Eager to lead your procurement team through a digital transformation? We’ve got some advice from someone who knows the score… Grab a coffee and let illycaffè’s Procurement director talk you through the process…
We assume that everyone is at it behind closed doors.
But how are they doing it? What’s the process? Are they doing a better job than us? Or is everyone simply floundering in the dark? Sometimes, you need the inside scoop from someone who knows the score!
Last month, at Jaggaer’s REVInternational 2018 event in Munich, Diego Pedroli, Procurement and Logistics Director – illycaffè gave us an overview of the organisation’s ongoing digital transformation and how he made it happen.
“What I’ve learnt over these two days” he began, “is that we are actually at the beginning of our [digital transformation] journey, and it’s one that will never end. But at least we’ve started.”
illycaffè: A Brief History
illycaffè remains a family owned company with 1000+ employees, 100,000+ clients and B2B business in 140 countries.
Founded in Trieste, Italy, illycaffè prides itself on a century of innovation from launching the first high pressure espresso machine in 1935 to introducing the first single portion coffee pod in 1974.
Diego’s mission, as he sees it, is to uphold procurement excellence: continually advancing the procurement processes and supplier cycle management and managing the execution of the multi-year procurement programs.
The organisation’s digital transformation began back in December 2013 and has been evolving ever since.
Digital Transformation: The Beginning
Diego’s ultimate aim with leading illycaffè through this transformation was to streamline their processes organisation-wide, thus transitioning the procurement team from saving-hunters to value-hunters. “We wanted to try to digitalise the processes to add value and bring time for employees to actually look after the business.”
“At first it was all about developing and defining guidelines and procedures, changing the mindset of our people and the people working closely to us. We wanted to give procurement the responsibility to do procurement, not shopping!”
Between 2016 and 2017 Diego worked with illycaffè’s CEO and the board to approve the introduction of an SRM platform. After going through the bidding process and selecting Jaggaer they immediately kick-started the implementation.
Digital Transformation: The End Game
The hardest part of embarking on a digital transformation is often convincing key stakeholders, namely the CEO or CFO, of its necessity and potential value-add. Having a strong case to present and key objectives is crucial. As Diego explained, “we were able to convince our CEO to implement the SRM system because of these factors:”
Governance and Compliance
Allows for traceability of processes
Gives procurement professionals complete management of all suppliers, which greatly limits risk
Makes it easier to monitor suppliers and improve performance
Implementation of a culture of shared method
Standardisation of procedures makes the business more streamlined
Increases the speed of response to internal and external stakeholders
Allows for continuous improvement, partly through sharing best practices
Gives procurement greater accessibility and makes information easier to interpret
Having data in one place makes it simpler for everyone in the business to work and guarantees ethical practices and ethical processes
4. Economic Return
There are obvious economic benefits due to the workflow automation
Allows for a reduction of TCO in different purchasing categories
Diego’s parting words of advice? When it comes to digital transformation, “it is not enough to have the sponsorship of your CEO. And it is not enough to have a good tech partner. It’s important to have each and every person in your team on board.”
Australia’s new modern slavery bill is a welcome development in the fight to end slavery worldwide. But is the proposed legislation up to standard?
In April 2016 the UK passed new legislation, the first of its kind, making it compulsory for all businesses with a turnover of over £36 million to prove they have taken steps to remove slave and child labour from their supply chains.
Legislation like this, which also exists in France the Netherlands and the US, forces big organisations to fully audit their supply chains and has consequently put pressure on smaller businesses to eradicate the practice too.
This week, Australia announced it would be following suit, proposing a Modern Slavery Bill, which uses the UK’s act as a model.
The bill, introduced by Assistant Minister for Home Affairs Alex Hawke, “seeks to stamp out the sale of any product in Australia that involves non-voluntary labor” and will require Australia’s organisations with an annual consolidated revenue of more than $100m (around 3000 businesses) to publish annual statements on the efforts they are making to tackle modern slavery in their supply chains. These statements will have to be signed off at board level and published within six months of the publication of their annual reports.”
The Department of Home Affairs will also start publishing an annual statement on possible modern slavery risks in commonwealth procurement.
The proposed bill follows the Federal Government’s announcement in May that $3.6 million would be provided to the Department of Home Affairs for a new Anti-Slavery Business Engagement Unit to manage Modern Slavery Reporting Requirements by large businesses.
Part of this task will be overseeing a publicly accessible central repository of businesses’ Modern Slavery Statements, as well as providing support and advice to businesses on modern slavery risks.
Is the proposed modern slavery bill up to scratch?
Australia’s proposed Modern Slavery Bill has sparked some controversy amongst charities and human rights campaigners for a number of reasons.
