All posts by Giles Breault

Why the Traditional Procurement Skill-Set Won’t Make a CPO

Perfecting a traditional procurement skill-set traditionally is a sure-fire way to stop your career progression in its tracks.

skill-set

 

A large part of my professional career has been devoted to leading global procurement organisations around the world. My business partner, Sammy, and I have collectively spent the better part of five decades doing this.

It’s true enough that we gave it all up and we are now in our own practice (The Beyond Group AG), following our own rules. However, those years instilled in us a number of ideals, which, on reflection, were less crucial than we were conditioned to believe in the earlier stage of our careers. Luckily, we have been smart enough to realise it over time!

It’s Time to Check Your Skill-Set

What am I referring to?  As we develop our procurement careers we have a notion that a certain skill-set is expected of us. Proficiency in category management, price analysis and negotiation tactics, to name a few, are most typically associated with the procurement function.

Whilst softer skills come into play as you advance into more senior roles, procurement professionals are expected to demonstrate aptitude for these sharper procurement skills from the offset.

We spend the vast majority of our professional lives honing these very same capabilities.

In my experience, these skills can only get you so far and certainly not into the CPOs chair. In today’s world, there is an important arsenal of skills demanded of CPOs.

These skills, as well as scoring above the traditional ones, will largely supplant the capabilities procurement professionals have been diligently polishing for so many years.

Organisations will simply demand of us that we are much more than we are today.

Where’s the Proof?

For the last five years, The Beyond Group has been at the forefront of dealing with the issues pressing the procurement function to change. We hold annual Think Tanks where a limited number of invited companies send their senior procurement people to deeply delve into a specific topic over the course of 4 and a half days

In 2016 we addressed the skills and capabilities needed by procurement professionals in the future.

Over the course of our three sessions we brought together practitioners, academics, professional recruiters and insightful speakers to help us pinpoint the skills that will differentiate between simple buyers and the new leaders of the function.

Assess, Analyse, Solve

Our sessions follow a specific agenda.  In the first session of the Think Tank we assess the real issues we are trying to solve. Then, in the second session we analyse options and debate outcomes.

In the third and final session we get to the bottom of the issue and try to solve it by coming to a collective understanding and collaborative solution. This year was no different.

This year the collective output of the group was that three sets of capabilities will define the CPO of the future:

1. The Business Partner (know your customer)

  • Intrapreneurial agility
  • Game Changer capability
  • Credible Experience

2. The Cross-functional integrator (manage your internal relationships)

  • Consultative skills
  • Project manager
  • Credible performance

3. The Alliance Manager (know your market)

  • Big Picture view
  • Ambassadorial skills
  • Risk and conflict manager

Most interestingly, despite the fact that we had a roomful of procurement professionals, not one of the “traditional” skill-set appeared anywhere on this list of the skills future CPOs need.

Place for ‘Hard’ Skills

This is, of course, not to say that hard skills no longer hold value in the procurement industry. It’s crucial that procurement pros master the skills associated with an interconnected supply chain: horizontal networking through social media; big data & analytics; and cognitive computing (e.g. Industry 4.0).

However, it is my belief that these will be rudimentary in the future and, as such, it won’t be necessary to call them out. They will simply be part of the assumed knowledge that everyone will have. We will continue to explore this theme in our future Think Tanks.

Sammy and I have taken to heart what a respected mentor once said to us: “You must lead with your head, heart, hands and guts”.

This has a very different, and more profound, meaning than it did some years ago in the procurement world.

Giles Breault is Principal and Co-founder at The Beyond Group AG, a specialised research & advisory firm focusing on the topic of “what’s next” in Procurement, and Business Productivity.

Productivity in Pharma – Growing Next Level Procurement Skills

What are the skills required to drive next level procurement? This is what the Productivity-in-Pharma Procurement Think Tank aims to uncover.

Next level procurement

This is the fourth year that the Beyond Group is holding its Productivity-in-Pharma Think Tank and it’s just a few days away. On April 26 in Basel, Switzerland, the first session of this year’s event will bring together more than a dozen Pharma companies to discuss the most pressing issues facing procurement in the industry.

