional all that time back”. 

Describing immutable records that the supplier would update themselves and third-party validation of accreditation, Shari encouraged us to think of a world where master data management had transferred from the buyer to the supplier.

Imagine what you could do if you didn’t have to worry about more mundane tasks within your role and could instead give more focus and energy to strategic projects!

A New Way of Measuring Value

One way that Professor Olinga Ta’eed is taking forward the development of a blockchain is through the not for profit Transnational Transaction Procurement Foundation.  Since its launch earlier in 2019 the TPP foundation has grown to over 165,000 members, impressive numbers! 

Olinga set out the goals of the TPP as being practical – to “fathom out” use cases like how we can capture and report things like intangible assets using blockchain to give a broader picture of an organisation’s true value.  

Olinga thinks this new reporting will be liberating for procurement professionals allowing a more strategic focus to the role. 

How much more value could we demonstrate if we could capture and record it?

A Re-Alignment of Values for the 21st Century

Both webinar guests thought that the greatest potential for blockchain will be the ability to articulate the alignment of values.  As we move into a world where values are becoming more important, blockchain is going to provide the traceability and trackability that consumers demand. 

As Shari observed “there’s a huge trend for supply chain to be able to demonstrate their values and consumers are starting to speak with their dollar”.

Shari also stressed that blockchain can enable our eco systems to work together.  “Enterprises [typically] depend on partners for 65 per cent of the value they deliver to their customers.  The more collaborative and connected we are – the more efficient and effective we’re going to be”.

So, blockchain technology is ready to give us time back, new ways of measuring value and for our values to be realigned. 

Our webinar guests have given procurement and supply cause to remain optimistic and in fact licence to dare to dream big.

I’ll leave the last words to Professor Ta’eed,

“Blockchain will light up the path for procurement to align with mankind – making procurement and supply chain the single greatest instrument to change the world”.

A recording of the Procurious-IBM Webinar – Blockchain Supply Chain’s 21st Century Truthsayer – with panel members Shari Diaz, IBM Sterling, Professor Olinga Ta’eed and host Tania Seary, Procurious is available here

Building Bridges (Literally) – The Best of Procurement

Challenges and failures are all very well, but procurement only gets to develop if we talk about our wins. And we can all win if we learn from the best. 

By Kiwis/ Shutterstock

The Queensferry Crossing is a magnificent structure and feat of design and engineering. At 1.7 miles (2.7km) long, the bridge is the longest three-tower, cable-stayed bridge in the world. The project features innovative design and forms part of a huge, 13.7 mile (22km) upgrade in infrastructure, including intelligent transport systems and emission reducing technology.

With a project budget of between £1.7-2.3 billion at the pre-tender stage for the Forth Replacement Crossing (including the Queensferry Crossing Bridge and the surrounding infrastructure works), it’s no surprise that procurement was at the heart of the success of the project. Without great procurement and strong contract management, there is little chance that this would have been delivered in the manner it was, and provided the savings it did too. The procurement process itself delivered significant savings resulting in a reduced estimated budget of £1.45-1.6 billion.

An Audit Scotland report into the project undertaken in 2017 determined that the project had indeed delivered value for money, not surprising given that at a total spend of £1.34 billion, it provided an 8-16 per cent saving on the budget at the start of construction.

A number of strategies used by Transport Scotland for the project proved to be highly successful in the procurement exercise, such as the use of an extensive panel of KPIs, as well as allowing bidding consortia the freedom to suggest changes to designs that could potentially deliver savings and benefits.

The quality of the procurement was recognised in 2018 when Transport Scotland won the GO Infrastructure Project of the Year Award and the GO Excellence Scotland Award 2018/19 for the Forth Replacement (Queensferry) Crossing project at the 2018 GO Awards. There was further success for the project at the National GO2019 Awards in Birmingham, where it was awarded the GO Infrastructure Project of the Year.

In order to understand more about just what exactly made the procurement on this project such a success, I spoke to Lawrence Shackman, Project Manager for the Queensferry Crossing and Head of Rail Projects and Technical Services at Transport Scotland. So if you’re looking to learn from the best, now’s the time to pay attention!