The bill proposes that only businesses with a revenue of over $100m must audit their supply chains. The Law Council has argued that the revenue threshold should be much lower – no higher than $60m to demand compliance from more organisations
The bill doesn’t demand that there will be a public list of who must report. Without this information, if companies fail to act, this fact will remain hidden
The bill does not propose any penalties for organisations that fail to report their findings or report incorrect or misleading information on the steps they have taken to combat modern slavery. Clare O’Neil, the shadow minister for justice said “we shouldn’t be leaving it to business to police themselves on slavery”
The government have not established an anti-slavery commissioner to enforce the legislation nor vowed to provide access to a national redress scheme for victims of modern slavery
Procurement and supply chain professionals are uniquely positioned to identify and tackle modern slavery in their supply chains. But you need to know the signs…
Firstly, it’s important to understand and look for the red flags, which might be extremely subtle. The likelihood of modern slavery is increased in conflict zones and unregulated sectors, particularly if the jobs are low-income and do not require education or specific skills. Migrant workers, women and children are among the most vulnerable.
Circumstances when passports or identification documents have been removed, excessive recruitment fees are subjected upon migrant workers or subcontractors further outsource work without prior consent are all indicators of exploitation.
Encountering one of these situations may not in and of itself amount to modern slavery but your organisation mustn’t assess anything in isolation. It’s important to look for the series of signals in order to decipher whether they paint a clear picture of modern slavery.
“Procurement teams are on the frontline,” Fiona David, former Executive Director Global Research – Walk Free Foundation asserts. “They manage supplier relationships, they understand the business, the risks and the regions in which they operate. The indicators of modern slavery, being a grievous crime, is actually quite easy to identify, when you know what you are looking for.”
But advocacy groups and investigative reporters mustn’t be the sole figures doing the digging to reveal incidents of modern slavery.
“CSR and Procurement teams should work together across the sectors on these issues, as addressing modern slavery is a “pre-competitive” issue. Companies can’t compete on sub-standard ethical and criminal practices.”
Jaguar Land Rover (JLR) warns of mega Brexit costs
JLR has become the latest firm to warn of the costs of losing frictionless trade between the UK and EU.
JLR said more than 40% of parts going into cars built in the UK were imported from Europe and it spent £5.37bn with EU suppliers in 2017-18.
“A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year. As a result, we would have to drastically adjust our spending profile; we have spent around £50bn in the UK in the past five years – with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome” said Ralf Speth, CEO of JLR.
Punishing American tariffs on Chinese imports took effect early on Friday, marking the start of President Donald Trump’s trade war with the largest US trading partner and intensifying the anxieties of global industry.
The arrival of the long-threatened tariffs marked the failure of months of dialogue between the world’s two largest economies
An industrial survey confirmed that companies were white-knuckling their way through Trump’s intensifying, multi-front trade assault.
Grenfell: Inspectors label procurement a ‘fundamental problem’
A leading industry certification and inspection body has labelled the procurement process a “fundamental problem” that has led companies to become “complicit in poor outcomes”.
Speaking yesterday at a select committee hearing on Dame Hackitt’s review of Building Regulations, British Board of Agrément chief executive Claire Curtis-Thomas said the procurement process for main contractors represented a “real problem”.
In Dame Hackitt’s post-Grenfell review of Building Regulations, it was suggested the industry should take the lead and decide for itself how to improve building quality and standards.
How can procurement professionals make disability work in the workplace?
This blog was written by Julie Gerdeman, General Manager, SAP Ariba.
One of the greatest joys of my work at SAP Ariba is the opportunity to wear more than one hat; not only heading up our payments business but also serving as the executive sponsor of our diversity and inclusion efforts. At the core of our D&I strategy is an aspiration to build an inclusive culture around the customer, innovation, and employee experience to enable us to become the most diverse company in the cloud.
Recently, I had the honor of hosting SAP Ariba’s popular Diversity and Inclusion luncheon at Ariba Live Amsterdam. This year’s theme, Rising Above the Impossible, focused on the importance of disability inclusion and leveraging accessible technology for better business outcomes because SAP Ariba recognizes them as important to the future of the workplace. For the event we assembled disability inclusion experts from different parts of the globe, and I had the great pleasure to get to know a group of phenomenal and courageous women, including our keynote speaker Nicky Abdinor (Nicky’s Drive) and panelists Lesa Bradshaw (Bradshaw LeRoux), Tania Seary (Procurious), Susan Scott-Parker (BDI), and Stefanie Nennstiel (SAP). I’d like to share with you three nuggets of wisdom from my discussion with them that has left a lasting impression:
1. “If You’ve Got the Drive, the Destination Is Up to You.”
I will never forget Nicky Abdinor, a clinical psychologist, who touched our hearts and minds as she challenged all perceptions around ability with her core message to focus on what you can do versus what’s you can’t. She graciously shared her personal story of overcoming her disability by focusing on her ability to create sustainable change in her attitude, beliefs, and emotions to achieve the possible. She shared her mantra with the audience: “If you’ve got the drive, the destination is up to you.” I thought this was a great takeaway we can all relate to and apply in our lives because no matter if the disability is visible or invisible, we all have the power within us to choose to achieve the possible.
