All posts by Procurious HQ

Gender Diversity: Would You Leave $12 Trillion On The Table?

Anne Tesch is one of those professionals who has facts and figures at her fingertips to back up every point she makes. As she tells Procurious, it’s vital that supply managers have the facts in their possession when pursuing a goal as important as increasing gender diversity.

Why should gender diversity be high on every company’s agenda?  

Where should I start? There’s a vast amount of global research and evidence on the importance of women’s economic empowerment and the benefits of hiring women-owned businesses. To list a few key studies:

  • McKinsey’s Global Institute report found that $12 trillion could be added to the Global GDP by 2025 by advancing women’s equality. Economies most impacted (with GDP gains) would be India (16%), Latin America (14%), China (12%), and Sub-Saharan African (12%);
  • Another McKinsey survey found that 34% of companies said working with women-owned suppliers had increased their profits;
  • Women perform 66% of the world’s work, produce 50% of the food, but earn only 10% of the income, and own very little of the world’s private property;
  • There are approximately 187 million women entrepreneurs worldwide who own between 32% and 39% of all businesses in the formal economy;
  • Women dominate the global marketplace by controlling more than $20 trillion in consumer spending that will rise to $30 trillion in the next decade; and
  • According to research conducted by WEConnect International, women-owned businesses globally earn less than 1% of the money spent on products and services by large corporations and governments.

What are your recommendations for supply managers looking to increase their engagement with women-owned businesses?

1. Know your numbers

Firstly, it’s important to know the percentage of women-owned businesses in your supply arrangements.  Why not do some research and ask suppliers if they are “women-owned” which, by definition, means that they are at least 51% owned, managed and controlled by one or more women. Furthermore, why not consider tracking tier 2 spend, as smart companies will often increase spend with women-owned businesses to win large contracts.

 2. Spread the word

Convince others in your team that working with women-owned suppliers is good for business. A recent McKinsey survey indicated that working with women-owned suppliers increases profits, while the Hackett Group’s research last September shows 99% of diverse suppliers meet buyers’ expectations, with nearly 25% exceeding expectations.

Though improvement to the bottom line is always important, incorporating women-owned businesses in your supply chain also provides an opportunity to grow your customer base, attract and retain talent, and enhance your branding – all while increasing profits and reducing costs.

 3. Network, network, network

Accessing networks of women-owned businesses, even just to participate in RFPs, is a critical success factor but one of the more difficult parts of starting and managing a supplier diversity program.  Engaging with third parties that specialise in connecting buyers with diverse suppliers, such as WEConnect International, can assist this process. Our organisation certifies women-owned businesses through a rigorous, globally accepted process, and provides access to these organisations through our eNetwork.

What are the proven benefits of having more women in your supply chain?

Women influence the vast majority of purchasing decisions globally, but they are significantly underrepresented in global value chains. Even though more than one third of private businesses are owned and controlled by women, on average, women earn only 1 percent of large corporate and government spend globally. Benefits of having more women in your supply chain include:

  • Mirroring your diverse customer and employee base – it’s important to reflect the communities around the globe where you operate, not only with staffing, but also with your supplier base;
  • Supporting your corporate clients – more corporates are growing their tier 2 inclusive sourcing programs and requesting reporting from their prime suppliers;
  • Supporting business growth in new markets;
  • Accessing innovation and securing competitive advantage from new SMEs offering more creative options;
  • Reducing costs through competitive bidding;
  • Accessing local networks and knowledge; and
  • Enhancing the company brand and community engagement by promoting success stories about working with women-owned businesses.

Anne Tesch and other leaders in the profession will be speaking at Quest’s Women in Procurement 2017 event in Melbourne on 26-27 April. Visit Quest Events to download a brochure and find out more.

WEConnect International is a global network that connects women-owned businesses to qualified buyers around the world.

Best Of The Blog: The Top 5 Ways To Stand Out In Procurement

There are millions of procurement professionals in the world. How do you make sure you stand out from the crowd?

Everyone loves a good throwback article, which is why we’re hopping in our time machine to bring you back some of the biggest and best Procurious blogs. If you missed any of the golden oldies, look no further!

This week, we’re revisiting an article by Anna Del Mar who explains how to stand out from the crowd!

Stand out from the crowd

There are millions of procurement professionals around the world. And every single one is different.

Which is fortunate, given the range of activity which Procurement has to undertake, and the different characteristics which are necessary to succeed in those roles.

In amongst that diversity, there are a number of characteristics which the most successful can display. These characteristics are ones worth cultivating in our careers.

There is no particular order here. But our top five ways to stand out will always contribute to success, both when working in the organisation and when we’re seeking to develop our careers.

1. Communicate like a Professional

This is true in many parts of the business, but is absolutely critical for Procurement. We’re often trying to sell hard ideas, to get concepts across, to change opinion and views, and to do all of that we need to be excellent at communication. Not just Powerpoint, but using a wide range of media, types of communication, styles and messages.

We also need to be excellent at preparing and rehearsing our communications, getting them on point and noticeable, able to stand out above the in-company noise. To do this, we need to spend time practising and getting our messages right.

As Mark Twain once said, “I didn’t have time to write you a short letter, so I wrote a long one instead.”

Be hard on yourself, and seek to improve. Being able to prove your understanding of the way Procurement needs to communicate and influence upwards with examples, will impress any recruiter.

2. Take the Wider View

Procurement can be accused of being one dimensional. We can get sucked into delivering price based targets, and loose sight of the bigger picture.

To operate effectively, we need to be excellent at maintaining a broader commercial perspective for the organisation, and making sure we’ve got both the short view and the long view in our sights.

