All posts by Procurious HQ

Adapt and Thrive – Success in Cross-Cultural Negotiations

Adapt and survive is often a key strategy in business. It turns out that it’s just as important in cross-cultural negotiations too.

Adapt and Survive

In our previous articles on cross-cultural negotiations, we had heard what our experts had to say about preparing for cross-cultural negotiations, and the importance of building relationships before negotiations even start.

In the final article in this series, we hear from our experts on how to adapt for negotiations, and how best to handle negotiations with people from their own nationalities.

Preparing for a negotiation – Middle Eastern Challenges

More and more companies are heading to the Middle East as part of their primary business and supply strategies.

However, the cultural differences between Europe and, in particular, Saudi Arabia are stark. Getting to grips with these differences is key to creating good business relationships, and having successful negotiations in the region.

The Roundtable were asked for their thoughts on how to prepare for a first cross-cultural negotiation in Saudi Arabia. They shared what information they would aim to collect, and how they would collect it.

One key element mentioned was to understand the hierarchy and power dynamics of the organisation. Thierry Blomet talked about needing to understand how the organisation is mapped out, and how it fits with the various stakeholders in the country. As Saudi Arabia has a very different, rule-driven, culture, it’s important to understand the dynamics of the organisation and the people.

This view was echoed by Jonathan Hatfield, who added that it’s important to have diversity in your own teams, to help prepare for going into different geographies. The more diversity in your team, the better prepared you are for the global market.

The conversation then turned towards how individuals could better adapt to different cultures by being more aware of their own behaviours, and how to change behaviours to be in line with local customs.

The importance of “cultural mirroring” was put forward by Carine Kaldalian, in particular regarding dress code especially when dealing with a country with strong rules like Saudi Arabia.

Giuseppe highlighted the importance of knowing some etiquette elements that may offend the other party, like which hand to use to hand over your passport, and not showing the soles of your feet to others.

Adapt Your Behaviour

In the modern, digital world, collecting information on other cultures is far easier than it was in the past. Ali Atasoy suggested using both two common websites as prime source of information.

First Wikipedia, to understand the country, social conventions, and recent history. Then LinkedIn, to understand the individuals you would be meeting and have some ‘icebreakers’ prepared.

However, once the information has been collected, it needs to be put to good and effective use. The extent to which individuals should adapt their own behaviour was subject to some debate.

Bérénice Bessiere argued that Europeans frequently underestimate the capacity of Asian business people to adapt to European culture. The common thinking is that it’s them who will have to adapt their behaviour.

The importance of avoiding stereotypes was raised again by both Matthias Manegold and Jonathan Hatfield. Both highlighted the potential mistake in thinking that all the people in a single culture will be the same.

The different norms of different generations, and the constant evolution of cultures, mean generalisation should be avoided. However, by being aware of this, adapting behaviour and building up trust, you will create a better relationship, and any hiccups will likely be forgiven.

Negotiating with Nationalities

The final part of the Roundtable discussion focused on the participants’ views on the key advice for negotiating with people from their own countries.

It was a lighthearted way to end the discussion, but the points raised were both interesting, and highly applicable.

  • Turkey (Ali Atasoy)

Be prepared to explain why you have chosen to do business with this supplier. Any uncertainty, or lack of a valid reason, may lead to the supplier being offended by the approach.

  • Switzerland (Stéphane Guelat)

Punctuality is a huge thing, so be on time. Also, negotiations will frequently focus on product, quality, and other factors. Price is unlikely to be a key focus.

  • United Kingdom (Jonathan Hatfield)

Don’t arrive at the negotiations and be very aggressive, because you will lose your audience. Also don’t assume that you will become a business ‘partner’ immediately – this is something that has to be earned.

  • Lebanon (Carine Kaldalian)

If they have the upper hand, expect the other party to be late. It’s all part of the power play in the negotiations. Expect to be invited to dinner, even before a tough negotiation. The social side of business is very important in Lebanon.

Also, expect some heavy bargaining, as Lebanese are natural born traders.

  • Germany (Matthias Manegold)

Be on time, be credible, and be trusted by the other party. You need to demonstrate that you are interested in the other party’s well-being and outcomes, not just your own.

Small talk is unlikely. Germans will only ask “how are you?” if they are interested. It’s not a throw-away line, like in the UK or the USA. You must walk the talk – doing what you say you will is very important.

  • China (Xin-jian Carlier Fu)

A smile doesn’t necessarily mean that they agree with you, they might just not want to let you down. Don’t make assumptions about the deal or how the other party is feeling about it.

Also, don’t over talk. Know that the other party is listening, but maybe are just looking for the right way to respond.