2. “Make Disability Work in the Workplace”
The talent pipeline and impact on the future of procurement is top-of-mind for our Procurement professionals. I see now more than ever that a diverse workforce is imperative for a business to survive in the digital era and is a topic that all our audiences want to discuss.
Our panelists were candid and offered some practical advice for all to use when they returned to their businesses, particularly around “making disability work in the workplace.” Companies must commit to building an inclusive culture that allows all employees, not just the perceived majority, to thrive at work. This begins with recruiting and retaining diverse talent.
At SAP Ariba, we are building our strong foundation by empowering employees to uncover their unconscious biases, which we all carry as human beings, and learning to eliminate bias from decision-making for better outcomes with our Business Beyond Bias training program. In addition, the panelists encouraged the audience to ensure their companies develop a disability and inclusion strategy to empower managers to make intentional decisions around reasonable accommodations that allow everyone the same opportunity to perform their job responsibilities. For example, SAP Ariba has made the intentional decision to participate in the Autism at Work Program because we value neurodiversity and are seeking a specific set of skills to enhance our workforce to widen our perspective on the business. Our disability and inclusion strategy enables our managers to go beyond traditional sources of talent, and this has made a positive impact in our overall employee morale.
From experience, we know that innovations often originate from unlikely sources.
3. Accessible Technology Can Make a Real Difference
Another critical component that enhances the success of disability and inclusion efforts is accessible technologies. The benefits extend from the home to the workplace, as accessible technologies transform the way people with disabilities contribute and thrive. They serve as a tremendous equalizer leading to retention, development and advancement. At SAP Ariba, we are deeply committed to ensuring that accessible technologies are integrated into our business. We are amplifying this approach by promoting the importance of accessible technologies among buyers and suppliers and buyers on the Ariba Network.
The Important Role of Procurement
Procurement leaders play an important role in bringing visibility to the value of a supplier diversity strategy that can increase competitive advantage through an inclusive supply chain, offering opportunities to underrepresented suppliers. By now, we are all familiar with the research that shows companies that embrace diversity are more profitable. If you haven’t already, I recommend reading The 2018 Delivery Through Diversity Report by McKinsey for the latest data and insights.
As I reflect on my wonderful experience learning from our knowledgeable disability and inclusion experts, I feel hopeful and encouraged with the opportunities available to procurement professionals to make a positive contribution toward building an inclusive workforce and a diverse supply chain. Ultimately, as we embrace business with a purpose, the ability to contribute toward the greater good of society fuels my passion for leading and implementing diversity and inclusion within procurement.
Julie Gerdeman is GM and Global Head of Payments & Financing at SAP Ariba.
Procure with Purpose
Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.
Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.
As organisations embark on digital transformations, they must also be prepared to trust in ‘new-ness’, adapt to the speed of change and take note of the 3D’s…
Last week the Procurious team hopped on a plane to Munich to attend Jaggaer’s REVInternational 2018 for two days of inspiring discussion on eProcurement innovations, digitisation, and the future of procurement.
One of the stand out sessions came from futurist Stefan Hyttfors who lectures on how innovation, disruptive technologies and behavioural change affects the worlds of business and social issues.
His mission? To inspire as many people as possible to embrace digital change.
Trust in “new-ness”
“I have a lot of friends working in tech and they often approach me to ask ‘What advice should I give to my peers?’
“And my frequent reply is ‘How come you believe you have any advice to give to your peers?’
“Because if we believe in the concept of disruptive tech then we must also be humble about the fact that experience and knowledge are a problem.”
The reality of the extreme pace of change hit Hyttfors hard last summer when his 20 year old son returned home from university for summer break.
As the family sat down for dinner one evening, Stefan took the opportunity to interrogate his son about his summer plans; would he be spending the break getting some work experience?
‘No I’m not going to work” he replied. “I value my time and I don’t want to sell it to anyone”
Instead of work he had conjured a number grand plans including a road trip around Norway and various other escapades.
Stefan’s line of questioning instantly transferred from ‘What are you going to do?’ to ‘How on earth are you going to afford it?!’
His answer, ‘Don’t worry dad, I have some bitcoin’
“This is the millennial perspective today,” Hyttfors asserts. “And money is a particularly interesting discussion, particularly across generations. Where I was sightly skeptical about how far cryptocurrency should be trusted, my son was offended at the mere suggestion and far more wary of our banking systems.”
“Strange things are happening in the world; things that we don’t understand, thing that we ridicule and laugh at. We are guilty of assuming that our kids need to know what we know”
But in actual fact, it’s a trust in ‘new-ness’ that is going to become one of the most crucial factors for organisations in tomorrow’s world. Money is a great technology and a great innovation; it makes transactions smooth and solves a whole world of problems.