What made the procurement exercise such a success to deliver the outcomes it did?

There were many good aspects to the exercise to make it a success. In particular, using the Competitive Dialogue method, which ensured we were able to engage fully with the tenderers in explaining the scope of the project, the reasoning behind the specimen design and the build process, their design and construction proposals and many other which helped to de-risk the project.

This also included supplying the tenderers with full project information, including ground investigation data and specimen designs to give examples of how the bridge, roads and associated infrastructure may be designed to satisfy the requirements.

What was the biggest challenge with the procurement and how did you overcome it?

There was a major risk that we would only be left with one bidder for the Principal Contract, as only two consortia tendered. We overcame the risk by using a Participation Agreement, signed by both tenderers, which guaranteed two things: 1 – that if Scottish Ministers did not proceed with the award of the Principal Contract, the tenderers would be reimbursed with their tender costs up to a value of £10 million; and 2 – if the contract was awarded, then the unsuccessful tenderer would be reimbursed half of their costs, up to a maximum value of £5 million.

This Agreement effectively helped to ensure that the competition remained through to submission of tenders, helping to minimise the risk of us only receiving one bid. That would have required significant additional time to verify that it represented value for money.

What lessons did you learn for future projects?

There are so many that it would be impossible to detail them all here! We intend to publish a Lessons Learned Report in the next couple of months.

If this article publishes after the publication of the report, I will link to it here.

Do you have any advice for other public sector procurement professionals working on tenders or projects to learn from your success?

Again, there are so many lessons we would share, as I have already done with other procurement professionals. Without going into too much detail, you need to ensure that you have good governance, good stakeholder engagement, technical competence, a realistic programme and cost estimating, plus robust risk management. A solid, consistent team is also essential to guide and manage the process.

Apply the Lessons

There won’t be many procurement professionals who have the opportunity to work on a project such as this, but that doesn’t mean to say that the lessons learned here are applicable across the entire profession.

Robust specifications, good stakeholder engagement, good governance and realistic programmes apply to big and small projects alike, and there is always the opportunity to look for more innovative methods to help with risk management or complex tenders.

So let’s focus on the positives, follow the path laid out for us by other professionals who have delivered successful, high-profile projects such as the Queensferry Crossing, learn from them and see what we can do in our own organisations. Remember – there is always someone to learn from who has been there, seen it, done it, so who not learn from them before we start.

How to Create a Buzz Around Contract Management

It can be hard to create a buzz around contract management. Get it wrong and it can sting badly. Get it right and the results can be honey-sweet!

Photo by Karsten Würth (@karsten.wuerth) on Unsplash

Procurement can sometimes be a real flash in the pan. The commercial squad can descend on any project that looks big enough, ugly enough or sexy enough. Money and risk can be like bees to honey – the higher it is, the sweeter the taste. It’s a sure fire way to get procurement’s attention!

Procurement professionals can be highly skilled at project planning, sourcing and providing commercial advice leading to strong contract frameworks. But when the show is over often everyone moves on to the next big shiny thing. 

While there is merit in ensuring that a solid sourcing exercise is executed, often the cream on top comes from executing exemplary contract management.

Contract Management? Yawn!

Contract management doesn’t have to be boring! If businesses get serious about contract management then serious results can be realised. There is nothing worse than a set and forget contract. It is almost guaranteed that some gold is being missed somewhere.

Contract management is quite simple at the heart of it (although admittedly it could definitely do with a re-brand).

How to Get Started

1. Ride on the buzz of signing. Capitalise on the newness of the contract by setting up the relationship meetings correctly at the beginning.

If you are a procurement person who will not be managing the contract then set up the meeting with the key relationship managers on both sides of the fence. You’ll be surprised how much value you can keep extracting, even if the contract is only freshly anointed! 

2. Take time to get the roles and responsibilities right and make sure each party understands their role.

3. Measure results and performance in a meaningful way. At the beginning of the project think about good ways to measure success. Make sure to ask your internal customers and supply market for ideas. 