Beach vs. Coconut

The final comment fell to our facilitator Giuseppe, who showcased the difference between the peach culture and coconut culture. A beach culture, often associated with Americans, is easy to get into, but difficult to in-depth, while a coconut culture, often associated with Germans, is hard to get into, but once you are in it is worth the effort!

And with that, the Roundtable was complete. It provided a fascinating insight into cross-cultural negotiations, cultural diversity, and how procurement professionals can best prepare themselves for cross-cultural interactions.

If you want to find out more, you can get in touch with Procurious, or with Giuseppe Conti at Conti Advanced Business Learning.

This roundtable was organised by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specialises in Negotiation & Influencing training. Giuseppe Conti, has over 20 years of Procurement experience and 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

Investor Confidence & Debt – A Study in Trans-Atlantic Contrasts

It’s a time of contrasting fortunes for trans-Atlantic businesses, as high investor confidence is matched by high debt.

Investor Confidence

Trans-atlantic businesses are always going to see some contrasting fortunes, given the diverse nature of the market environments. However, two new reports published this week suggest that these contrasting fortunes may have more impact than usual.

Despite a period of ongoing uncertainty in the UK, a new study has shown that investor confidence in UK SMEs remains high. Over 50 per cent of UK investors have stated they will support SMEs through private investment, even as confidence drops in shares, bonds and property.

However, in the US, another report suggests that companies are failing to maximise favourable conditions to lower their debt levels. A lack of improvement in supplier payments, and inventory management, has left overall working capital performance at its lowest level since 2008.

UK SME Investor Confidence

Despite the uncertainty surrounding financial markets and a variety of investment products, the majority of British investors are resoundingly confident in the country’s SMEs as an investment vehicle.

The research was commissioned by private equity house, IW Capital, and crowdfunding specialist Crowdfinders, and surveyed 1,000 UK investors. The survey revealed that over half (52 per cent) of investors said they would support the UK’s small and medium-sized enterprises through private investment channels in the wake of the referendum vote.

This equates to over 12.9 million potential investors for UK SMEs, and comes at a time where investor confidence in traditional assets, such as shares, Government bonds, and property, has dropped significantly.

The Lloyds Bank Investor Sentiment Index has helped to demonstrate the impact of the post-Brexit economic climate on investor confidence levels across the UK.

In mid-July 2016, the Index fell to its lowest level since it was launched in March 2013. Property (down by 35.3 per cent), government bonds (down 15.5 per cent) and UK shares (down 21.7 per cent) all experienced notable declines in investor sentiment.

Young Investors on the Rise

Encouragingly, 70 per cent of the younger age bracket of investors – 18-34 year olds – said they will consider investing in SMEs post Brexit.

Furthermore, the highest proportion of investors in a regional comparison who would back SMEs post Brexit was based in London. A significant 68 per cent of investors in the capital said they would support small businesses through private investment.

Luke Davis, CEO of IW Capital and Co-founder of Crowdfinders, commented on the report’s findings. “Following Brexit, Britain has been in a state of limbo, with consumers and investors unsure how the economic landscape will change over the coming months and years.

“What we can take from this research is that there is a silver lining from a business perspective as our nation’s investors are willing to support SMEs in the wake of Brexit, something that cannot be said for other investment classes.

“In times of economic uncertainty, ensuring support for the nation’s private sector – particularly the SMEs who make up 99.9% of all private businesses – is of paramount importance.”

US Companies Taking on Debt

Across the Atlantic, the situation was less positive. According to a survey from REL, a division of The Hackett Group, large US companies have increased debt levels, rather than improve working capital performance.

The survey looks at the performance of 1,000 of the largest public companies in the U.S. during 2015. It saw corporate debt rising significantly for the seventh consecutive year, as a result of low interest rates. Debt was up 9.3 per cent in 2015, the equivalent of $413 billion.

Since 2009, the total debt position of the companies in the survey has increased by over 58 per cent.

Working capital performance worsened, with a deterioration of 2.4 days or 7 percent in Cash Conversion Cycle (CCC). It is now at 35.6 days, the worst since before the 2008 financial crisis. These figures suggest major inefficiencies in managing their collections, payables, and inventory processes.

The working capital improvement opportunity of companies in the survey now stands at over $1 trillion, or 6 percent of the U.S. GDP. However, this can only be achieved by the companies equalling the performance of industry leaders.

Oil and Gas Performance 

A significant factor in this year’s overall results were the continuing low oil prices. This caused oil and gas companies to increase reserves, dramatically worsening both inventory and overall working capital performance, and dragging down the performance of the entire survey group.