But, as with all technology, it only works if you believe it works…
Pay attention to the speed of change
Disruptive technology is nothing new but the speed of change is ever-increasing. In the past, organisations had the luxury of time permitting them to be skeptical about and distrusting of new innovations, which took 50 years or more to catch on.
Nowadays we hear a buzzword for the first time and within a matter months it’s everywhere; “a unicorn company appears and usurps all the other companies in that space.”
“We talk about organisations like Kodak and Blockbuster as if they were stupid. But the problem isn’t that they were stupid. They were simply the best at doing something no one needs anymore.
“When you are very good at what you do you will not be the one to disrupt your own industry.”
There are examples of this happening in every industry. And it’s never because the old companies were poor. Someone simply found a new way to solve old problems
“The speed of change puts so much pressure on leaders. But if you focus on making current processes more efficient you cannnot disrupt at the same time.”
The 3D’s of Digitalisation
As your organisation prepares for, and embarks upon, digital transformation, take note of Stefan’s predictions for the future of digitalisation. It all comes down to the 3D’s…
As technology advances it figures that we will simply need less ‘stuff’.
As Stefan points out, “If you can solve a problem digitally you don’t need material things.
“Don’t tell your kid that an iphone is expensive – think of all the junk you used to have to buy in the past to do the same job [a single iPhone can do]. It solves so many problems. Nowadays everyone in the world can take pictures for free.”
Dematerialisation means that more people can afford to do what used to be expensive and exclusive.
Deflation, as Stefan sees it, means having “millions of micro transactions rather than thousands of major transactions.”
Take cars as an example. They are absolutely not efficient; often parked for 23 hours of the day and contributing to congestion and pollution in our cities.
Along came Uber, which offers ‘mobility as a service’ and suddenly transportation is transformed globally. Selling £50,000 cars is not an ideal model – mobility as a service is the future.
“We are a big world on a small planet and because of this sustainability will be the main leading strategy of the future.
“We need to make much more with much less.”
We all like to believe that we are part of the last uninformed generation; that we have all of the answers and all of the information. But, in Stefan’s opinion, that’s simply not the case.
We will continue to face big problems and these problems can only be solved with global collaboration and global crowd-sourcing.
“We see a big decline in trust because people don’t believe in old institutions anymore” whether it’s governments, law enforcement systems or our banks.
“Why should my son trust in a banking app when he can trust in a bitcoin app?”
“He believes in decentralisation, a world in which where there is no boss.” Because, at the end of the day, it’s your boss that makes a system inefficient and corrupt.
Trying to build a team of procurement unicorns? You might just want to re-think your strategy…
What makes a procurement unicorn?
They’ve got the grades, the qualifications and years of relevant experience. They tick off every core procurement skill in the book and they’ve worked for some big-name companies.
In short; on paper, they’re perfect.
If you’re self-proclaimed unicorn hunter, you’re probably hoping to fill your entire procurement team with a herd of these mythical creatures. Because you think that’s what’s best for your business…
And that’s where you’d be very wrong. Because in today’s world, Unicorn = Uniform!
With this narrow outlook on your recruitment processes, you run the risk of missing out on extraordinary talents.
It’s impossible to know the unique skills, experience and perspective that a potential hire can bring to your team if you don’t open your mind to their many differences and diversities.
In our upcoming webinar Don’t Go Chasing Unicorns we’ll be celebrating individuality. Join us on 18th July as we explore how organisations can better accommodate people who are differently abled; whether it’s those with physical disabilities or people who are neuro-diverse.
We’ll be discussing:
The importance and benefits of recruiting and retaining differently-abled people to your teams
Why it is such terrible idea to set your sights on procurement unicorns!
How procurement pros can help to build truly diverse teams and foster a workplace environment that is inclusive to everyone?
How are some of the biggest organisations making the workplace inclusive and accessible for everyone?
Who is speaking on the webinar?
Tania Seary, Founder – Procurious
A true procurement entrepreneur, Tania is the Founding Chairman of Procurious, The Faculty and The Source. Throughout her career, Tania has been wholly committed to raising the profile of the procurement profession and connecting its leaders.
After finishing her MBA at Pennsylvania State University, Tania became one of Alcoa’s first global commodity managers.
In 2016, Tania was recognised by IBM as a #NewWaytoEngage Futurist and named “Influencer of the Year” by Supply Chain Dive. She hosts regular procurement webinars, and presents at high-profile events around the world.
In 1991 Swifty was injured by a terrorist attack that resulted in him loosing both his legs above the knee. During his extensive rehab he made a decision to not let his injury affect his life or career going forward.
Since then Swifty has gone on to achieve a huge amount including becoming the first ever double above knee amputee solo skydiver and snowboarder. Swifty’s unique and inspiring story demonstrates the need for employers to be open minded when hiring as without this outlook they could miss out on an extraordinary talent!