4. Execute. Set the meetings, carry them out, do the surveys, do the reviews, gather the data, analyse the data, report on the data. 

How to do it right

Being organisationally ready is key. While individuals can carry out actions and get results, true value is experienced when the culture of the organisation (or the procurement team) is geared towards supplier relationship and contract management (SR&CM).

The best examples can be seen where dedicated SR&CM resources reside in a procurement team, rather than expecting individual team members to carry out these tasks within a role that encompasses many other specialisms.

Contract Management Challenges

Being aware of the challenges of embarking on a culture of change can help to set reasonable expectations of what is achievable and how long it may take. Knowing some of the sticking points from those that have gone before can be helpful in scoping out the scale and length of journey that is ahead.

The common challenges can be:

  • Resource. Obtaining sign off to get dedicated resource and gaining buy-in on the idea. Finding the right skill sets can be difficult. Sometimes new roles and directions can change the culture of the team.
  • Internal customers complaining about suppliers but either: not telling anyone; not telling the supplier; not telling procurement; and / or all of the above, plus not being willing to measure performance once mechanisms are put in place.
  • Bias – not wanting to use a supplier “just because”. To manage true poor performance (as opposed to perceived), then procurement need something tangible to build the picture and also, to give the supplier a genuine chance to improve.

What is the pay off at the end of the rainbow?

If procurement functions commit to embedding contract management into their team environment there can be many rewards.

  • Increased capability within the Procurement team – opportunity for other specialisms within procurement to learn from SRM&CM experts
  • Increased capability in the business as the contract managers and people dealing with the suppliers in the day to day increase their commercial acumen in regards to having tough conversations (or good ones!) with suppliers
  • Closing the gap between the supplier and the buyer. Understanding each side of the fence and the challenges experienced from both sides.
  • Ability to tackle poor performance in contracts effectively and efficiently as evidence is gathered, reported on and monitored. We’re not talking big brother looking to punish the supply market, there are often improvements required on both sides.

This article is solely the work of the author. Any views expressed in it are those of the author and do not necessarily represent or reflect official policy of the New Zealand government or of any government agency.

Writing a Brief for the Procurement of Goods or Services

Whether you aim to start your own business or are looking for ways to up your game in terms of paperwork, the procurement of goods and services document is something that’ll inevitably come your way.

procurement of goods
From Pixabay via Pexels

Whether you aim to start your own business or are looking for ways to up your game in terms of paperwork, the procurement of goods and services document is something that’ll inevitably come your way.

According to Convey Co, it is estimated that the global B2C sales will exceed $4.5 trillion by 2021, while at the same time B2B sales are expected to rise to $17.6 trillion. Whether you operate as a small business that handles shipping papers and orders, or as a manufacturer or delivery intermediary, documents pertaining to the procurement of goods and services can often make or break a contract.

While the document is a standard affair for companies that focus on shipping, eCommerce and other trade industries, it may prove challenging to those who are uninitiated. With that in mind, let’s take a look at how you can write a brief for the procurement of goods and services regardless of the type of good or service you intend to procure or ship to a third party.

Procurement of Goods and Services Basics

Before we go any further, it’s worth noting what the procurement of goods and services represents – the process of agreeing to the terms and acquiring goods or services from an external source. The external source in question can be an existing B2B networking partner, an open market bid you’ve made previously, or procurement via tendering.

Generally, the process of procurement involves making buying decisions for your company under certain conditions outlined in the brief and delivered to the external source in question.

Due to the nature of these documents, its good practice to rely on professional platforms such as Evernote (a cloud-based writing and editing service), Trust My Paper (an outsourcing and editing platform), Hemingway (service which is used for legibility optimisation) and WoWGrade (a dedicated writing platform) in your brief writing activities.

Typical briefs for the procurement of goods and services involve clear outlines of all factors pertaining to the sales/purchase contract, including quantity, delivery, handling, discount and price fluctuations, as well as the procurement timeline. These are technical documents that are standard in the corporate, manufacturing and shipping industries, but very important as they legally bind all parties involved to respect their agreed-upon contract.