Commenting on the results, Hackett Group Senior Director Craig Bailey stated, “Once again, low interest rates gave companies a perfect excuse to ignore the hard work of optimising receivables, payables, and inventory. This leaves over a trillion dollars unnecessarily tied up in operations. Instead of doing the hard work of transformation, most simply leveraged their future with more loans.”

Hackett Group Director, Ben Michael, added, “Eventually, interest rates will rise again, and there are signs this may happen soon. Then many companies may find themselves in dire straits, after seven years of growing debt and worsening working capital performance. Smart companies are getting out ahead of the curve now, and starting making the changes they need to squeeze unnecessary cash out of these key areas.”

You can access the full report, and results analysis, plus findings for European companies, on The Hackett Group website.

Want to have your say on these reports? Let us know your thoughts on these two surveys by commenting below. 

Away from the world of investor confidence and company debt, we’ve tracked down the key headlines in the procurement world.

NATO IT Division to “Splurge” on Defence Procurement
  • NATO’s Communication and Information Agency (NCI) has announced it will award €3 billion (US$3.3 billion) worth of cyber, air and missile defence contracts.
  • This is the first time since 2009 that NATO has increased expenditure. 
  • Proposals include a €2.5 billion satellite communications contract, advanced software procurement, and further strengthening of NATO’s air defences.
  • The spending increase comes at a time of scrutiny into NATO finances.

Read more at The Register

Nuclear Supply Chain Collaboration
  • Nuclear supply chain organisations from the US and Canada have signed a memorandum of understanding on cooperation this week.
  • The MoU will help to facilitate collaboration and innovation among nuclear suppliers and research organisations in both countries.
  • Focus areas include the development and deployment of advanced reactors and small modular reactors, job-creation and combating climate change.
  • The agreement comes ahead  of the major annual summit for utilities procurement professionals, who are due to gather in September for ISM’s UPMG2016 conference.

Read more at World Nuclear News

Aerospace Supply Chains Under Pressure
  • Boeing and Airbus supply chains were in the spotlight at the Farnborough air show, as pressure grows on both companies to deliver record numbers of aircraft.
  • This is putting increased pressure on already stretched suppliers, and is leading to concerns about supplier treatment.
  • Suppliers are expected to sign long-term supply agreements, promising both regular price reductions, and accepting unlimited liability should something go wrong, or face losing business.
  • It also comes at a time when Boeing have started delaying payments to some suppliers by up to a month.

Read more at the Financial Times

New UK Nuclear Power Plant in Doubt
  • A project to build a new nuclear reactor at Hinkley Point has been put on hold by the UK Government.
  • Despite EDF directors voting to proceed, the Government has delayed a decision until a further review in the Autumn.
  • The project cost is estimated at £18 billion, but could rise to £30 billion when further subsidies are paid.
  • Much of the debate centres on the guaranteed price for electricity produced by the plant being over double of current electricity prices.

Read more at The Guardian

Big Ideas Summit 2016: Big Idea #7 – Disrupting Linear Thinking

Alex Kleiner says that procurement organisations need to throw off their linear thinking to increase flexibility and collaboration.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Alex Kleiner, General Manager, EMEA at Coupa Software, says that organisations as a whole need to throw off their linear thinking and increase flexibility and fluidity.

This transition will allow organisations to eliminate barriers to collaboration, but also enable procurement to focus more on alternatives to savings, such as usability, people, or even lives saved!

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,500 like-minded procurement professionals from across the world.

Read All About It! Procurious Pioneering Conversations in the News

Wherever you look, procurement is in the news. And Procurious is helping to drive this by pioneering conversations in the media. So come, read all about it!

In the News

Here at Procurious, our goal is always to help our community advance. We do this by sharing effective strategies and fresh insights on the latest hot button news, trends, and events shaping the procurement and supply chain profession.

Of course, we do so daily on our platform. But we’re also working to really extend our value in the news media by sharing information that procurement needs on a day-to-day basis.

All this helps to grow awareness of not only the Procurious community, but also the procurement profession as a whole. We don’t want to limit ourselves to just talking procurement. We want people to know the procurement perspective on all the major events happening around the world now.

Here are just some of the topics our founder Tania Seary, and the Procurious team, have been commenting on recently.

Showing the Value of Your Profession

As the conversation around procurement grows online, and CPOs increasingly command a seat in the boardroom, it’s more important than ever for procurement professionals to be bold and share information that demonstrates the value that procurement brings to an organisation.

That could be something as simple as using positive words and imagery in discussions online. Or as complex as a CPO defining value metrics around a key business issue. These conversations can help draw a direct, positive link between what procurement are doing, and what the C-suite is concerned about.

Having the Courage to Drive Global Change

The procurement profession is being challenged to recalibrate its thinking and skills around new realities facing our world.