Timo Worrall, Senior Category Manager, Facilities Management – Johnson & Johnson
Timo is responsible for the procurement of Facility Services across J&J’s global portfolio, including leading recent initiatives in EMEA and APAC. He is a key part of the team that has implemented the ‘Social Impact through Procurement’ initiative through the J&J business in the UK, including driving the introduction of Social Enterprises into the facilities supply base. It is this work with social enterprises that will help J&J reach its target of a £15 million of social value spend by 2020.
Timo’s work includes contracting a 3 per cent social value target into two regional FM contracts, that will deliver £3 Million of social value across Europe and Asia. Timo believes passionately about the impact that big business can have on impacting the lives of those disadvantaged in our society. He lives in Woking, Surrey, with his wife and two children.
Julie Gerdeman, General Manager, SAP Ariba
Julie Gerdeman is GM Payments & Financing at SAP Ariba. In this role, she is responsible for all aspects of the company’s strategy and execution to transform global B2B payments.Prior to this role, Ms. Gerdeman led the SAP Ariba Digital Transformation Organisation. This team of 100+ advisors lead SAP Ariba’s delivery of customer value: from identification, to enablement through realisation.
Before joining SAP Ariba, she held various leadership positions in sales, customer success and marketing at J.P. Morgan Chase and American Express.Ms. Gerdeman holds a B.A. from Dartmouth College and lives with her family in the Lehigh Valley, Pennsylvania. She is a member of the board of directors for Apparent Financing, an SAP.io funded start-up that leverages data from the Ariba Network to facilitate financing to small business suppliers. Ms. Gerdeman is also the global executive sponsor for Diversity & Inclusion at SAP Ariba and speaks and blogs frequently on this topic.
How do I register for the webinar?
Registering for Don’t Go Chasing Unicorns couldn’t be easier (and, of course, it’s FREE!)
I’m already a member of Procurious, do I still need to register?
Yes! If you are already a member of Procurious you must still enroll to access the webinar. We’ll send you a email with a link to the webinar platform in the run up to the event.
When is it taking place?
The webinar will take place at 10am EDT/ 3pm BST on 18th July 2018
Help! I can’t make it to the live-stream
No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!
Can I ask a question?
If you’d like to ask one of our speakers a question please submit it via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.
Beer, bacon supplies at risk as a national shortage of food-grade carbon dioxide (CO2) threatens a whole range of everyday consumables.
Why is there a CO2 shortage in the UK?
Food-grade CO2 in the UK is sourced from European ammonia plants, which usually close for maintenance in the summer months when demand for fertiliser is lower. This year, five producers in Europe and a number of bio-ethanol plants have shut down at the same time, leading to shortages not only in the UK, but across Europe. The situation is a result of a combination of planned shutdowns and unexpected equipment failure.
Who has been affected?
Brewers – C02 is needed in the bottling and kegging of beer. A Europe-wide beer shortage is particularly noticeable in the middle of a World Cup.
Soft drinks and carbonated water.
Packaged foods such as bagged lettuce and crumpets that use “modified atmosphere packaging” to extend product shelf-life.
According to Wired, there’s currently no alternative to CO2 that offers its range of benefits, such as its ability to prevent microbial growth and its inertness. It is also safe to transport and doesn’t affect the flavour of a food.
The good news? Two ammonia plants are expected to come back online this week, with supplies returning to normal within a fortnight.
Presumably the affected producers will be working with suppliers to ensure the same situation doesn’t occur in the summer of 2019.
Brexit is complicated and it’s very, very messy. And what happens during the next couple of years will be determined by a number of political factors…
At last month’s CPO roundtable Anand Menon, Director of the UK in a Changing Europe based at Kings College London, spoke to us about the long-term causes of Brexit and their future implications.
“Hand on heart I don’t know [what’s going to happen]” he said. “If I could answer that I’d be rich and famous!”
It’s the most uncertain moment in British politics since World War Two and what’s striking is that, two years on from the referendum, nothing has been decided.
A key reason for such uncertainty is the nature of the referendum itself. As Anand explained, the referendum packaged so many different options and outcomes into a binary choice: leave or remain. No one understood quite what they were signing up for and since the result, Brexit has largely been defined in terms of the different adjectives applied to it; black Brexit; white Brexit; hard Brexit; soft Brexit; white red and blue Brexit… the list goes on.
“Brexit was a vote against globalisation and it was a vote against the economic status quo. Subsequently, it’s interesting to see that the South of England has noticed the North and we’ve had a chance to address issues that never got air time under old centrist, liberal politics.
“More profoundly, the referendum and its outcome have taught us about us. In the same way that Trump has been a wakeup call for the U.S, the fallout from Brexit should be a wakeup call to our politicians to think about the real problems confronting the country. ”
And how to best to manage negotiations as we ready to leave the EU.
Does the UK want to establish a relationship with the EU similar to that of Norway’s or maybe more like a more distant partner?