This year’s event is titled “Growing the skills needed to drive next level Procurement capabilities”.  It builds directly upon last year’s sessions, where the topic was “How does procurement step above its traditional role of price management, and build connections with other parts of the company, to drive even greater levels of productivity”.

From that discussion, senior leaders of procurement, representing a broad cross section of the Pharmaceutical world, recognised that in order for procurement to accomplish this feat, new skills, capabilities and knowledge were required. By general demand, the group suggested that this year’s topic tackle this issue head-on.

We divide our Think Tank into three, one day sessions that are spaced four to six weeks apart. Each session has a particular purpose. On day one we attempt to clearly define the topic we are discussing, on day two we delve into the substance of the issues and discuss options for meeting the challenges discovered on day 1.

Lastly, on day three we try to bring our learnings together to develop applicable takeaways that can be directly applied by our Think Tank attendees.

Building Intrapreneurialism

So what are those skills that teams will need in order to reach next level procurement, and equip them to face a future that is more complex, more unpredictable and laden with technological changes?

As experienced advisors to the industry, we hear more and more about organisations attempting to build agile skills into their procurement teams and imbue them with a greater sense of intrapreneurialism. There is also an increasing recognition that many procurement teams are unprepared for this rapidly changing future.

In addition specific business skills are becoming more and more important in the framework of the procurement function. Even more critical is the need to understand how effective procurement teams of today will identify, recruit and challenge the next generation of professionals.

This year we will specifically focus on skills for new roles and capabilities which are critical to position Procurement as an end-to-end contributor. This include:

  • Business Partnering
  • Cross-Functional Project Leadership
  • Alliance Management

These skills, which have been identified as critical for tomorrow’s business landscape, will leverage the function’s unique position internally and externally, and turn it into a magnet for high-potential talent, seeking to accelerate their career towards business leadership positions.

In order to advance this conversation, and provide the very highest level of content that will challenge our membership, we have teamed up with a group of experts from industry, consulting, HR/recruiting, and academic institutions to provide the fullest and most use insights and immediately applicable takeaways for our member companies.

Kicking off in Basel

We are proud to welcome to this unique conclave, Ernst & Young consulting, Langley Search, Customer Value Management, Old Street Labs and as out academic partner, The Fraunhofer Institute/Technical University of Dortmund.  Our media partner for this event is Procurious who will be following the events and challenging our membership to bring their best game to the table.

Our first session kicks off on April 26 in Basel Switzerland, with 13 of the 15 membership slots already confirmed. If you are in the Pharma procurement field and are interested please drop us a note at info@thebeyondgrp.com.

Productivity in Pharma - Giles BreaultGiles Breault, co-founder of The Beyond Group AG, is an acknowledged expert in the field of Global Procurement, Productivity and Offshoring/Outsourcing. He has strategic and operational experience in the Pharmaceuticals, Electronics, and Aviation industries.

Productivity in Pharma - Sammy RashedSammy Rashed, Principal and co-founder of The Beyond Group AG, is a procurement strategist and productivity advisor with 25 years experience in senior management, primarily focused in the Pharmaceutical industry. He has become a recognised thought leader on growing procurement into a broader productivity champion.

‘Productivity in Pharma’ Procurement Think-Tank

The Beyond Group are excited to announce our fourth ‘Productivity in Pharma’ Think Tank.

Productivity in Pharma

This conclave of senior procurement leaders from the Pharmaceutical industry kicked off in 2013. The aim was to create a unique, mini-MBA style environment, where the most pressing issues facing the function are explored in detail and, from which, key insights and applicable takeaways are derived.

In our first two years we deeply probed two important topics that surfaced in our original “Beyond Procurement” study:

  1. SRM and why it has failed to live up to its strategic promise
  2. Procurement’s role in driving Sourcing Innovation.

Our aim with this article is to share some of the insights from our most recent series, which focused on deeply integrating procurement into the broader productivity arena.

How it Works

We divide the Think Tank sessions into three 1-day sessions, four to six weeks apart. Each session has a particular purpose.

