As usual, I take the topics for my blogs directly from my past experience as CPO or, more recently, the work we do with our clients and partner companies. This blog is no different.
Lately, it seems to me that in virtually every meeting, every executive development seminar we host, and every conference I attend, the word ‘agility’ has crept into the business lexicon and now sits in a central position in all that we discuss.
Hardly a sentence passes without someone extolling the need for agility, the benefits thereof and the mandate that they have received from a corporate demigod to be agile. I must also admit that as executive advisors, we are not immune from this lexographical frenzy and, likewise, have laid the ability to develop your function, yourself, your people and your very survival at the foot of the ‘agility’ alter.
All of the common definitions of agility run something like: “ability of a business to rapidly respond to internal or external factors, change flexibly, with minimal interruptions and without losing momentum.”
But, as usual, after hearing yet another colloquy about agility, I began to think, what exactly does this mean, and in particular what does it mean for high-performing procurement teams?
“The claustrophobia of narrow mandates and inflexible policies make ‘agility’ sound either like an unobtainable nirvana or something akin to irresponsibility”
So where does all this noise about agility come from? While I may not have a complete answer, surely uncertainty is at least one parent of agility. Supply chains spread across the globe, unpredictable economics, demand variability, war, strife, politics and even weather have all conspired to create an increasingly uncertain business climate. Uncertainty defies orderly planning and presumably, if you’re agile enough, you can surf this unpredictable landscape with little or no visible effort.
But let’s get beyond the simplistic definitions. They are fine, but the realisation of this seemingly perfect state of affairs is often unreachable in the day-to-day world that most senior procurement teams (that we know) find themselves in.
The claustrophobia of narrow mandates, inflexible policies that circumscribe everything from bidding policies to the scope and mandate of the function, overlaid with financial, ethical, sustainability and a myriad of other policies and procedures, makes agility sound like an unobtainable nirvana or something that is akin to irresponsibility.
I am equally frustrated when I try to reconcile what I see as our clients’ every day pressures and the lofty concept of being a highly agile function. So recently, I tested this. I asked the leaders of an extremely high performing procurement leadership team what exactly was agility to them, and more importantly, since they had just done a full executive stakeholder review; how did their internal clients think procurement could demonstrate agility?
Well to be truthful, there were a lot of good answers, some insightful, and others sign-posting the way for procurement to become a trusted business partner, but what stuck with me most (and sadly might be the real state of affairs), came from one senior leader who suggested that clients defined procurement agility pretty narrowly. They defined agility as “procurement getting out of the way and allowing me to conduct business with anyone whom I want to.” Painfully, it dawned on me that this is precisely how many of our internal clients see the function.
The Perception of Agility
Well, what to make of that? You can assume that that was the answer from a unenlightened client and not to be seriously considered, but since that epiphanic moment, I have tested this with several other senior procurement teams and find that more oft than not, this is closer to the real perception of procurement agility.
The follow-on question is, of course, two fold: firstly, how does Procurement actually demonstrate agility, so it is recognised by peer organisations, senior executives and is the operational reality, and secondly, how does a highly agile procurement team demonstrate this to the mass of unbelieving functions?
Blogs are, in the words of a former boss, just short enough to get you into trouble and not long enough to get you out, so I will not try to solve both questions here. I attempt to answer here only the first question. In our work with many clients, and from our own experience, we have some thoughts on how procurement demonstrates agility;
- Never stop planning. We are all used to the annual planning cycle that somehow has an end where implementation begins. This is too narrow a view. Develop an adaptive planning cycle that is constantly reconsidering where you are in your plan so you can capitalise on short-term opportunities. Remember, agility is not improvisation, it is adaptation.
- Devolve approval chains. Trust your people to do the right thing and allow more executional freedom than you are comfortable with.
- Develop a propensity-for-action. Reward people for making choices and taking actions even if it results in a poor outcome. Action is better than inaction and almost any outcome can be reversed.
- Invest in thinking time (perhaps the toughest thing to do). Invest in spending time with your leaders to deeply discuss objectives, barriers, ways to overcome them and new ways of doing things.
Will all of these combined make procurement magically agile? – probably not, but it will set forth a path toward agility that will separate your team from the usual procurement team that is prevented by (or worse) hides behind organisational inertia, obstructive rules and overlapping restrictive mandates.
Lastly, I would suggest from my own experience, to go talk with your CEO and explain to him how you perceive the agility of procurement and get his/her wisdom. Good CEOs will guide and provide useful insight – others might just tell you to get out of the way and let your business clients deal with anyone they see fit.