The best in Procurement stand back and take in what the business really needs to achieve. They seek a balance between often conflicted requirements from different stakeholders. If we can maintain that overview, we will often deliver far more than if we get sucked into a one dimensional view.

Showing business aptitude and seeing procurement in terms of solving business problems, is an extremely valuable asset to any procurement function.

3.Bounce Like a Rubber Ball

Procurement can be tough. As the people on point for delivering value from the supply chain, we often can feel the weight of the business on our shoulders, while still trying to get through to a value improvement we can see but can’t quite reach.

To maintain a high degree of performance we need to have a high degree of resilience, to be able to bounce back and keep going. Holding onto our core beliefs, keeping going when it’s being sought and getting to the outcomes we want to achieve are great outcomes all by themselves.

There is no doubt that Procurement requires tenacity. Be able to prove your ability to stay the course for long term sustainable results rather than short term glory.

4. Network

The technical stuff is often less of an issue than the people stuff. This means that we need to network hard, identify the decision makers and opinion formers, and be aware of their issues and agendas.

Knowing who people are, what their concerns and needs are, and being able to reach out to them to both influence but also to offer support, is a massive help when trying to progress our own agendas.

It isn’t a one way street of course. These relationships are precious. We need to make sure we’re managing our relationship resources, just like we should be protecting our time. Show how you value your network and how this helps improve the positive effect of procurement.

And finally…

5. Know your Stuff

There’s nothing better than watching someone with a fantastic grasp of category and business issues making a case.

Having a broad grasp of what is happening in a market, how it relates to the business overall, looking at short and long term effects, providing imaginative solutions which test the range of what is possible, with stakeholders aligned or at least neutral, with a thought through plan of action. Those are the days when the future of Procurement looks brightest. The individuals delivering that insight will look like stars in the organisation.

Whilst you may not need to have deep category knowledge to get your dream job, having an understanding of procurement excellence and the challenges of buying in markets is key to bringing true expertise to the function and will be seen as an asset.

None of the above happens by default. It requires personal insight and understanding to make sure that skills and attributes develop in these areas. Spending time in each area is extremely worthwhile. Taking time out appraise ourselves in these areas, or get feedback from others, will give a big step up in how we’re viewed.

Good Luck!

Fancy Sharing The Procurement Workload With AI?

Technology will help procurement pros to do their jobs faster and more efficiently, lessening their workload. What are the key AI trends we can expect to see in the coming months?  

Nearly every day we encounter stories and predictions about how artificial intelligence (AI) will fundamentally change a variety of industries. The challenge is explaining what this type of technology could do to improve certain functions and jobs. Let’s take a look at the trends we can expect over the coming months.

Artificial intelligence will expand in analytics, intelligence gathering and visualisation

We’ve already seen speculation about the industries who will benefit the most from AI, and we’ll continue to see improvements as more and more companies adopt the technology. We will further see the expansion of the way humans in the workforce interact with AI-based solutions.

When it comes to the analysis of data, especially unstructured data, AI can be taught the nature of words and sentences and string together concepts and gists within the text. This goes far beyond the basic keyword search functions most people are familiar with. AI can then present the information to business users, and not just highly trained data scientists, in a format suitable for them. In understanding the contents of extremely large numbers of documents, AI can take a huge workload off human reviewers and help them do their jobs faster and more efficiently.

Through the use of AI, companies will have an advantage on a competitive global stage, without sacrificing the well-being of their employees, and these applications alone will be the first area of widespread use this year.

M&A activity in 2017 will rebound with a record year

Last year was a disappointing year for mergers and acquisitions. Between the broken deals with Allergan and Pfizer, Halliburton and Baker Hughes, and many more, investors and companies alike were starting to panic about the future of the economy. This year things will quickly change and we’ll be on the rebound with a record M&A year.

According to a new Deloitte report, 86 per cent of private equity and 71 per cent of corporate dealmakers are expecting to close more deals in the next twelve months. While many people feared the uncertainty of major events like Brexit, it will present a whole new opportunity for M&A deals in 2017.

Contract intelligence solutions can help to alleviate some of the challenges M&A brings. By gaining a much stronger insight into the contract portfolios of companies they are targeting for acquisition in the due diligence phase, they dramatically reduce the risk and liabilities they may be acquiring. This insight is fast and efficient, and provides significant transparency in to contract obligations while keeping the deals on track.

Contract Management – CLM will need to change

Contract lifecycle management (CLM) vendors manage contract processing through technologies such as document repositories, workflow, and authoring. It has been recognised that the utilisation and ROI provided by these CLM technologies is not where it needs to be, and they are lacking in the management of contract data. These systems provide user defined fields, and users must manually input this data to manage obligations and run analytics on key fields such as term, renewals, counterparty information, pricing and incentives. The data manage with CLM is generally inconsistent, error prone, and inefficient, and organisations with CLM systems will clearly struggle with understanding the data in their existing contacts as they go into the CLM, but also new contracts.

This year, organisations will realise CLM only solves part of the problem they are working to solve, and complement CLM with contract discovery and analytics tools — based in AI technologies. The combined solutions will create the needed efficiencies in the contract lifecycle, but also allow them to dynamically extract the data they need from contracts, when they need it, allowing for deeper analytics and increased insight into critical business relationships. The old way of data management with contracts will be considered obsolete this year, and richer analytics will become the norm.

Contracts – the “new source of Business Intelligence”

Right now, businesses spend a lot of money and time extracting insight from structured data. The current “big data” solutions process sales data, manufacturing data, financial data, social data, etc., but not the data buried in unstructured documents. Solutions exist now to analyse data from large quantities of documents and provide very valuable insight that can be used for effective decision making.