Advantages of Writing a Procurement of Goods and Services Brief

Now that we have a clearer idea of what briefs for the procurement of goods and services are in practice, let’s take a quick glance at the benefits of their existence in your business’ documentation. Given that businesses typically work as suppliers or buyers with a multitude of other companies and brands, often internationally and at the same time, it can get daunting to manage the paperwork efficiently.

Even though procurement is only one small part of the contractual equation in this sense, it can still take up a lot of your time and even small deviations can cause you to lose trust or much-needed goods, services or revenue if you are a supplier.

In that respect, writing procurement brief outlines in advance can bring several benefits to your business going forward, including the following points:

  • Streamlined operational performance
  • Standardised documentation workflow
  • Improved accuracy and clarity of the procurement data
  • Lowered margin for the procurement error
  • Growth of positive brand reputation and industry authority

Writing Guidelines to Consider

Write a Brief Overview

The first item on your list in terms of writing a brief for the procurement of goods and services is to create an overview of your documentation. This is the segment of the brief in which you are expected to give a short outline of your business, its product portfolio and relevant website links for the receiver to follow up on.

It’s also important to provide a clear description of the procurement items you are requisitioning, as well as a brief summary of their intended purpose and its target audience. These items will allow the reader to quickly discern what the document is about without going over minute details or items in the order itself.

Define your Procurement Method

Depending on what type of goods or services you aim to procure via the written brief, you can propose the procurement methodology personally or ask for suggestions from the target business. It’s always good practice to state which procurement methods you’d like to see in the follow-up letter depending on your own business’ infrastructure and resources.

You should also take potential issues and complications into consideration based on the previous procurement experience in order to anticipate bottlenecks before they rear their head. Data in regards to past procurements or sources of information you are willing to share in regards to the particular goods or services should also be attached in this section of the brief for your reader’s convenience.

Detail your Deliverables

The deliverables section of your procurement brief is self-explanatory. However, it also has to abide by certain standards and expectations. Mainly, your deliverables should be outlined based on quantity and (in case of manufacture) the time you expect them to be completed by.

For example, if you are procuring certain types of pipes for your business, you should note any special requests you may have in regards to their length, custom build, etc. You can also add a small addendum in the deliverables section of your brief that will inform the reader that they can contact you in case of additional questions or concerns in regards to your procurement document.

Outline the Procurement Timeline

The timeline of procurement is one of the most important elements in the outlined brief as it pertains to specific deadlines in regards to your requested goods and services. While not complex or lengthy, the procurement timeline section is essential and should be clearly highlighted for emphasis.

Elements such as a procurement return deadline, procurement decision deadline as well as clarification meeting dates (if necessary) should be included. This section can be capped off with a listing of your contact information, such as email and phone, which the reader can use to let you know if the procurement request was accepted.

Request a Follow-Up on the Brief

Lastly, a formal follow-up should be included as the final element of your procurement brief for the sake of colloquial and professional courtesy. The follow-up request should be in the form of a simple call to action that will respectfully inform the reader of your anticipation of their response in regards to your document.

It’s good practice to repeat the procurement return deadline from the previous section to drive the point of urgency home. After all, it is in both parties’ interest that the procurement brief goes through so that the goods and services can exchange hands as quickly and efficiently as possible.

Creating a Clear and Streamlined Template

Once your brief for the procurement of goods or services is set in stone, you can easily retrofit it for different requests, both as a supplier or a demander. Make sure to brand your document accordingly in order to make it stand out with elements such as business logo, minute visual elements as well as a unique style of writing.

If your requests are within the realm of deliverable possibilities for the receiver, your procurement will always go through, additional clarification or not. Write your procurement brief outline through the set of guidelines we’ve discussed previously and your business documentation will be that much clearer and more streamlined for it.

The Loss Leading Approach to Savings

Challenging, controversial and, for small organisations, potentially crippling, but for many, Loss Leading remains a popular strategy. Is there a sustainable way procurement can use this strategy to deliver real savings?