  • On Day 1, we attempt to clearly define the topic we are discussing
  • On Day 2, we delve into the substance of the issues and discuss options for meeting the challenges uncovered on Day 1
  • On Day 3, we try to bring our learnings together to develop applicable takeaways that can be directly applied by attendees

2015 – Outputs and Takeaways

So what were the great insights and outputs from ‘Productivity in Pharma’ 2015? All members from the 12 global Pharma companies present felt that there was increased pressure for procurement teams to step above their traditional role of price management, and build connections with other parts of the company to drive even greater levels of productivity.  The group developed several key observations:

  • Activities aimed at generating greater productivity returns must be cross functional and not purely the remit of procurement
  • Discovering met or unmet customer needs often points towards areas of collaboration that directly create customer value
  • Procurement teams need vastly improved analytical skills and tools
  • Specific tools and knowledge required by procurement teams are LEAN/Six-Sigma, Offshoring and Outsourcing, and Demand Management
  • The strongest path of collaboration for procurement teams would be to work closely with internal teams for project management, LEAN experts, outsourcing, and business analytics

During the second session the group had a chance to further refine the insights from Day 1. They delved more deeply into how other companies were recognising procurement’s contribution to value creation in non-traditional ways.

A highlight from the session was a discussion on how procurement figured into the M&A process and what skills did it need to bring to the table to be recognised as a business advisor. Lastly our Talent Development partner for 2015, Korn Ferry, provided on-line assessment for each attendee to allow individual measurement against the ideal set of skills required for CPOs in the future.

Conclusions

In our closing Think Tank session, there was general consensus that most organisations were demanding much more from procurement teams than in the past. This included operating outside of its traditional commercial/risk management role.

However, no company had fully assembled all elements, forming neither an integrated productivity function nor a consensus on guidance for procurement organisations moving in this direction.

Four key imperatives were generated for procurement teams to consider when evaluating their enhanced role as productivity leaders.

  • Mandate: Procurement teams can lead cross-functional efforts to develop a broader collaborative mandate to drive productivity.  Productivity gains are greatly magnified (sometimes more than doubled) when process are evaluated side-by-side and not purely functionally.
  • Structure: Purely functional structures are beginning to fade.  Procurement teams should embrace agile structures and project roles that attack costs in a multifaceted way.
  • Measurement: Procurement’s yardstick of performance, savings, tells only a small part of the productivity story. New methods of measurement, including the increased value perceived by customers, need to become part of our performance lexicon.
  • Skills: New skills and new roles are required for procurement leaders of the future. Three new roles were specified by the group

The intensity of these sessions left most of our Think Tank members hungry for more.  We concluded our last session recognising that skills and capabilities were going to be a defining element for procurement teams, either being recognised as true business advisors, or as those that have yet to transform.

Next Steps

Our 2016 ‘Productivity in Pharma’ Think Tank will focus on “How to grow the skills to drive next-level procurement”, in order to face the formidable challenges of the future.

We are delighted to announce that Procurious will be joining us in order to chronicle the events, conversations and outputs over the course of the three days. This is a great opportunity for our members to get to know Procurious, but also for members of the Procurious community to gain a unique insight into this event.

Our first session kicks off on April 26 in Basel Switzerland, with 13 of the 15 membership slots already confirmed. If you are in the Pharma procurement field and are interested visit our website or drop us an e-mail.

Productivity in Pharma - Giles BreaultGiles Breault, co-founder of The Beyond Group AG, is an acknowledged expert in the field of Global Procurement, Productivity and Offshoring/Outsourcing. He has strategic and operational experience in the Pharmaceuticals, Electronics, and Aviation industries.

Productivity in Pharma - Sammy RashedSammy Rashed, Principal and co-founder of The Beyond Group AG, is a procurement strategist and productivity advisor with 25 years experience in senior management, primarily focused in the Pharmaceutical industry. He has become a recognised thought leader on growing procurement into a broader productivity champion.

Agility – Making Flexibility Look Like the Plan

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.

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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.

Defining Agility

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;

  1. 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.
  2. Devolve approval chains. Trust your people to do the right thing and allow more executional freedom than you are comfortable with.
  3. 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.
  4. 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.