This is especially important when it comes to contracts. Instead of legal teams reviewing contracts to ensure an organisation is complying with the law or with new or changing regulations, contracts will be seen as a valuable new source of business intelligence.

Dashboards are now being created that bring together structured and unstructured data to provide new views into the business that were not possible before. Contracts will be appreciated as a new, and untapped source of business intelligence that a new generation of technology can now mine in a very intuitive and cost effective way.

This article was guest-written by Seal Software, a leading provider of contract discovery. Seal Software uses artificial intelligence and natural language processing to help companies efficiently uncover what’s in their contracts.

Forget the Bus, I’ll Travel To My Meeting By Drone!

What will business travel look like in 2017?  We’re not going to see people riding around in personal drones (yet) but it’s starting to look more like The Jetsons all the time.

Technology is having a big impact both on the way employees travel and how managers help them move around the world with ease. Sunny Manivannan and Ethan Laub of our travel and expense team, and Jack Miles, a long-time procurement executive and business advisor share their thoughts on what the year may bring.

1.    Travel and expense management goes mainstream

For firms with good governance and a cost management mindset, travel and credit card spend has always been a focus. Due to rising costs, and a new generation of technology for automating in this area, we will see laggards start to pay attention and begin to focus here as well. –Jack Miles

2.    Loosening of T&E policies

Companies with modern automated tools will relax their travel and expense policies, paradoxically because they now have so much granular T&E data. This might come as a surprise, but we see the T&E spend culture at customer organizations undergoing a once-in-a-generation shift. Given the rise of knowledge workers, the competition for talent and the focus on employee happiness in today’s leading organizations, companies are trying to find ways to give their employees more flexibility. With the data now available to administrators, companies can relax their policies in certain areas and give their employees more flexibility while still protecting the organization from fraud. -–Sunny Mannivanan

3.    Savvier negotiations as hotel costs rise

Travel costs–typically one of the top four expense categories in most firms–will rise as consolidation in the hotel industry continues. Given Marriot’s acquisition of Starwood and other hotelier consolidations, expect to see an increase in average room night cost. Companies with a focus on sourcing for this category will use their data to look beyond room night cost and add in ancillary costs such as food and beverage, parking, and conference and event spend if they have it to give them more leverage in negotiations. –Jack Miles

4.    Airbnb makes inroads with corporates

Airbnb will continue to grow share in business travel as its integrations with corporate travel agencies and booking tools starts to pay-off. Three major travel management companies (TMCs) signed partnerships with the homesharing platform last year, driven at least in part by corporates expressing interest. According to Lex Bayer Airbnb head of global payments and business travel, Airbnb’s average business trip booking is six days. Again, it’s about giving employees options, and a home may better suit travelers in town for a longer-term project than a hotel room.  –Ethan Laub

5.    Ground travel prices fall

Ground travel (Uber, taxis, limos) is one area where prices will decrease. Black car services will continue to lose share to Uber and Lyft, as the car sharing titans roll out more corporate-friendly controls and reporting. Gaining corporate clients has been harder for pink-mustachioed Lyft, according to sharing economy expert Arun Sundarajan, but it scored a major win when Apple announced them as a preferred partner last spring.

Besides increased competition, lower costs are also driving prices down. Newer, more fuel-efficient cars make up a bigger share of fleets, and fuel rates are currently low. There’s one thing that could cause rates to plummet, rather than just tick down: driverless cars. Fuel isn’t the biggest cost. Neither is the car–cars these days are made so well they can easily last for ten years or more. The biggest cost is the driver. Without drivers, rates for rides could fall by as much as 90 percent over the next two or three years, some analysts say. –Sunny Manivannan and Ethan Laub

6.    Expensing of a driverless ride

 Speaking of driverless cars, here’s a bold prediction: 2017 will mark the first time we see an expense line filed for an autonomous car ride. While Uber had to halt its test of autonomous vehicles in San Francisco last December, there are more than a dozen companies either publicly or secretly working on autonomous vehicles. It’s only a matter of time before this technology makes it to the business market. Our question is, what will this expense line look like? What will the amount be? Who will be the vendor of record?

Perhaps there’ll be a time in the not-too-distant future where transportation isn’t something employees even expense. It will simply be a public utility like electricity, where every company simply pays per employee-mile at the end of each month. –Sunny Manivannan 

7.    Virtual assistants everywhere

Since we’re getting all futuristic here, we’re going to go out on a limb and predict that in 2017, every employee will have an assistant, not just executives. These assistants will be virtual, not physical. With Apple’s Siri, the Google Assistant, and the Amazon Echo, consumers have been exposed to the grand idea of a digital around-the-house helper a la Rosie the Robot. And, many business travelers have already experienced a degree of this with mobile apps that do things such as automatically fill out your expense lines based on geolocation data.

This concept will really take off in 2017, with employees having access to really intelligent, self-learning assistants, no matter where they are. And, we will be able to call on these assistants with the touch of a button, a few taps on our keyboards, or simply our voices.

Sunny Manivannan is senior director of special projects at Coupa. Ethan Laub is director of product management. Jack Miles is principal consultant at Mainspring Advisors, a business strategy consulting firm. This article was originally published on the Coupa blog

Women in Leadership: Don’t Make The Mistake Of Behaving Like A Man

Women in leadership: Have you ever had to “behave like a man” to get ahead in the workplace? As part of the Bravo campaign, Procurious will be hearing from a number of high-profile procurement leaders on the topics of diversity, equality and women in procurement.

This week, Procurious caught up with M.L. Peck, Chief Content & Engagement Officer at the Institute for Supply Management (ISM), who is concerned that even in the modern workplace, many women still feel they have to behave like a man to succeed.