To add the most value to their organisations, leaders must be agile enough to handle unexpected global events like Brexit; master futuristic technology such as cognitive procurement; turn innovations like 3-D printing into business opportunities, and more.

Today’s procurement professionals must be willing to take new risks to tackle these challenges together. This can happen through social collaboration and online conversations with their teams and stakeholders. None of us can go it alone! By tapping into the broader procurement community, we can summon the courage we need to drive global change.

Winning the War for Talent

The supply chain has grown increasingly complex and global. With this comes more demand for workers who have greater technical skills to tackle these changes head on.

Procurement needs professionals who can specialise in one area, but also understand the broader businesses issues and can have conversations with stakeholders.

The true test for organisations is ultimately attracting those individuals, which comes down to having a responsive and engaging presence on social media.

Stay Tuned for More News!

As a profession, we need to stay dedicated to educating people outside of our community on what procurement is all about.

Stay tuned for additional “New and Noteworthy” blogs to hear more about some of the hot news topics and conversations we’re having, to help our profession and community thrive in this changing world.

Throwback Thursday – Is Your Personal Brand Picture Perfect?

Why do you need to keep your personal brand on social media up to scratch? Well, if you don’t your dream job might just pass you by.

Personal Brand

We’re looking back at some of Procurious’ most popular content from the past 12 months. Prompted by some discussions around Procurious HQ on social media profiles, we felt it was a good time to revisit this personal brand article from our founder, Tania Seary.

Your Personal Brand

Today, a staggering 90 per cent of UK employers use social media to find employees. As we all know, a large proportion of roles are never formally advertised, with employers preferring to rely on references and people they “know” to fill important roles.

An important secret you need to know from the recruitment industry is about ‘passive’ candidates. These are people who are not actually applying for jobs, but are seemingly happily engaged in their current roles, as opposed to those who have actively applied for the role. These passive candidates are actually the most valued candidates.

So, the question is how will these silent employers “know” you, if you aren’t out networking, connecting and promoting yourself on social media?

The Importance of Networking

I had the perfect example just this week when a headhunter called me for some recommendations for the Head of a Digital Procurement Marketplace. It was a very senior job, paying in the high $200,000s.

I have worked in this profession for more than 15 years and am very committed to networking. I am fortunate to have met thousands of procurement professionals, have more than 5,000 connections on LinkedIn, and am an active participant in the 16,000 strong Procurious community.

Now, when I was asked for recommendations, who do you think came to mind first? Someone I met ten years ago when eMarketplaces were all the rage? Or someone I saw sharing information on LinkedIn or Procurious earlier in the day? The latter, of course.

In order to help you understand the importance of your network and online profile in helping you get that next job, let me share how my mind worked when trying to think of some suitable candidates.

Standing Out

I started thinking through the thousands of events and meetings I had attended and personalities that had stood out – I came up with a few names.

Next, I started reviewing my online social networks. First I found people who had the right skill set and experience, then I started looking at people’s profiles in depth. This was quite a lengthy process, so I used some filters. This is who didn’t make the list:

  • Profiles with photos.
  • People with limited connections (sorry, to me, its hard to think how anyone in procurement could have fewer than 500+ connections).
  • Profiles with out of date or limited work.
  • People who, when I googled them, weren’t mentioned anywhere, hadn’t published anything, or spoken at an event.

If people met any of these filters, I wasn’t going to recommend them. I would imagine many other senior people like me would use the same process. I know recruiters definitely would…

Why? Because my personal brand is on the line when I recommend someone. I only want to recommend people who are “in the loop” and up to date with what is happening in the world. And those are the people who are building and using their networks.

‘Picture Perfect’ Personal Brand

For this reason, all your work history, successes and contact details are important to include on your social media profile. But I want to particularly stress the importance of an impressive profile picture.

Our mission at Procurious is to change the face of procurement. So many images of procurement out there today reinforce a very old, brown cardigan-clad image. We want to replace those images with fresh, global images of being “the smartest guys in the room”.

Make sure your headshot is just that, a headshot where people can clearly identify you as you. Make sure your attire and demeanour are professional and represent how you would look turning up for a job interview.

There should be no selfies, no wedding photos, no hazy screens, favourite cars, or children. You laugh, but we see a lot of crazy things on Procurious, which is why I’m making this point.

Take care to be consistent across your social media profiles. You want to be recognisable from network to network. You definitely don’t want two photos which look as though they have been taken a decade apart. Consistency sends a message that you are taking an interest in your personal brand.

