Nothing is more embedded in how a business behaves than procurement. But are we, as professionals, taking our social conscience with us to work?
A senior procurement figure at a major Fortune 500 company told me a story a few weeks ago of a conversation he’d had with a former boss.
At the time, they were pushing through some changes to the procurement process. The procurement head had voiced concerns at how staff would react. His boss responded by saying “if you want to be popular in procurement, get a dog.”
A number of other procurement professionals I’ve spoken to over the years have similar sentiments about their role, or at least how it is perceived.
Procurement is seen as being a service provided to the rest of the business. It is concerned with reducing cost, minimising risk, and is seen as having little bearing on the wider strategic direction of the business, or the relationship of the business to society.
A Social Purpose
This perception (if it was ever true in the first place!) is being fundamentally challenged. My organisation, Social Enterprise UK (SEUK) has just launched the Buy Social Corporate Challenge. Businesses involved in driving this initiative include Johnson & Johnson, PwC, Santander and Zurich Insurance.
The aim is to spend £1 billion with social enterprises, businesses which explicitly trade for a social purpose. These businesses are delivering a whole range of services with profits benefitting society, such as software testing businesses employing people with autism, office supplies companies with profits going to fund micro-finance, and logistics businesses working with the long term unemployed.
So, why are these businesses driving this? My view is this would be in response to three things: strategic drivers (at a macro level), business drivers, and personal drivers for procurement professionals themselves.
Strategic drivers largely revolve around the changing nature of how business views its relationship with society. Post-financial crisis, businesses and business leaders have focused on moving from traditional CSR (typified by being divorced from core business activities, reactive and largely non-strategic) to sustainable business or “CSR 2.0”.
This places sustainability is at the heart of the way in which the business operates. Nothing is more core to the business than its supply chain. Hence why procurement is an excellent position to look at this.
Business drivers very much follow on from the strategic. Changing consumer behaviour and a new era of transparency means that credibility, trust and reputation are key. Businesses cannot afford to deliver work that is skin deep or doesn’t hold up to scrutiny.
In England, government has also looked to address this. The Social Value Act (which my organisation was very involved in driving through) is a piece of legislation which requires public procurement to consider community value alongside quality and price when scoring bids.
As well as driving change in the £120 billion government spend each year, it is having an impact on private companies looking to win business in these markets.
Again, supply chains are an excellent place for companies to demonstrate their commitment to deliver value to communities.
Personal drivers relate directly to procurement professionals themselves seeing the opportunity for procurement to take centre stage in helping their companies to respond to the above drivers.
As well as the job satisfaction that comes with it for them personally, rather than being seen as a service to the business, this work places procurement professionals at the heart of corporate strategy, delivering work that no other part of the business could do.
Delivering on the Promise
So, how can you as an individual deliver on this? Our top tips would be:
- Make the ask of your supply chain. How can they support your company’s social objectives, like working with young people, or challenging stigma around mental health?
- Partner. No-one is expecting you to be an expert on this. Work with organisations, like SEUK, who have shared goals and objectives, and get them to support you
- Engage internally. As well as external partners, make sure your business is bought in. Work with CSR teams, senior leadership and internal communications. You’ll soon find that the work will attract a lot of positive interest.
Clearly much of my work is focused on social enterprises, which don’t exist in great quantities everywhere in the world (although the movement is growing rapidly in many markets).
Regardless, I believe the above principles still stand in all markets. This can be seen in the U.S., for example, in the supplier diversity initiatives that have happened there.
As well as creating benefits for your organisations, there is also tremendous personal satisfaction in how your work can change people’s lives, as well as deliver value for your organisation.
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