Photo by Artem Beliaikin from Pexels

Loss Leading is the practice of selling products at, or just below, cost price, with the aim of bringing consumers into a store and then selling add-on items to the original product, or encourage impulse purchases. And when the average consumer spends $5,400 per year on impulse purchases, you can understand the attractiveness of this.

If you have been shopping for groceries, a new mobile phone, electronics or even a new car, the chances are fairly high that you have encountered a Loss Leader pricing strategy. So common are these deals across a whole range of goods and services that it’s probable you have encountered this strategy without even realising it.

It’s the notion that this strategy is somehow underhand that, in spite of its popularity, has led to controversy. It’s even been banned in half of US states and some European countries. Why? Because there is a widely held belief that the practice doesn’t promote competition and may harm consumers in the long-term. 

Reduced Competition?

The fact that the strategy has been banned in half of US states suggests that the practice has more negative connotations than positive. In most cases, the belief is that Loss Leading actually reduces market competition to the detriment of the consumer. 

Large organisations, the likes of Amazon, Walmart and Apple for example, have broad product ranges and the ability to withstand losses from these products by having a greater profit margin on others. Smaller organisations don’t have this luxury and either choose not to stock a product or sell it for more, reducing consumer choice.

It’s not all positive for organisations either. Savvy consumers may only look for the introductory offer or the products at the loss leading price, and not buy add-ons. This is termed as ‘cherry picking’ and may cause financial issues for even large organisations in the long-term. There may also be a knock-on effect in the supply chain as manufacturers may be required, or feel the need, to keep prices low so that loss leading strategies can continue.

There are positives for organisations and consumers though. Organisations may use it as a strategy to increase sales or engage consumers on a new product, with consumers benefiting from better deals and lower prices. 

Could we then be looking at a situation where unsustainable loss leading is the issue, where the strategy is actively used to reduce competition or drive other organisations out of business? And how does all of this relate to procurement?

Sustainable Loss Leading

For procurement, introductory pricing and negotiated discounts are commonplace. Across all industries and sectors, suppliers will try to get a foot in the door with an organisation, offering lower prices, demonstrations and even free samples. While regulations and transparency should stop this having a direct correlation to contracts awarded, there is benefit that procurement can derive from this.

Where suppliers can accommodate lower prices, a loss leading strategy on price plays right into procurement’s hands. As the profession looks to drive down costs in both direct and indirect sourcing, procurement strategies are looking for greater innovation and strategic buying initiatives to achieve this, without just chipping away at profit margins.

The Power of GPOs

Let’s say, hypothetically, that procurement professionals are looking at loss leading strategies without knowing that this is what they are. A good procurement strategy would focus on ensuring that no matter how low the price is, it is sustainable for the market and the supplier. After all, it’s no use driving prices down and putting your supplier out of business. 

What if there was a solution in the market that would enable sustainable loss leading prices over the longer term, which procurement could take advantage of? The good news is that there is in the form of Group Purchasing Organisations (GPOs). Linking up with a GPO doesn’t diminish procurement’s role, rather it enhances it. Supplier consolidation activities can be aided and it’s not a ‘race to the bottom’ in pricing, meaning that required quality levels will be maintained.

GPOs will assist in gaining the best prices possible through sourcing at bulk rates, without the individual organisations having to increase their purchasing volumes. The GPO can then guarantee that these prices stay low, at the ‘loss leader’ level for the life of the contract, through the use of pre-negotiated contracts and the fact that, due to the volume, even the smallest organisation is treated as a key customer for the supply base.

Turning the Negative Positive 

As you can see, when done sensitively and sustainably, a loss leading strategy for savings can actually be a positive for procurement. Not only that, but by taking the route of the GPO, the strategy is open for the first time to smaller organisations, without the potentially fatal risks attached to it. As procurement strategies go, it’s a strong one, allowing for wider input and not undermining strategic supplier relationships. 

Who knows, you might even earn your organisation a slice of that impulse spend. Now that would be a good outcome, wouldn’t it?

Want to know how to gain the benefits of sustainable loss leading without any of the negatives? Then contact UNA today and join their growing network.   

Are You Working for a Narcissist?