Personally, I think of a shot of you speaking or in action in a professional setting can be powerful to promote you as a thought leader. These are tough photos to get, so a plain vanilla corporate headshot will also serve you well. Using the same photo across all social media can be powerful as your ‘personal brand’ is consistent and is reinforced each time someone sees you.

After all, a picture is worth a thousand words.

Plants (Nuclear) and Treehouses – Growing Procurement at UPMG2016

With an eclectic agenda ranging from a keynote on nuclear energy, to a discourse on treehouses, UPMG2016 is shaping up to be a highly informative conference.

Treehouses UPMG2016

The 85th Annual Utility Purchasing Management Group (ISM UPMG) is just on the horizon. The conference has grown significantly in the past decade, and has come to be recognised as one of the premier educational events within the utility supply chain industry.

As ever, the agenda is an eclectic mix of topics. As well as some fascinating sounding keynotes on nuclear power and treehouses, attendees will be discussing issues from sustainability to leadership, politics to human behaviour.

Here’s a small taste of the line-up in store at UPMG2016.

Industry Trends and Nuclear Delivery

Much like ISM’s annual conference, it’s not all about procurement and supply chain. There are plenty utilities-specific sessions to visit.

  • Power Industry

An important session, and one of the main reasons the UPMG conference exists. This session will cover industry trends and how they will affect power industry spending and resource demands over the next 12 to 24 months.

Britt Burt from Industrial Info Resources will also explore spending within industry segments for gas, coal, nuclear, and renewable generation, along with transmission and distribution projects.

  • Human Side of Power Generation

Similarly, this session will look at the human side of power generation. Experts from Associated Builders and Contractors, Alabama Power Project, and TVA, will explore the demand outlook for skilled craft labour supporting the US Power generation fleet.

This will include the cyclic demands of outage seasons, and the unique solutions utilities, contractors and labour are putting in place to meet peak requirements.

  • Delivering the Nuclear Promise

Anthony R. Pietrangelo, Senior Vice President and Chief Nuclear Officer of the Nuclear Energy Institute, will present a session on how the industry is advancing safety, and its reliability and economic performance.

Pietrangelo will also speak about the key role nuclear power has to play in environmental sustainability.

Essential Knowledge and Skills

Sessions that cover essential knowledge and skills relevant to the wider profession include discussions on:

  • mergers and acquisitions
  • inventory analytics
  • the changing source-to-pay technology landscape
  • vendor rationalisation
  • leveraging data
  • best-practice contracting and channel strategies.

Presenting organisations include Oniqua, SAP Ariba, IBM, PwC and leading utilities providers.

Leadership & Treehouses

Alongside the industry and sector specific keynotes, there are a few others that are sure to capture attention.

  • “The Treehouse Guy”

“The Treehouse Guy” Pete Nelson is the star of Animal Planet’s ‘Treehouse Masters’. With a reputation for limitless imagination and incomparable skills, Nelson is known as the best treehouse builder in the world. He lives by the inspirational motto “if you dream it, you can build it”.

  • The Science of Leadership

Huffington Post columnist Vanessa Van Edwards is the lead investigator at Science of People, a human behaviour research lab. Her session, “The Science of Leadership”, delves into the latest neuroscience, behavioural economics and phycology research to uncover whether leaders are born or made.

  • Political Climate – Campaign ’16

Hawthorn Group Chairman and CEO, John Ashford, will give a veteran political insider’s look at the 2016 US election campaigns and victory prospects in the race for President, Senate, House and Governor.

Build Your Network

As every conference-going procurement professional knows, one of the most exciting aspects these events is the opportunity to build your network.

Attendees will rub shoulders with colleagues, industry experts, thought-leaders and suppliers on the golf course, in Nashville’s bars and restaurants, and at the conference itself. 

Are you planning to attend UPMG2016? The Procurious community would love to hear from you after the conference about your key takeaways from the event.

The Utility Purchasing Management Group’s 2016 conference will be held in Nashville from 11th – 13th September. You can register here.

Beyond Stereotypes – Building Cross-Cultural Relationships

Don’t assume everyone in the same culture has the same norms. Getting beyond cultural stereotypes, and seeing the individual, is key to good cross-cultural negotiation preparation.

Stereotypes

In our previous article, we kicked off our recap of, and insight into, the intricacies of cross-cultural negotiations.

In the second part of the series, our negotiation experts discuss cultural dimensions literature, the importance of moving beyond stereotypes, and why time should always be on your mind.

Hofstede’s Cultural Dimensions

The participants were asked to reflect on the landmark research on cross-cultural negotiations of Geert Hofstede. Hofstede identified six key cultural dimensions, which would vary from culture to culture, that all need to be considered as part of negotiation preparation.