She’s the man 

Remember Twelfth Night? Shakespeare’s comedy featured a shipwrecked woman (Viola) who disguises herself as her lost twin brother (Sebastian) to find work in the service of Duke Orsino. If you’re not a Shakespeare fan, you may have seen the 2006 adaptation She’s The Man (starring Amanda Bynes), where teenager Viola Hastings disguises herself as a boy in order to play on the all-male soccer team. Both Violas have to learn how to behave like a man, with their accidental lapses into femininity providing many of the plot’s gags.

Don’t change

“Women shouldn’t have to change who they are in order to be taken seriously. Nobody should”, says M.L. “What we absolutely don’t want is to create a mold of how to be strong leader. Our differences are what make us an asset to the teams we work in.

“I’ve had the fortune to work with women who brought an inherent, feminine ability to collaborate, empathise, multitask and problem-solve to their teams. These qualities are often overlooked and under-represented in the workplace, where we expect our leaders to be hierarchical and dictatorial in approach. In procurement, particularly, collaboration is key. The characteristics attributed to women are the ones that all of our future leaders will need – you can bet that millennials and generation Z won’t want to work in a male-dominated environment.”

But what does “behaving like a man” actually mean? Stereotypical male qualities might include strength, dominance, bullish confidence and as little display of emotion as possible. M.L. comments that when women find themselves in a male-dominated workplace, “We can make the mistake of trying to behave like a man by adopting the characteristics typically associated with men.”

Workplaces still have a long way to come in accepting that people, and leaders in particular, are able to display emotion. Men and women are taught that leaders must be “strong”, which means emotions such as compassion and empathy are redundant. “We’ve still got some of these issues in 2017”, says M.L. “Men who show empathy are thought of as weak, while empathetic women get labeled as emotional. If you choose to lead a team without resorting to an authoritarian style, it doesn’t mean you won’t be able to add enormous value in your own way”.

This, in a nutshell, is the power of diversity in our organisations. Building a diverse team of people from different genders, backgrounds and experiences will add new perspectives and insights, which ultimately leads to a better decision-making process.

Working twice as hard to be thought of as half as good

M.L. remembers her mother’s experience in the workplace, citing her as one of her inspirations. “My mum was a pipefitter and really lived in a man’s world. She was the first female on the refinery fire-fighting team. I was raised with my mum’s understanding that women needed to work twice as hard to be thought of as half as good.

“In this scenario, it’s easy to feel victimised; to think ‘I’m different, and people are perceiving me that way’. This makes it all the more tempting to conform to certain workplace behaviours, but my mum always retained her own identity.”

3 ways to encourage more women into procurement leadership roles

  • Initiatives that advocate for diversity are vital, particularly in supply management where there aren’t nearly enough women in leadership positions. Procurious’ Bravo campaign is a great example, as is ISM and THOMASNET’s 30 under 30 Rising Supply Chain Stars award, along with ISM’s annual Diversity conference.
  • Providing access to female role models and mentors will help organisations attract and retain women from entry-level through to senior positions. Organisations that want to attract top female talent need to have a diverse and inspiring leadership team.
  • Shout about what you’re doing to address gender disparity in the workplace. Companies that hold special events for women or minority groups really do see a difference – events give people an opportunity to build their networks, and provide direct access to the C-Suite who make the important decisions about diversity and inclusion.

Get involved with the Bravo campaign via our Women in Procurement group. Join M.L. Peck and other members of the ISM Leadership team at ISM2017.

You Could Be In For A Nasty Shock This Easter

What’s “shrinkflation”? It’s the practice of selling a smaller product at the same price, and it’s increasingly common in the chocolate industry. Procurious looks at three big stories about Chocolate supply management that have hit the news in the past week. 

Regulation impacts complexity, complexity impacts costs, and costs impact the size of your chocolate bar.

Shrinkflation: Why Brexit means Cadbury chocolate bars will get smaller

It might be time to panic-buy your favourite Cadbury chocolate bars in bulk, because Cadbury UK’s parent company (Mondelez International) has warned that Brexit could lead to higher prices, or shrinkflation.

What’s shrinkflation? It’s the practice of selling smaller products for the same price. Mondelez has done this before, when its new-look Toblerone was revealed to have wider gaps between its iconic chocolate triangles, reducing the weight from 400g to 360g but selling at the same price. A pack of six Cadbury Creme Eggs – an Easter favourite – was also reduced to five eggs with only a slight decrease in the recommended retail price, from £3.05 to £2.85. The company has pointed to rising commodity costs, the falling value of the pound and an increase in cocoa prices, while Brexit is expected to make it increasingly costly to do business with other countries in the future.

Mondelez’s UK boss Glenn Caton told The Guardian that his organisation is watching the Brexit negotiations closely. “First of all [the Government] needs to make sure we have a stable and thriving U.K. economy,” Caton said. “If the economy is growing, all businesses benefit from that. Secondly, ensuring there is no new, more complex regulation and that there is free movement of goods and minimal barriers to trade. Regulation impacts complexity, complexity impacts costs, as do trade barriers and tariffs.”

Mondelez has invested more than £200m in Cadbury UK, including £75m on modernising manufacturing at Bournville in Birmingham, the home of the 193-year-old Cadbury brand. Bournville is also home to the global R&D team, which has grown from 25 to 250 people since Mondelez took over in July 2013.

Mars reinvests US$70 million in US supply chain while president warns of protectionism

Mars is re-shoring its manufacturing operation in a move that will mean over 95% of its chocolate products sold in the US are made domestically.