Anand admitted that due to Brexit being such a complex and all-consuming process, there is no avoiding it being a messy one at that! What happens during the next couple of years will largely be determined by the following three political factors:
The UK Prime Minister relatively quickly defined what she meant by Brexit (leave customs market, end free movement etc) and her position has remained relatively unchanged since. Whilst she is unpopular with many in her party, it is unlikely her critics will choose to get rid of her yet. As long as she in place, she is a powerful force for stability.
The Conservative Government
There are a significant number of Tory MPs who want a much softer Brexit than the Prime Minister is proposing so it’s possible they will vote against May’s Brexit deal. However, if May loses this vote there is no question that she has to go; after all, her whole mission as Prime Minister is Brexit. If that happens, the Conservative Party will either elect a new leader or the UK will face a new general election. And the one thing no Tories want is another general election.
The Labour Government
In the last general election, Labour picked up votes from both remainers and leavers. As such, the party have been careful to keep their Brexit policies ambiguous. Whenever Corbyn speaks about Brexit, he speaks in ambiguities.
Does Anand believe there is any chance of a second referendum? “The beauty of Britain at the moment is that any outcome is possible – I can imagine us crashing out with no deal or a great deal but I can also imagine a scenario where the first referendum is overturned.”
“No one knows what would happen to public opinion at this point – we could vote Brexit again. Or, imagine second time around the UK votes to remain 52-48 per cent. We’ll find ourselves in a political groundhog day. There would need to be a huge swing in vote for it to carry much weight.”
Ultimately, Anand warns, the real danger for the UK’s economy is that the negotiations go pear shaped, the UK crashes out of the EU in March 2019 and they end up with no wiggle room to extend the UK’s transition period.
His advice to procurement organisations trying to prepare? Plan for a World Trade Organisation outcome from 2021 – “That, I think, is the most likely outcome.”
Learn how to persuade your colleagues and suppliers with 6 tips from 20th-century propaganda masters. Guest post from Invaluable.com.
Since their introduction in 1984, Dr. Robert Cialdini’s six principles of persuasion have become the framework for understanding the science of influence. Each principle is distinct and outlines different methods for effective persuasion.
Mastering the art of persuasion has become a major “soft skill” in the modern corporate world. The ability to influence others is key to developing strong relationships with suppliers, employees and end-users. Persuasion can help to convince others that we are credible, trustworthy leaders worth following and allows us to manipulate the psychological processes of others to our benefit to achieve better results.
In the procurement profession specifically, strong persuasion skills can help to convince your organisation to be more strategic in managing money and can also be a key factor in your fight to minimise maverick spend.
Learning from the propaganda masters
Before the rise of the social media influencer, advertising and propaganda posters were some of the most powerful persuasion tools available. Propaganda posters have been used for decades to inspire, educate, and galvanize the public. Whether you are selling a product, a war, or an idea, advertising can be a powerful tool to inform and persuade your audience. Propaganda posters from the 19th and 20th centuries addressed topics ranging from patriotism to healthcare to feminism.
This article, originally from Invaluable, takes Dr. Cialdini’s six principles of persuasion and applies them to famous propaganda posters used throughout history to wield influence and power over their audiences. With their striking imagery and bold messages, these posters are superb examples of each principle and perfectly illustrate the mechanics behind persuasion.
The first principle, reciprocity, is based on the idea that people often feel obliged to match or repay the behaviors and gifts they receive from others. When using the principle of reciprocity for persuasion, look for opportunities to be the first to give, and make your token unexpected and personal whenever possible. This tactic facilitates a relationship in which the recipient feels appreciative of your contributions and is likely to be more open to the message you share or the favor you ask for.
The propaganda poster “Remember Your First Thrill of American Liberty” is an example of reciprocity in action. This poster was created by the Food and Drug Administration in 1917 to encourage immigrants to the United States to invest in the war effort by purchasing Liberty Bonds, which were a crucial source of funding for the war effort.
By highlighting the benefits and opportunities that the United States had given to immigrants, the poster called upon its audience to invest in the country’s war effort in return. The poster also strategically included the Statue of Liberty as a metaphor for the opportunities available in the United States and to remind immigrants of the emotional experience of arriving in the U.S. for the first time. The artist’s powerful illustrations and the poster’s authoritative call-to-action prompted Americans to recall their debt to their country, which ultimately proved persuasive in raising money for the war effort. This poster remains a powerful example of the way reciprocity persuades us to act.
The second principle of persuasion, scarcity, refers to the idea that when people have less of something, they want it more. Scarcity speaks to our human nature to place greater value on things that are less readily available. To use this principle, incite people to act, agree, or buy your product by demonstrating how they can benefit from it, what’s unique about your offering, and what they could potentially lose out on.