These are:

  • Individualist vs. collectivistic
  • Power distance (i.e. egalitarian or hierarchical)
  • Masculinity or femininity (focus on task vs. relationship)
  • Uncertainty avoidance (related to taking risk)
  • Long term vs short term orientation
  • Indulgence vs. severity (the attitude toward enjoying life and having fun).

Each culture will approach these dimensions differently, taking a spot on a sliding scale between the two extremes. Knowing where cultures sit can be a huge assistance when going into cross-cultural negotiations.

Understanding Cultural Differences

Three of the Roundtable participants discussed their experiences in negotiations when taking these dimensions into consideration. Bérénice Bessiere, Director, Procurement and Travel Division at World Intellectual Property Organization, discussed the different approaches to gender between European and Chinese companies.

Bérénice visited China to lead a negotiation. Although she was the senior buyer, she was assumed to be junior to her younger, male colleague. During the trip, it became clear that the supplier treated its female employees in a way that wouldn’t be acceptable in Europe.

The supplier didn’t win the business in the end (although for reasons other than this). Bérénice admitted she had wondered how the relationship would have worked if they had.

Another example was offered by Xin-jian Carlier Fu, Strategic Sourcing Commodity Manager at Honeywell. She highlighted the cultural differences between Chinese and Americans in business negotiations.

While many Chinese organisations operated with a very traditional, reserved culture, the Americans projected a very over-confident, talkative image in negotiations. Such was the difference to how business was conducted in China that it actually worked as a negative in negotiations between the two groups.

Finally, Carina Kaldalian, External Supply Governance Specialist at Merck, shared her experience based on her own cultural differences. In her home country of Lebanon, being an hour late to a social event is entirely acceptable.

So when Carina arrived for her first social meeting in Switzerland 10 minutes late, she thought she was doing ok. However, it was seen as unacceptable by the people she was meeting with.

This helped her make changes to her own behaviour, while giving her a better understanding of punctuality in different cultures.

Going Beyond Stereotypes

Giuseppe Conti made the point that cultural averages and stereotypes don’t necessarily apply to all individuals. Individual culture is instead influenced by a number of factors including work experience, upbringing, family values, and education, amongst other things.

When negotiating in a cross-cultural situation, it’s important to get past stereotypes, and uncover specific traits of the individuals you are dealing with.

The participants had a number of ways that this could be done. Thierry Blomet, Senior Vice President at Kemira, suggested an informal discussion over dinner the day before the negotiation. This would allow people to avoid entering negotiations without having ever met the other party before.

Other participants highlighted the importance of building relationships, and getting to know the other party better. This was especially important when dealing with Asian counterparts.

Other good strategies were identified as building information through local agents, creating an emotional connection, and building trust in the early stages. With high value placed against trust by many cultures, it’s key to get it right. Participants even highlighted instances where contracts had been signed on the basis of trust alone.

All Down to Timing
Laurence Perot
Laurence Perot

Time was also a factor mentioned by the Roundtable. Laurence Pérot, Director of Global & Strategic Sourcing at Logitech, recommended planning for time, as it’s likely to be treated differently in different cultures.

Laurence recommended planning for more time than you think you will need. This will help ensure you have good conversations, and get what you need. It will also help to show the other party that you’re not just rushing to close the deal.

However, there were also warnings that suppliers might try to use time to their advantage. Ali Atasoy, CMO Operations Manager (Intercontinental) at Merck, stated that the other party may be deliberately slowing the negotiation down, as efficiency may not be at the top of their agenda. He advised patience in this situation, helped by knowing that there were no major time limitations for your negotiations.

Finally, the reputation of an organisation was also highlighted. Matthias Manegold, Head of Procurement and Supply Chain Practice at Kinetic Consulting, advised that procurement professionals need to be consistent in their negotiations, and make sure the other party feels good about the outcomes.

Outcomes will drive what people say about you, and negative comments could harm your reputation with the wider supply base.

In the final article in this series, we’ll look at discussions on how individuals can adapt their behaviours based on information that is gathered, as well as the experts’ advice on how to negotiate with people of their own nationality.

This roundtable was organised by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specialises in Negotiation & Influencing training. Giuseppe Conti, has over 20 years of Procurement experience and 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

Celebrating Supply Chain – The Organisation’s Unsung Hero

It exists in the background. When it works seamlessly, you wouldn’t know it was there at all. But the supply chain really is the unsung hero of the organisation.

Unsung Hero

Alice Catherine Evans. Dr. Megan Coffee. Gunner the Dog. Rick Rescorla. Heard of any of these individuals? They are just some of the unsung heroes from the past 150 years. They have all made a huge difference to the world, and arguably deserve much more recognition.