The investment of $70 million will add approximately 250 new jobs to production sites across the US, including a Mars Food factory in Greenville Missouri which will receive a $31 million injection. Last year, Mars poured US$52 million into its chocolate factory in Ontario, Canada.

The announcement was made on the same day that Mars Good President, Fiona Dawson, told the American Chambers of Commerce to the EU that protectionist trends worldwide are “threatening to undermine global trade and make the world less connected”.

“The absence of hard borders with all their attendant tariff, customs and non-tariff barriers allows for an integrated supply chain, which helps to keep costs down. The return of those barriers would create higher costs, threatening that supply chain and the jobs that come with it.

“If Britain ends up trading with the EU on the basis of WTO rules, ‘Most Favoured Nation’ rates would come into force. In the area of confectionery that alone would mean tariffs of around 30%.” 

Prince Charles seeks to halt chocolate-industry deforestation

HRM Prince Charles, a keen environmentalist, convened a meeting with global cocoa and chocolate companies to target deforestation in the cocoa supply chain. Delegates from twelve major companies, including Hershey, Mars and Nestle, met with senior government representatives from two of the world’s leading cocoa-producing countries, Cote d’Ivoire and Ghana.

In his speech to the attendees, Prince Charles noted that aside from environmental damage, “The most powerful direct reason for action is that deforestation threatens to undermine the very resilience of the cocoa sector itself, and with it the livelihoods of the millions of smallholders who depend on it, due to the increased climate variability that follows forest loss.”

The meeting resulted in a Collective Statement of Intent to end deforestation and forest degradation in the cocoa supply chain.

That’s more than enough about chocolate. In other procurement news this week…

UK Grocery Chain Waitrose introduces trucks powered by rotten food

  • Waitrose has partnered with bio-fuel company CNG Fuels to place an order for 10 flatbed trucks that will be powered entirely by rotten food.
  • The fuel will be sourced from unsold food at supermarkets across the UK. Globally, an estimated one-third of all food, or 1.3 billion metric tons of produce – goes to waste every year.
  • The new biomethane trucks have an average range of nearly 500 miles, with the biofuel to cost 40% less than diesel fuel. The biomethane emits 70% less carbon dioxide than diesel.

Read more on Konbini.

Boeing’s VP Supply Chain nominated for US Deputy Secretary of Defence

  • The White House has nominated Boeing’s Patrick Shanahan as Deputy Secretary of Defence, with a view to tap Shanahan’s knowledge of the business side of military aircraft procurement.
  • In December, Trump rattled Boeing management with a Tweet complaining about the high cost of replacing the presidential plane (Air Force One) and threatening to cancel the program. Since then, the relationship between the White House and Boeing appears to have improved.
  • Under new ethics rules, Shanahan will be required to recuse himself from any Boeing-related procurement contract decision for the next two years.

Read more on Seattle Times.

Best Of The Blog: Can We Agree To Stop Calling Them Soft Skills?

How did soft skills come to be known as this? And does calling them this underplay their importance in the modern procurement world?

Everyone loves a good throwback article, which is why we’re hopping in our time machine to bring you back some of the biggest and best Procurious blogs. If you missed any of the golden oldies, look no further!

This week, we’re revisiting an article by Hugo Britt  in which he explains why soft skills are anything but!

The English language is full of misnomers. Just ask the killer whale (actually a dolphin), or the horny toad (actually a lizard). Once a word or phrase has entered common usage, it’s near-impossible to change it, even if the population generally understands that the term is misleading.

Which brings me to “soft skills”. I work for an organisation that provides training for procurement and supply chain professionals. As such this is one of the terms that I hear bandied about many times a week.

My argument is that defining this skill-set as “soft” actually devalues an essential part of every procurement professional’s toolkit.

To quickly summarise, soft skills are those used in dealing with other people. These include skills such as communication abilities, language skills, influencing skills, emotional empathy, and leadership traits. In contrast, “hard” skills – such as tendering or IT competencies – are readily measurable and (importantly) easier to train.

How Did They Come to be Called Soft Skills?

I’d be interested to hear if anyone has been able to pinpoint the first usage of this term.

The concept has been applied to business environments since at least 1936, when Dale Carnegie’s famous self-help book ‘How to Win Friends and Influence People was published. Carnegie’s work, which has sold a phenomenal 30 million copies to date, is essentially the definitive guide to soft skills. However, it stops short of actually using these words.

Recently, there seems to have been an explosion of articles and training courses focusing on soft skills, particularly in procurement. My theory is that procurement – having moved from back-office to business-partnership status only a decade or so ago – is, in effect, late to the soft skills party, and is currently playing catch-up.

It’s possible that the term “soft skills” simply came about as an antonym to hard skills. Perhaps it reflects the “softly-softly” approach, where managers choose to influence, rather than confront, and to make suggestions, rather than issuing orders. Whatever the reason, I believe it’s a misleading term due to the other connotations of “soft”.

These Skills are Anything But Soft

To my ear, “soft” means easy, pliable, or yielding readily to pressure. Yet a procurement professional with excellent communication abilities, who is adept at reading people, will be a “harder” opponent in negotiations, than a colleague lacking these skills.

Similarly, the connotation with “ease” is deceptive when it comes to trying to train for skills like change management or leadership. And quantifying the results of that training is more difficult still. Hence we’re hearing more and more that employers are hiring people based on their attributes (cultural fit, communication skills, willingness to change), recognising that hard skills can be easily picked up later on.

This has changed the approach recruiters are taking in job interviews. There is now less emphasis on hard skills, and more behavioural questions about how you would react in certain situations.