Leadership styles are under the microscope – with Trump and Boris being analysed endlessly. However, the so-called “great man” style of leadership is not always an easy one to live (or work) with.

narcissist
Photo by Fares Hamouche on Unsplash

Humans instinctively respond to confidence in a positive way. Experts who sound the most authoritative are generally listened to more and believed wholeheartedly.

As a result, it is the most self-assured in their pronouncements who tend to be held in the highest esteem – regardless of whether they are telling the truth or are being accurate or not.

The problem is that while this may help these individuals rise to the top, they might not be great for your organisation…or your career.

Narcissists are Highly Believable – So Try to Keep an Open Mind

So how do you spot a narcissist? Well, it is important to analyse what your existing/future boss is saying rather than being fooled by how they are saying it.

According to The Myers-Briggs Company (one of the world’s largest business psychology providers) experts who “sound” the most confident are also more likely to get things wrong. “Therefore, overzealous and over-confident leaders can mean potential dangers for both the political scene and the workplace,” it warns.

So if you are in a toxic workplace – or are thinking of moving jobs – avoid the over-confident leader particularly if they do not like being challenged (which they will see as a threat). They could be running the organisation into the ground.

Other tell-tale signs are a “lack of warmth” (although they might be charismatic, they may have followers rather than friends).

If you are Forced to Agree with Everything they Say, Walk Away

Narcissists have positive and inflated views of themselves and this can become a problem when they “maintain these views despite contrary evidence, and often at the expense of others”.

While you may be tempted to argue your points, present all the facts and enlist the support of others to make your case, this is not going to work with a narcissist, because they are always right.

If you are in an interview and feel your thoughts are dismissed, perhaps this is not a good boss to work for.

They will Blame You (Not Themselves) – So Avoid Them

“Leaders sometimes think there’s a problem with their team, when in fact it is the leader who is the real issue”, warns Myers-Briggs. There is evidence that individuals who are more narcissistic are not only more likely to become leaders, but they are also more likely to perform less effectively in this role than others.

So, while it might be frustrating to work for someone who always knows better, the narcissistic trait that can be most damaging is that you will find that everyone else – including you – is to blame when things go wrong. You could miss out on a promotion or worse, get fired, or be forced to leave with a bad reference, because the person you work for cannot admit to making any mistakes.

Lack of Diversity is a Red Flag – So Look Around

Additional research from The Myers-Briggs Company on narcissism and leadership has demonstrated that this kind of behaviour can lead to women being less likely to seek out leadership roles, even when they are as well or better qualified than men.

So, if the you are looking for a new job avoid the organisations that look stale/male/pale.

Will you be Heard? Group-Think is Another Killer

Narcissism is the rejection of others’ input. Along with overconfidence, this can lead to ‘group think’, where in the rush to make decisions, information that is inconvenient to the story constructed by the leader is ignored.

Myers-Briggs research also demonstrates that overconfident and dominant leaders can actively inhibit the exchange of information between members of a group, worsening the negative effects of this group think. 

So not only will your voice not be heard, you could be working for an organisation that is heading for failure.

Those Who Admit to Weaknesses Are the Strong

So what makes a good leader?

Well a boss who can admit to having a few weaknesses is going to be more self-aware. As a result, he or she will be better able to build teams that help address their shortcomings. What is needed in a successful organisation, is a good mix of different skills and personalities.

A good leader, will also create a culture and systems that inspire the people around them, so do not just look at the boss’s qualities, see who they surround themselves with and how varied and valued they are.

How to Deal with a Narcissist

The first thing is to not blindly follow them. Focus on facts that you can verify and not their opinions.

Work on building your network. The future is a “wirearchy” people whose power and influence is based on connectedness and the flow of information rather than a power base. This can help insulate and protect you.

John Hackston, Head of Thought Leadership at The Myers-Briggs Company, says it is also important to build self-awareness. “By becoming more aware of their personality and biases, individuals can make more informed decisions, helping them to overcome the pressure to follow ‘group think’ and narcissistic leaders,” he says.