While maybe not at the same level, the same could be said for the organisational supply chain. It exists in the background. If it works seamlessly, then people don’t really take any notice of it. But, without it, organisations would grind to a halt. It really is the unsung hero of an organisation (as are all the people working in it!).

This week, supply chains have been in the news for the right reasons. The US Aerospace and Defence Industry and Domino’s Pizza were just a couple of organisations to highlight the good work their supply chains were doing.

However, it wasn’t all good news, as supply chains came under fire again for not doing enough to combat modern slavery.

SMEs the Unsung Hero for A&D

The Farnborough International Airshow, held in the past week, presents a fantastic opportunity of organisations further down the supply chain to present their new technologies and ideas. This year it also allowed the US A&D Industry the chance to celebrate its SMEs.

According to data from the Aerospace Industries Association (AIA), the US A&D Industry has exports totalling $142 billion last year. Of that, the supply chain generated 58 per cent of the exports, a whopping $78 billion.

The numbers go to show the strength of the supply chain companies, as well as the global partnerships they have built across the world. The importance of the supply chain SMEs is clear to the US A&D industry too. They have led the way in building a solid reputation of US technology and innovation across tens of thousands of projects worldwide.

AIA CEO David Melcher also sees a bright future of the SMEs. With trade agreements in place, Melcher argued that “small- and medium-sized companies can generate exports for decades more to keep this equipment operating effectively and efficiently.”

Supply Chain Success

Another unsung hero, at least until this week, was the supply chain for Domino’s pizza. The fast-food giant announced a 12 per cent increase in sales in the second quarter of 2016, beating profit and revenue forecasts.

The company attributed increased supply chain sales, including increased volumes and store growth, as a key reason for this. The supply chain sales themselves also saw a 12 per cent increase in the quarter.

Heroes Required

However, the week wouldn’t be complete without stories of what organisations need to do to combat slavery in their supply chains. A report released this week showed that the ICT industry has plenty to do in this area.

KnowTheChain compared 20 ICT companies, including Apple, HP and Samsung, on their supply chain practices. The results were not pretty, with the majority of the organisations scoring under 50 (out of 100) for efforts to eradicate forced labour, and how transparent their efforts were in doing this.

However, according to a business leader in the cosmetics industry, eradicating forced labour and slavery completely is an on-going battle. Simon Constantine, of British retailer Lush, stated that even though Lush is willing to pay more for ethically sourced goods, the company has still struggled to keep up.

Constantine said, “With the amount of work you need to do to stay on top of things, and everything changing so rapidly…I would never be comfortable saying our supply chain is 100 per cent clean.”

But with new regulations increasingly putting the onus on companies to ensure their supply chains are clean, it’s a battle that is set to be fought just as hard as ever.

Is your supply chain an unsung hero? Why not let us know and we can help you tell your story?

We’ve been pouring over the news and digital media to make sure you don’t miss the key headlines this week…

Brexit Causes “Dramatic Deterioration” in UK Economy
  • The decision by UK voters to leave the EU has led to a “dramatic deterioration” in economic activity in Britain.
  • Markit’s Purchasing Managers Index shows a fall in economic output to 47.7 in July, the lowest since the end of the Global Financial Crisis.
  • Both manufacturing and service sectors saw a decline, though exports were up due to the weakening pound.
  • Chris Williamson, Chief Economist at IHS Markit, said the downturn has been “most commonly attributed in one way or another to ‘Brexit’.”

Read more at The BBC

Turkish Procurement Programme Delays
  • The failed coup attempt to overthrow the national Government in Turkey will delay multi-billion dollar procurement programmes.
  • Members of the coup took senior army officials hostage last weekend, with their actions leading to over 200 deaths.
  • Although incomparable to loss of life, senior officials have admitted that procurement is “nowhere in the military command’s priority list.”
  • It has raised concerns that this will leave the army short of operational resources in the fight against ISIS.

Read more at Defense News

Rio Olympics Highlights Cross-Border Procurement Risks
  • The Rio Olympics, due to start in a few weeks, represents a massive opportunity for cross-border commerce.
  • The organising committee has already procured more than 30 million goods, including sports equipment and accommodation items.
  • However, organisations still need to be aware of the potential risks, such as logistical issues, and currency exchange rate fluctuation.
  • Reggie Peterson, Director of Indirect Supply Programmes at AmeriQuest, highlighted the importance of carrying out due diligence for organisations before getting involved.

Read more at PYMNTS.com

Facebook Drones Close to Taking Flight
  • Drones, built with the purpose of bringing connectivity to remote regions of the world, are closer to taking flight.
  • Facebook-owned British company, Ascenta, has run a successful test of its drones in the skies above Arizona.
  • The the solar-powered drones will be airborne for months at a time, beaming signals down to users on the ground.
  • The project is in competition with Google’s ‘Project Loon’, which aims to use high altitude balloons for the same purpose.