It’s worth considering whether, in the future, soft skills will become so vital, they’ll become a requirement for procurement roles. That situation already exists in some professions. Look at Medicine, where aspiring doctors are interviewed for qualities including maturity, communication, the ability to empathise and collaborate. Hugh Laurie’s Dr House, with his acerbic bed-side manner, would in reality never have gained entry into medical school, no matter how brilliant he was.

There’s a school of thought that when it comes to soft skills, you’ve either got it, or you don’t. Soft-skills training, therefore, is ineffective because you can’t change someone’s personality. Personally, I disagree because I’ve witnessed colleagues who have worked hard to develop skills like effective listening. There’ll always be hard cases, but the days of people dismissing these skills as “fluffy” or otherwise useless are over.

Three Alternative Names for Soft Skills

As I wrote at the beginning of this article, it’s nigh-impossible to change a term once it’s in common usage. However, if professional organisations, training providers, and the like, were to phase out the words “soft skills”, and call them something more accurate instead, we might see this phrase begin to disappear.

Here are three suggestions for a more accurate description of “soft” skills.

1. Essential skills: I’ve borrowed this one from ISM CEO Tom Derry, who also isn’t a fan of the term “soft skills”. Tom used the term “essential skills” when launching ISM’s Mastery Model to describe the many interpersonal attributes required on the journey to achieving accreditation.

2. EQ: “Emotional intelligence quotient” is the technical term for soft skills. I like this term simply because it contains the word “emotional”, which pretty much sums up what soft skills entail. Calling it a “quotient”, however, raises the argument that EQ, like IQ, is something you’re born with, and can’t be improved upon.

3. People skills: The simplest, and possibly the most accurate, alternative for soft skills is “people skills”. After all, every one of these skills involves dealing with people, while hard skills can generally be put to use sitting alone at your computer.

If you have other suggestions, or already use a different terminology in your workplace, please add a comment below!

A Futurist, An Economist, A Professor, A Psychologist and a CFO Walk Into A Bar…

A Futurist, An Economist, A Professor, A Psychologist and a CFO Walk Into A Bar…It may sound like the start of a terrible joke, but in fact, this is the stellar line-up of experts featuring in Even Bigger Ideas. And alright, they didn’t  actually walk into a bar, it was more of a podcast series…

Whether you love learning on the go, at your desk, on your lunch break or from the comfort of your own sofa, Even Bigger Ideas is made for you! The series is free for all Procurious members and can be found in the learning section of the site.

Why not spend 15 minutes with each of our procurement power-players as they highlight the trends disrupting business. Here’s what you can expect:

1. Make Sure You Still Have A Job In 2020

Futurist Anders Sorman-Nilsson warns that unless procurement pros act now, there’s a good chance they’ll find themselves unemployed as early as 2020. It’s time to embrace the gig economy, learn to speak the language of digital and invest in our education.

Listen to Anders’ podcast here or read more here

2. The Unpalatable Update On Thinking The Unthinkable

It turns out that thinking the unthinkable in the current climate is becoming a rather unpalatable affair. Nik Gowing, BBC Broadcaster and Visiting Professor at King’s College, explains why leaders must learn to recognise and handle impending unthinkables or risk going out of business.

Listen to Nik’s podcast here or read more here

3. How Do You Know When Your Idea’s Got Legs?

Creating an encouraging environment for intrapreneurs in the biggest organisations can be tough. Rio Tinto CFO, Chris Lynch, offers advice on fostering innovation and some top tips on assessing when an idea has legs. How do you know if it’s worth investing time, and money, into someone’s idea and what can the biggest companies do to encourage and motivate their employees to think big.

Listen to Chris’ podcast here or read more here.

4. Unleash Your Creative Genius In Fifteen Minutes

Innovation is now firmly on the agenda for businesses worldwide. According to Creative Change Agent James Bannerman, there’s no such thing as a lost cause when it comes to unleashing creativity. It’s simply a matter of re-educating ourselves and learning some tips and tricks to unlock our creative potential.

Listen to James’ podcast here or read more here.

5. Trump & Trade: Hope For The Best & Plan For The Worst

Dr Linda Yueh, a renowned economist, broadcaster and Adjunct Professor of Economics for London Business School, discusses how supply managers can prepare for the major shifts in globalisation, trade and protectionism under Trump. With any luck the potential impacts on our global supply chains are over-exaggerated!

Listen to Linda’s’ podcast here or read more here.

Procurement Needs People: How To Nurture Your Top Talent

As the global marketplace changes exponentially, the need for both personal and professional development becomes ever more crucial for procurement pros. Jim Baehr explains why  organisations need to invest in their people.

Category Management. Risk Management. Contract Management. Supplier Relationship Management. All are part of the Supply Management vernacular in 2017. They represent best practices. Those who have mastered these competencies are sought by companies wanting to take their Supply Management to the next level and beyond. Yet, step back and look at the big picture. How many Supply Management professionals have the time, the skill or the support to pursue these best practices?

Applying the 80/20 Rule In Procurement

Continuing to look at the big picture, let’s apply the 80/20 principle to this question. Considering all the spend of all companies – large, medium and small – it’s reasonable to believe that 20 per cent of the professionals in Supply Management are managing 80 per cent of spend. (This number may be even more acute based on benchmarking articles found elsewhere at My Purchasing Center.)

Bigger companies have more spend and are more likely to have invested in their organisation as led by a Chief Procurement Officer. The professionals in these organisations are expected to be proficient in these higher-end responsibilities – the Managements (Category, Contract, Risk, Sourcing, Supplier Relationship, etc.). These professionals can practice and hone their competencies daily. This is a good thing. This means that in many ways the profession has taken the lead set by the Peter Kraljic “Purchasing Must Become Supply Management” article found in the September 1983 issue of the Harvard Business Review.