At the same time, avoid challenging a narcissist (remember they are always right) or angering them by undermining them (they rely on a power base, so avoid office gossip in case it gets back to them).

Treat them in the way they would expect: listen, agree, respect them, follow their instructions etc… and accept responsibility/blame for any failings (even if they are hers/his).

Then, try to make a quiet exit. If a narcissist gets wind that you are looking for another job, they will see this as a betrayal. So play your cards close to your chest and when you resign make sure your letter is full of flattery about how much you have learned from your boss and how inspirational he/she has been.

Want to be Number One? Put Employee Wellbeing First

A happy workforce is a productive one. That’s why more and more organisations are taking account of employee wellbeing in their business travel activities.

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Recently, a term that has been trending among procurement professionals is ‘employee wellbeing’. It refers not only to the physical and mental health of your workforce but also to the idea that a happy workforce will be a more productive one and this is nowhere more evident than in the business travel industry.

When it comes to sending your team on the road, there are so many factors to consider, from speed and efficiency to cost effectiveness and reliability. Now we can add employee wellbeing to the list, and arguably it should be up there at the top. Evidence is emerging that the welfare of your team can impact performance and the growth of your entire operation.

Business travel, especially international, can offer exciting opportunities for personal career growth, as well as a chance to experience new cultures, foods, people and environments. On the flip side, frequent international travel can also be highly stressful and physically demanding with the need to adjust to changing climates and time zones. Putting work needs before personal needs is a common habit of many frequent work fliers. Yet, everyone knows that a well-rested employee is better able to give their all and achieve great results.

There are a number of steps that travel managers can take to ensure the health and happiness of the team. Here are some effective strategies for improving the wellbeing of your team and, in turn, benefitting your business.

Integrating Employee Wellbeing

If you’re new to this, here are some tips on how to integrate wellbeing strategies into your business travel policy:

1. Ensure a stress-free ride:

Reliance on multiple transfers and public transportation in an unfamiliar location can lead to lost time through the confusion, lost connections and complex directions. This means that your employee is likely to arrive flustered, delayed and not in the best shape for work.  

You need to simplify the logistics, minimize stress and cut down on wait times. Find a provider that can offer both pre-book and on-demand options at home and abroad with a reliable service that can ensure rapid arrival times.

To achieve this you’ll be looking for a provider with a large fleet size, as this will enable it to guarantee availability, so long journeys aren’t made even longer.

2. Go with a service you know

Use brands you trust and have a relationship with. This way you and your employees know you are getting a reliable, secure service, which helps to create a relaxing travel experience.

Choose a provider that prioritizes fleet security, using vetted cars both locally and internationally, so that you can be absolutely certain that your employees are travelling in safety and your ‘duty of care’ obligations are being met.

3. Keep track of your team

Tracking tools can keep you informed of where your employees are, especially when they travel abroad. This allows you to guarantee their safety and make it possible to locate and assist them in case of travel disruptions, caused by political upheaval, extreme weather, or any other kind of emergency.

4. Take your foot off the gas

Add breathing room into the schedule. Just because, hypothetically, your employee could fit all six meetings into one day, spreading the work over two days will allow your team member to arrive to each meeting well, properly recharged, rested and prepared.

In addition, build in flexibility in the schedule gives employees time to see the sights, and decompress, enjoying a new city so they can get back on the job refreshed and reinvigorated.

5. Spread the word

Set travel policies in advance and then make sure they are well advertised.  Employees are frequently unaware of their options, particularly with foreign travel.

For example, in an unfamiliar environment, employees may use an unvetted cab service, if they are not aware of partnerships with local providers. Or if they become unwell while abroad, they may be unaware of insurance coverage. This could result in them trying to hold out until they get home with regard to a medical issue that would be better dealt with immediately.

The performance and the personal wellbeing of your employees are tightly interwoven. Being at their best is what allows your team to give their best. To achieve this goal, companies need to ensure a friction-free travel experience for their employees.

To perform at their peak, they need to be able to relax between meetings and at the end of the workday. By partnering with a reliable, pre-approved service your company can meet its duty of care anywhere in the world.