Being At The Table – A CPO’s Tale Of Woe

Being at the Table – A CPO’s tale of woe

This article was originally published on LinkedIn. You can find it here.

Some days ago while having a business lunch the topic of “being at the table” arose. It was our client’s fervent hope that as a newly appointed CPO, (a move that presumably underlined the importance of procurement) he one day would sit as a peer at the EXCOM table contributing to the strategy, growth and performance of the business. Well, thinks I, what a wonderful place to consider the notion of being at the table, while being at a luncheon table myself. It got me to thinking of the roles and responsibilities of those at and around the table.

The Options

Of course there are those whose knowledge, experience, and position, earn them a right to 1) be at the table and direct the actions of others, but there are also others at work in this community. There are those who 2) serve the table and whose unique knowledge and skills answer the call for action from those seated. Then, there is 3) the chef whose specialised skills provide the provender for consideration, and lastly there is that which is 4) to be eaten (a role that I vaguely felt myself as having held a few times).

I further reflected on how many times I heard this same refrain from many CPOs whose pre-dominant career objective was to be recognised for contributing to the business at the highest level and ultimately report as a board level peer.   Moreover, I thought back on the many organisations I have come across where the “vital” role of procurement was often tucked way neatly in the CFO shop or Business Services shop where the chance of ever getting a seat at the executive table was remote at best. Given the fact that procurement is now recognised as a key stakeholder in organisational performance, what is holding it back from somehow being fully accepted into the community of senior leaders? While no answer is fully sufficient in a short blog, a couple of themes have emerged over the years in our work with organisations going through their own procurement transformation.

While business knowledge and acumen are the principle differentiators between those around the EXCOM table and those not, there is something more fundamental that is separating the procurement leader from the full approbation of their business colleagues. To put it back in the frame of my table metaphor,

you don’t belong seated if you still sound like a waiter”.

And that is the essential point.

The Prerequisites

Two major things must occur that help propel procurement organisations to the senior level of strategy. Firstly, procurement must lose the connection to purchase orders. I hear some of you shouting “Heresy!”, but what I mean is that the procurement leader has an extraordinary difficulty of representing him/herself as a strategic player when the next topic of conversation is; “What is your order placement efficiency?“ Every effort should be made not to own any portion of the operative procurement cycle.

Secondly and most importantly, is the fact that procurement organisations often make a vital error by creating a separate strategy for themselves that does not altogether align with the strategy of the business. What is more, is that the strategy is often unclear how it contributes to the business in a way that satisfies more than just the finance manager. We often find that procurement leaders speak a different language from that of other senior business leaders. While they speak of category strategies, the business is interested in how real projects bring value to their organisations. While they speak of vendor management and control the business is seeking out how external innovations can help fuel business growth.

The Solution

We advocate two distinct approaches to these dilemmas.

Firstly, develop a strategy that links to the business and directly connects benefits generated to your internal clients. We call these the pillars of successful strategic procurement and the steps are broadly as follows:

  1. Create a procurement strategy directly linked to the company’s goals
  2. Embed the annual procurement cycle into the company business cycle
  3. Drive “Lighthouse” projects directly supporting internal business clients
  4. Pull value through by having the ability to directly influence team actions
  5. Ensure that reporting is visible to your customer and ideally conducted by an organisation other than procurement

Secondly, develop an improved process of understanding the needed innovations required by your ultimate customer and significantly improve the way innovations are sought, collected, evaluated and ultimately adopted from the supplier base. We call this call the Trading Relationship Management process, and Procurement has a natural home at the heart of it.

While there is no guarantee that armed with these dual capabilities, there will be instant recognition of procurement as a future EXCOM member. However what is certain, is that Procurement will begin to demonstrate that it is not just generating business wide savings but can show where and how that value is generated and most importantly how such benefits accrue directly to internal stakeholders. Likewise other business leaders will also recognize procurement’s role as the conduit to supplier enabled innovation. Taken together, these elevate the strategic language of the function.

I explored these ideas with my lunch guest who understood and recognized how important it was for his team to strategically transform, but like so many such discussions it had to be cut short due to pressing issues at the client’s facility (I think he had to go check how many requisitions had been placed that day).