Flipping the principle would make it logical to believe that 80 per cent of Supply Management professionals are handling 20 per cent of the spend. Here’s the challenging part: It is likely that these are the same professionals who are handling 80 per cent of the purchasing churn – dealing with requisitions, purchase orders out the door, tracking delivery, invoice reconciliation, etc.  The result is they don’t have the same opportunity to apply best practices like their counterparts in bigger companies. Not because they don’t want to. They simply don’t have the time. Or, more frustratingly, the ability. But, seeing the articles and blogs – all the attention given to “the Managements” they want to do the same.

Purchasing Vs Procurement

While the terms Purchasing and Procurement tend to be used interchangeably, there is a big difference; moreover, the responsibilities of a Purchasing and Procurement professional are not the same.

Purchasing is operational, process driven,  ordering, receiving and paying for goods or services. Procurement is more tactical, more purposeful. Procurement calls for establishing requirements, performing market research, evaluating/selecting suppliers, and negotiating contracts or purchase orders. (Yes, POs can be negotiated.)

For the purpose of the remainder of this article Purchasing is used as the title for the group that handles  buying, procurement and, in some cases, sourcing.

It’s understood that technology is automating many of these routine functions. It’s agreed that that the developers of these systems are doing their best to “democratise” the technology – making it available, applicable and affordable to all companies – regardless of size. While the technologies are making inroads, there’s still a long way to go. And, when we get there one of two things will happen – positions will be eliminated or, companies will direct their Purchasing professionals to become more Procurement-like. Hopefully, it will be the latter.

Do we need to wait until technologies and automation address operational needs to free up the time for (paraphrasing Kraljic) Purchasing to become Procurement? The answer is “no.” Good Procurement, efficient and effective,  for the foreseeable future, is a people matter.

Is Purchasing Only About Getting The Lowest Price?

Before offering any recommendations, we first must recognise the realities. Purchasing, in many cases, is still viewed as “getting the lowest price”. This perception impacts relationships internally with business units and externally with suppliers. It creates a misunderstanding of purpose. The Purchasing professional is relegated to coordination of buying activities instead of having the opportunity to collaborate with internal clients, and suppliers, to produce value.

If we go back to the 80/20 rule the negative perceptions of Purchasing are conceivably based on the interaction of internal business groups and suppliers with the 80 per cent group. They are the majority population and they drive a perception that Purchasing “gets in the way” rather than adds value. Again, flipping the numbers, 80 per cent of the expectations for Purchasing come from what senior leadership reads or hears about the state-of-the-art techniques that the (upper) 20 per cent apply to the “Managements.” The result is that many businesses think their Purchasing group is not effective.

Research shows that staff and talent constraints inhibit Purchasing professionals from being all they can be and, more importantly, all they want to be. The abilities of these professionals are, and may continue to be, underdeveloped. But, there is an opportunity to build on what they already know and have experienced. We can reinforce what they know and make them comfortable with the basics and then introduce them to the “Managements.”

Personal and Professional Development Is Crucial- So What’s The Solution?

As Purchasing becomes more sophisticated, as business becomes more demanding and as the global marketplace changes exponentially, the need for both personal and professional development becomes proportionately as important. Let’s accept that not all the next generation of Purchasing professionals will come with MBAs from universities with Supply Management programs.-

So, now that the problem has been stated, what’s the solution? Keeping it simple – consider the following:

  • Recognize that the 80 per cent is underdeveloped but able and wants to do more.
  • Accept that this same 80 per cent  is under-appreciated and underserved.
  • Acknowledge that talent management requires talent development.
  • Commit. Business leadership, as well as professional associations, must step up and do more for the 80 per cent.
  • Invest in developing the 80 per cent as the cost pales, in comparison, to the potential return in value.

Here’s the good news: There are companies that already recognise this need. They are making the commitment to invest in their people. But, there must be more – many more. Quoting Eleanor Roosevelt – “Nothing has been achieved by the person who says, ‘It can’t be done.’”

Jim Baehr is the Lead for the Sourcing Strategies Group LLC (SSG).  Currently he is the President of the ISM – Pittsburgh Affiliate, a member of the Board of Governors of the Joint Chemical Group of Pittsburgh and a member of the Visionary Council of Coupa Software Incorporated based in San Mateo, Calif. This article was first published on My Purchasing Center

Tender Of The Year? Bidding Opens For US-Mexican Border Wall

Tuesday 4th April marks the deadline for companies to submit papers detailing their proposals to build the Trump Administration’s “big, beautiful, powerful” Mexican border wall. But will the massive construction project ever win the funding it needs?

US Customs and Border Protection has issued two 130-page RFPs, offering a glimpse into the Trump Administration’s vision for the 2,000km barrier designed to stop illegal immigration and cut off drug-smuggling routes. More than 1,100 kilometres of the border has already been fenced, but the existing walls are nowhere near as imposing as those detailed in the RFPs.

The RFPs indicate a massive construction project, with specifications including:

  • A 9-meter-high reinforced concrete barrier, extending 2 meters underground to prevent tunnelling.
  • A similar barrier made from durable, see-through material.
  • The wall must be “cost-effective to build and repair”.
  • The barrier must be “physically imposing” and capable of resisting almost any attack by “sledgehammer, car jack, pickaxe, chisel, battery-operated impact tools, battery-operated cutting tools [or] oxy/acetylene torch for a minimum of one hour.”
  • At the same time, the wall must be “aesthetically pleasing”, reflecting Trump’s campaign promise of a “beautiful wall”. Reports note that this requirement only applies to the North-facing side of the wall.
  • Features to prevent anyone from scaling the barrier or attaching grappling hooks to its summit.
  • Incorporation of electronically controlled gates for vehicles and pedestrians.