Read more on The BBC

Cloudy Future for ERP Based Procurement

Traditional ERP systems just don’t do the job for procurement. However, an integrated, Cloud-based approach could be the answer the profession is looking for.

Cloud & ERP

This article was written by Daniel Ball, director at eProcurement specialist, Wax Digital.

The benefits offered by best-of-breed eProcurement technology are well documented. Procurement professionals don’t need much convincing of the advantages of using them.

However, for some organisations, stepping away from using their Enterprise Resource Planning (ERP) system’s in-built purchasing tools isn’t always an easy option.

Modern ERP systems offer organisations a way to manage, collect and interpret data from a variety of business activities across seemingly all business functions, from purchasing and finance to HR and customer service. They also integrate all internal data-collection systems so that all business functions rely on one single database.

This one source of real-time data can help businesses to make decisions based on facts rather than assumptions. To coin a well-used phrase, they could be considered something of a panacea capable of eradicating all business process ills.

There is another way…                                                                                                             

However, for all of the many benefits ERP offers to the organisation as a whole, it’s not uncommon for procurement teams, amongst others, to be frustrated by its rigidity and functional limitations. While core functions such as Finance, Manufacturing and HR are well supported by ERP systems, Procurement, it would seem, is often less so.

Procurement teams will therefore inevitably face the choice between continuing to use ERP, or move to an alternative best-of-bread solution. Today this almost invariably means a cloud-based system that needs to integrate seamlessly with ERP.

The Integration Challenge

But how can procurement convince the rest of the business, and especially the IT department, that the existing functionality on offer to them is no longer adequate for their needs and that moving to a cloud-based system that can be integrated with ERP can be done easily and securely?

We’ve seen many of our customers seek to replace the procurement modules offered to them by their ERP systems but who have been stopped by the integration challenge. They have faced concern from IT managers that integrating with a remotely-hosted, third-party system may pose a risk to the organisation, especially when business-critical master data and finance systems are concerned.

However, the tide is now turning. Some cloud-based eProcurement solutions can securely integrate with ERP and their finance systems. This offers users freedom of choice and the ability to automate, improve, and better manage many of their day-to-day procurement processes.

Feasibility of Integrated Systems

A platform which comes with its own ready configured Integration Platform as a Service (iPaaS) is certainly a major step forward in convincing the finance and IT departments and using a separate but integrated system is not just possible, but advantageous.

We’ve worked with many procurement teams in leading organisations who’ve decided to reject the functionality on offer to them from ERP, and integrate cloud-based eProcurement.

One of our customers uses JD Edwards’ (JDE) ERP system for finance, and had used its procurement module for over ten years to raise purchase orders and approve invoices.

The system wasn’t very efficient or easy-to-use so certain departments chose to bypass it all together, preferring instead to manually process their orders.

However, the complexity and limited functionality of the existing system was preventing the organisation from making wide-scale purchasing efficiencies and not giving a clear view on organisational-wide spend.

Deciding to integrate a new eProcurement system with the JDE finance system that would enable a number of efficiencies including better spend control, more efficient order processing and payments, the organisation decided on a hybrid cloud approach allowing us to host our cloud-based service from within its data centres.

Wide Reaching Benefits

At another of our customers the procurement team was keen to make efficiencies to the management of its indirect spend across Europe.

Multiple systems were being used across the region for indirect purchasing, and these were largely manual, paper-based processes that did not provide full visibility and control over expenditure.

As a result, collaboration between the purchasing teams and finance, as well as with suppliers, was not integrated and could have lead to duplication on spend, or even the business purchasing goods or services it didn’t need.

In order to improve indirect purchasing across Europe, the organisation chose to move its entire European operations to a single, cloud-based eProcurement system to integrate with SAP.

Best-of-breed cloud-based, eProcurement solutions offer a host of benefits across the business, that are far reaching and extend beyond the walls of the procurement department.

Big Ideas Summit 2016: Big Idea #6 – Strategic Brand Value

Tom Derry believes procurement needs to move away from a traditional cost focus, and create a more strategic brand value for the profession.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Tom Derry, CEO of the Institute of Supply Management (ISM), believes that it’s time for procurement to have a more strategic brand value, and transition away from a traditional focus on cost, to support the greater dimensions of value for organisations.

As CEOs are becoming more concerned about risk profiles (brand risk; risk of disruption), the brand of procurement is being enhanced by offering value in risk management and mitigation, as well as adding value and managing cost.

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,500 like-minded procurement professionals from across the world.