In the poster “Doctors are Scarce, Learn First Aid and Home Nursing,” the artist used the scarcity principle to promote basic at-home care. By making it clear that good medical care would be hard to come by, the poster instilled fear and communicated the importance of individuals learning to manage their own minor health concerns. The poster was created to communicate people’s need to learn to handle their own injuries and illnesses since many doctors were oversees fighting in the war effort.
This poster is historically significant because it is one of the many examples of ways Americans on the home front were forced to ration supplies and services to aid in the wartime effort. Its message drove Americans to act and remains a powerful reminder of the scarcity principle and its ability to influence.
The third principle of persuasion is authority. This principle says audiences are much more likely to listen to messages from sources they respect or view as experts. Whether you are explaining your point of view or selling a product or service, showcasing your credentials will help your chances of success. No matter what your message is, it will be better received if it is packaged in a way that makes it seem authoritative.
When using authority, the source doesn’t always need to be yourself. When someone else points to your credentials the message can be just as powerful or even more effective. In the propaganda poster “Christ Guerilla,” Jesus was portrayed as a guerilla fighter. The poster was created by the Organisation of Solidarity with the People of Asia, Africa, and Latin America based on a quote from the Colombian priest Camilo Torres who said, “If Jesus were alive today, he would be a guerrillero.”
The poster called on the authority behind the Christian religion to convince audiences that being a guerilla fighter was a noble cause. This piece of propaganda was created in Cuba during the 1970s as part of a political movement to fight imperialism and defend human rights. Its message was clear: guerilla fighting was noble, necessary, and moral. Because the poster called upon the authority of Jesus to deliver its message, its theme was especially resonant for its audience.
The consistency principle refers to the idea that people like to remain resolute with the things they have said or done in the past. If someone already agrees with some of your message, or if you are able to get your audience to buy into your point of view in a small way, you’re much more likely to convince them to take further action.
The “We Can Do It!” poster used the consistency principle to encourage women who were already working in factories to work harder. While today this poster is considered one of the most iconic U.S. propaganda posters of all time, it was not widely circulated during World War II when it first appeared. The poster was made in 1943 by J. Howard Miller for Westinghouse Electric, and was part of a broader effort to encourage both male and female workers to work harder due to the high demand for manufacturing generated by the war effort.
The poster resonated with women in its original context in the 1940s and continues to serve as an icon of feminism today. When it was first created, the poster used the consistency principle to remind women of the importance of committing to their factory jobs while encouraging them to work harder and stay motivated. The likeness of Rosie the Riveter still resonates, and the poster has become a rallying cry for recognition of equality.
It’s commonly accepted that people are more likely to agree with the opinions of someone they like. The fifth principle of persuasion, liking, is based on this idea. This principle notes that people agree with those who are similar to them, those who pay them compliments, and those who cooperate with them. If you know your audience already likes you, you have a leg up for persuasion, but incorporating these three factors into your communication efforts can go a long way towards making your audience receptive to your message. Before making your case, consider spending a few moments with your audience to build rapport and likeability.
The poster “Women of Britain Say ‘Go’” incorporated the liking tactic to encourage the men of Britain to buy into the government’s request to join the war effort. During World War I, posters were one of the most important mediums for conveying a message. Women were used in these posters to spread ideas of morality, innocence, and justice in the face of danger.
While this poster was intended to remind the women of Britain to encourage their men to enlist, it also clearly communicated to British men that they’d be spurned by their loved ones if they refused the call to serve. Using the opinions of their families as advocates proved to be an effective persuasion tactic in getting men to enlist.
The sixth principle, consensus, is the idea that people are likely to agree with something if it is in line with what the broader group believes. To get others to believe in your message or your product, point to what those similar to your audience believe and do. When people are unsure of how to act, they look to the behaviors of others they identify with to determine their own beliefs. By highlighting what your audience’s larger social group thinks, you are more likely to get their buy-in.
The title of the poster roughly translates to “Let’s Fulfill the Plan of Great Works,” and shows clear parallels to the consensus principle. The tiny hands fill up a larger hand to communicate to the viewer that all of Russia is working together to reach a common goal. The poster was created in 1930 by Gustav Klutsis, a popular poster artist during this time period who was a popular designer for the Soviet government. This piece was created in the Constructivist style, which originated in Russia in 1919.
Klutsis was associated with the Communist party and created propaganda art for the organization, especially when the party was under the control of Stalin. The hand in this poster is Klutsis’ own hand, but it was used in the poster to represent the workers who were crucial to achieving the Communist party’s goals. The artist incorporated the faces of the workers directly into the poster’s design so they appeared not as individuals, but as a collective mass united around the same goal.
Both ISM and CIPS have released their annual salary surveys. Read on for a short summary of the similarities and differences in salaries across the Atlantic.
Salary surveys make for interesting reading. They reveal much about the perceived value of procurement and supply management, and provide a very helpful data set to have at your disposal the next time you ask for a raise.