Customs and Border Protection intends to award multiple contracts based on responses to its request statement. The selection process begins with an initial elimination round, after which the contestants will submit more detailed technical proposals. After a second round of eliminations, finalists will gather in San Diego, California to construct a small-scale “mock-up” of their wall design. Sledgehammer-wielding government representatives will then “test and evaluate the anti-destruct characteristics” of the designs before awarding contracts.

What will the wall cost?

During his presidential campaign, Trump estimated that construction would cost $12 billion, citing his personal involvement as a factor in driving costs down. Republican House Speaker Paul Ryan has estimated $15 billion, while a US Department of Homeland Security internal report indicated the wall would cost as much as $21.6 billion and take over three years to build. A preliminary version of the president’s budget for fiscal 2018, beginning in October, includes $2.6 billion for the first phase of construction.

While the RFPs appear to require a highly-visible and physically imposing barrier, some companies have proposed hi-tech solutions to border security that could provide a 90% saving to the government. Examples include having two chain-link fences with a “no man’s land” in between and intrusion detection systems in place. Other invisible or “virtual” wall proposals would use AI software to analyse satellite and surveillance imagery and alert border guards to area where activity is detected.

An alternative idea for a physical barrier put forward by a Florida architecture firm is to use shipping containers as the building blocks for the wall. This could be a cost-effective and sustainable solution, particularly as the U.S. has a surplus of shipping containers due to the slowdown in global commerce.

Will the Mexican border wall ever be funded?

While Donald Trump famously promised his voters that “Mexico will pay” for the border wall, the Mexican Government has repeatedly stated that it would not do so. The Trump administration is yet to reveal how it would compel Mexico to pay. The budget request for $2.6 billion to begin construction was seized upon last week by Graco Ramirez, the leader of Mexico’s national governors’ association, who claimed this proves that U.S. taxpayers will foot the entire bill.

The proposal is likely to face fierce opposition in Congress, where Democrats and fiscally-conservative Republicans are expected to block expenditure on this scale, particularly if estimates blow out to $21.6 billion.

Who will build it?

Ironically, although Trump may be unable to make Mexico pay for the wall, he could end up paying Mexican businesses to do the work. A report by Quartz found that “of the roughly 700 firms that have expressed interest in building prototypes for the wall, about 10% are Hispanic-owned” or based in Mexico. However, the Mexican government has warned Mexican businesses that it would “not be in their best interests” to participate in the construction of the wall, while the Catholic archdiocese of Mexico issued an opinion that participating would be “immoral” and those involved “should be considered traitors to the homeland”. The considerable political pressure notably caused Mexico’s largest cement firm, Cemex, to announce that it would not be providing quotes for the vast amount of cement the project would require.

As far as U.S. construction firms go, few of the large, multinational corporations that would actually have the capacity to carry out the $21 billion project have indicated interest, presumably due to public opposition to the wall and the difficult path through Congress to funding it. Meanwhile, state representatives and lawmakers are putting in place boycott measures such as California’s “Resist the Wall Act”, essentially a divestment campaign to ensure no Californian money goes towards building the wall.

In other news procurement news this week…

Shocking lack of digital transformation strategies in procurement organisations

  • The Hackett Group’s 2017 Procurement Key Issues research has discovered that nearly 85% of procurement organisations believe digital transformation will fundamentally change the way they deliver services over the next 3-5 years.
  • Despite this, only 32% currently have a formal digital strategy in place, and only 25% have the resources and competencies in place to meet the digital transformation challenge.
  • The research gathered data from executives across 180+ large companies globally, with an annual revenue of $1 billion or greater. Areas expected to grow most dramatically are the use of cloud-based applications, advanced analytics, cognitive computing and robotic process automation.

U.S. Treasury Secretary Steven Mnuchin says robot job displacement “50 to 100” years away

  • In an interview with Axios last week, Mnuchin said the concern about artificial intelligence taking over human jobs is “not even on our radar screen”. When pressed, Mnuchin estimated that concern might be warranted in “50 to 100 more years”.
  • This estimate is significantly out of touch with machine learning experts, who are increasingly vocal about the imminent “national emergency” that will see up to 50% of jobs at risk due to advances in automation.
  • Mnuchin’s apparent disinterest in the AI jobs crisis could be due to an inability to “think the unthinkable” – a phenomenon introduced by Professor Nik Gowing at Procurious’ Big Ideas Summit. It may also reflect Mnuchin’s falling into line with politicised assertions that foreign workers and cheap pay, rather than automation, are responsible for job losses in former factory towns over the past decade.

Read more at Business Insider.

U.K.’s Crown Commercial Service slammed by Public Accounts Committee

  • The U.K.’s Crown Commercial Service (CSS) was set up in 2014 to centralise all purchasing, eliminate duplicate and act as a single entity for central government procurement. It replaced the Government Procurement Service and was expected to manage £13 billion spend across 17 departments.
  • However, a recent report by the Public Accounts Committee (PAC) found that the CCS has only managed £2.5 billion spend across 7 departments, with PAC Chair Meg Hillier calling the results “a dismal showing that calls into questions exactly how willing government departments are to accept the authority of the Cabinet Office in this area”.
  • A CCS spokesperson has responded to the report, saying: “”With an experienced senior leadership team now in place, we are confident in our ability to deliver even greater value for the taxpayer moving forwards through the centralised procurement of common goods and services.”

Read more at Computer Weekly.