Learn more on how to make your employees’ travel experience healthier, happier and more productive here.

Email Marketing – July the 4th Be With You!

Planning your next holiday email marketing campaign and struggling to stand out? Here are some top tips to help you steal the show.

Photo by Stephanie McCabe on Unsplash

Holiday email marketing campaigns can make or break a business. A study by Experian performed a couple of years ago shows that emails promoting special offers and incentives sent during the two weeks before the 4th of July resulted in dramatically increased open and transaction rates.

The best rated strategies included the following in subject lines: free shipping, vouchers and other cash incentives, 4th of July discounts and coupons, and 4th of July clearance sales.

Here is a prime example from Nasty Gal:

Email Marketing – A Strategy for Every Business

There are a number of approaches. The best one depends on the sender, the offer and the message a business wants to send across. First of all, it is important to remember that this particular holiday appeals to people’s patriotism. 

Contrary to popular belief, Americans tend to spend a lot ahead of the holiday. According to the National Retail Federation, people spend considerable amounts of money on food, clothing, party props and décor. The percentage stands at 93 per cent for young people aged 18 to 24. If your business caters to younger audiences, there is definitely room for increased transaction rates around the holiday. 

Even if that is not the case, a proper strategy will inspire customers to consider the offer. Coupled with the above-mentioned incentives, a clever marketing campaign will offer a little something to everyone. Here are some ideas on how to go about the 4th of July email marketing campaigns.

Animate the Audience

Holidays do tend to inspire partying, so adding animation to the emails is a good choice of action. A picture featuring fireworks or similar will boost the mood and make your offer more tempting. Here is an example from Nicole Miller:

Other examples may come to mind; remember to be creative and keep it cheerful.

Focus on the Holiday Mood

Holidays are fun, and the 4th of July is no exception. In fact, it may well be the most cheerful holiday nowadays. Whether spent with family or friends (or both), people focus on good times. It is, therefore, recommended to appeal to the atmosphere by creating fun emails. Rover did it brilliantly:

Be creative and humorous and look for ways to link the message to the offer.  

Stress on Patriotism

To appeal to overall patriotism, many campaigns fly the American flag. If you find it too generic, trust your brand’s specialty to add some zest to the offer. Here’s how Sperry nailed it:

Highlighting patriotic products is also a good idea. M&M did a splendid job with that with their 4th of July edition candies.

That isn’t to say that you need to create special themed products for the occasion, though. You may simply plaster the offer onto the American flag and get creative with the fireworks around it.

Things to Keep in Mind

The 4th of July is an American holiday and the biggest one next to Thanksgiving. If your business is international, do your homework with segmentation. Sending promotional offers to people outside of the U.S. would be a waste of effort and money, so focus on the target audience.

Further out, the 4th of July falls closely to Father’s Day and Memorial Day. You may easily kill two birds with one stone if you couple the offers. On top of it, sending too many emails too frequently is more likely to annoy the recipients than to inspire them, so use the opportunity to combine multiple offers into one email.

If you have a physical store, don’t forget to include business hours and the services offered around and during the holiday. It’s also important to include information on holiday shipping and delivery deadlines.

Finally, remember that the best of the best campaigns tell a unique story. It is not all about the offer. On the contrary, statistics show that people tend to remember the stories rather than the offer, especially if they are emotionally charged. Sharing an experience and showing the heroes being rewarded is what people will relate to the most. Adding a video or a promo campaign ahead of the holiday will keep customers connected to your brand and keep them coming back for a long while.

Piggyback Existing #Hashtags

To boost the outreach, don’t shy away from social media. Use the hashtags such as #4thofjuly and #fireworks to reach a larger audience and follow up with personalized email messages. Remember that younger generations are the key to your 4th of July campaign. Primarily, they use Snapchat and Instagram, with somewhat lesser percentage sticking to Facebook, Twitter and Pinterest.

Add an additional giveaway or two to attract more people. Some ideas include giveaways and social media photo competitions. The more interesting the offer, the more people will share the post. Photo competitions are known to go viral, if done the right way. Use your imagination and may, well July, the 4th be with you!