If you haven’t seen them already, the two most comprehensive salary surveys for 2018 are available here:
Let’s look at 5 of the most interesting findings across the two surveys:
Average salaries for the profession
ISM has announced that the average overall compensation for participating supply management professionals was US$117,425, while CPOs earnt an average of US$263,578.
CIPS reported an average salary of £46,422 for procurement and supply professionals, with CPOs earning an average salary of £124,000.
Salary increase smashing the national average
In the U.S., ISM reported that supply management salaries rose an average of 4.1% over 2016 salaries, versus 3% for U.S. professionals generally.
CIPS found that 68% of procurement professionals received an average 5.1% increase in salary, versus a 2.2% increase for the UK national average.
Paul Lee, Director of ISM Research & Publications, offered the following explanation:
“In today’s global economy, excellence in supply management improves both top- and bottom-line performance, and advances companies’ leadership on the worldwide stage. Supply management professionals’ higher-than-average wage growth reflects the significant value they add every day”.
Certifications DO boost salaries:
ISM: Those with the ISM Certified Professional in Supply Management (CPSM) certification averaged 14.7% higher salaries than those without any certification.
CIPS: The data reveals that MCIPS and FCIPS professionals have increased earning power, with an average 12% salary disparity between MCIPS and non-MCIPS, and an average of 11% disparity between FCIPS and non-FCIPS across all job levels.
Most important factors when considering a new job
We’re a mercenary bunch. “Salary” has once again come out at the top of both ISM and CIPS’ research into what people consider when evaluating job opportunities. Beyond the money, however, are some other factors that employers should note:
Company commitment to training and development: 58%
Gender gap disappointment
ISM’s data reveals women are paid less than men across every level in U.S. supply management, with male CPOs earning 26% more than female counterparts, male VPs earning 52% more than women, and male Emerging Professionals earning 13% more than women.
CIPS reports that the most striking pay disparity exists at the Advanced Professional level, where men earned 33% more than women, a pay gap that has widened since the previous year’s (25%). Pay disparity at the Professional and Managerial levels is also considerable, at 14% and 11% respectively
What would you do after all of the low-hanging fruit in procurement has disappeared?
Here’s a quick quiz:
What would you do if you became the CPO of a procurement function that is a top-quartile performer and already highly mature?
Keep things as they are – if it ain’t broke, don’t fix it.
Make small, incremental improvements, being careful not to change anything significantly.
Roll your sleeves up and transform the function from top-quartile performer to a world-class organisation.
Bob Murphy was faced with this choice back in 2014 when he first took on the role of IBM CPO. In many ways, inheriting a highly-mature procurement function is more of a challenge than stepping into a low-maturity team. For Bob, the low-hanging fruit had all been picked: the team had already undergone a significant transformation, it was recognised internally and externally for its high level of excellence, cost savings were at record levels, and supplier relationships and sourcing strategies were delivering results. Client engagement and interlock with business unit stakeholders was also maturing, while procurement was viewed as a key function enabling business unit objectives.
So, what was there left to do? Bob’s challenge – as well as his opportunity – was to take a high-functioning team that was delivering best-in-class outcomes and make them evenbetter. He did this through unleashing his passion for the profession, leveraging 30+ years of procurement and supply chain experience to mobilise a global team of 3000 procurement professionals around a shared vision.
He developed a set of global, transformative initiatives and domain priorities that moved IBM from the front of the pack to a truly world-class outlier position. Today, IBM Procurement services have arrived at a status dreamt of by many CPOs – that of an essential trusted advisor to the business.
IBM’s secret recipe for success isn’t actually a secret – the roadmap established by Bob early in his tenure as CPO covers six key areas:
Investment in talent and skills development
Digital transformation through AI (Watson cognitive procurement), robotic process automation and Source-to-Pay transformation.
Unlocking big data to drive informed, outcome-based decision making for IBM and its clients.
Supercharged engagement through end-to-end ownership for deliverables and client-aligned squads, while satisfaction is captured using the Net Promoter Score.
Deployment of Agile principles and self-empowerment across the entire team.
Growth of supplier innovation as complex enterprise relationships mature.
It’s interesting to note that people and talent are at the very top of Bob’s list. To quote an article he wrote for Procurious, “I learned a long time ago that the key to success is having a great team. And there is a very human element to procurement. There will always be a need for people to handle the relationship management side of the function, with both suppliers and stakeholders and make the strategic decisions.”
Although he operates in a highly technical sphere, Bob stresses the importance of soft skills:
“When we think of the soft skills necessary for future success in the procurement industry, we focus on building closer stakeholder and supplier relationships. Broadening our communications skills, including active listening is a key enabler to both visibility to value proposition, but also in understanding our stakeholder requirements from their point of view. Another critical element is having better agility skills; think flexibility, adaptability and speed.”
Bob Murphy’s achievements in leadership were celebrated at the Procurement Leaders awards in May, where he picked up the prestigious 2018 Procurement Leader Award.