All posts by Tania Seary

5 disruptive forces that will keep CPOs awake at night in 2015

CPOs around the world may have some sleepless nights in 2015 as they defend themselves and their companies against powerful disruptive forces.

5 things to keep you awake at night

In the true spirit of social media, I’ll highlight just five of these disruptive forces and have created the convenient “METOO” acronym to cover – Markets, Ethics, Transparency, Optionality and Organisational alignment.

2015 is the time to make sure you have your bases covered in these areas:

Markets – We would be naive if we didn’t expect more market volatility in the coming year.  In 2014 we saw interest rates remain low, the Rouble depreciate 50 per cent, the Australian dollar depreciate 20 per cent, oil prices drop 50 per cent, iron ore prices drop 40 per cent and Chinese growth at its lowest since 2009.

As we are all exposed to the instability of global markets, CPOs will need to decide how to either protect or profit from this volatility.

Ethics – Some leading global retailers had their public reputations shattered last year with revelations about unscrupulous and bullying behaviour towards their suppliers. CPOs will need to have a clear conscience that they are using squeaky clean negotiation techniques and are taking demonstrative actions to ensure their team, and the entire organisation, has a healthy and ethical approach to managing suppliers.

Transparency  – Discovering that one of your third or fourth tier suppliers is involved in corruption, using child labour, unsafe work practices, or substituting lower quality ingredients or parts will be the stuff of nightmares for CPOs in 2015.

A focus on supply chain transparency will see a whole lot of quality assurance consultancies, and other intermediaries, busy in this booming sector of the services economy.  As one of my mentors has always said, “better to know you’re right, rather than hope you’re not wrong”.

Optionality – Talking recently with a federal government defence advisor and the CPO of a leading European telecommunications company, really brought home to me the dilemma of developing and managing suppliers as we move to operating in an era of the “Internet of Things”.

More than ever, we are actually buying technology more so than the actual product or service (think driverless mining trucks – we’re really buying the technology to manage and maintain these vehicles, more so than the trucks themselves).

As technology increasingly becomes the product, we need to keep our options open in order to take advantage of the frenetic pace of change. Our tenders and contracts will need to more broadly define the functionality and utility we require of a product or service, rather than the exacting specifications we know today.

We will also need to ensure we keep our minds, doors and sourcing processes open to engage new suppliers with break-through technologies.  With most contracts being around 3-5 years long, CPOs will need to build optionality into their contracts to ensure they have the agility and can be opportunistic in adapting and adopting new technologies.

Organisational alignment – Procurement teams today are well-versed at “finding the money” and negotiating great deals that should result in bottom line savings.  That’s 101 stuff – our traditional raison d’etre .The trickier challenge has always been to “keep the money” and make sure that contracted savings actually make their way to the bottom line.

Today’s CPO has to work harder than ever to make sure “everyone is on the bus”, utilising negotiated contracts and treating every dollar as if it were their own.

Creating cost-conscious cultures is a huge change management exercise that requires a vastly different skill-set from the CPO’s traditional tool kit.  This challenge, teamed with frequency and voracity of carpet-pulling and direction-changing that will go on in the boardroom and C-suite this year, will require a lot of creative thinking and schmoozing by leading CPOs.

Anyone need a Xanex? (Is that a sleeping tablet?)

If you agree with my thoughts or have want to comment on the forces impacting procurement in 2015 – please Tweet #metoo #bigideas @taniaseary or just respond “me too” on LinkedIn or Procurious.

5 point checklist for a great procurement boss

What are the qualities that make a great procurement boss?

Gossip, scorekeeping and throwing you out of the office certainly don’t sound like the traits of a great leader… but read on and you may change your mind.

How to be a great boss

I’ve been told that in this day and age employees choose bosses, not companies, when choosing their next job.  In 2014, our Procurious community provided their thoughts on what makes a great procurement boss.  So, as we kick off the New Year, I thought I would share five things I think you should look for when selecting your next procurement boss.

Ask yourself, are they a CPO who:

  1. Kicks you out of the office.  As helpful as water cooler chit chat and Google can be for finding answers to your questions, there is nothing more valuable than getting out of the office and meeting with your customers and suppliers.  Your internal customers will be impressed that you have made the effort to come and visit them and understand how they use the product or service you are buying for them.  Similarly, actually visiting a suppliers’ office or plant will help you understand a lot more about that category you buy and identify new ways to add value.
  2. Fills you in on the goss’.  While it’s not appropriate for your boss to share all the intricacies of what’s happening within the upper echelons of your business.  It’s important that you know enough corporate gossip so that you can expertly manoeuvre yourself and your projects through the minefield of personalities and relationships that make up your business.  Stakeholder engagement is one of the most important skills required to be a successful procurement professional, so understanding “the lay of the land” is critical to your success.
  3. Helps you keep score.  Whoever you are in an organisation, you need to demonstrate the value you are delivering.  In procurement, this often means savings, but it should mean so much more than that.  Your boss should work with you to explain how your role links to the delivery of the overall business strategy and how all the different dimensions of your role deliver value – efficiency, productivity, innovation, customer service and other non-cost related value drivers are all important conversations to your CEO.
  4. Has a game plan.  Yes, your boss should have an overall plan for how their team is delivering against the overall business strategy, but they should also have a plan for you – both for what you need to deliver and how you need to develop in the coming year.  The best CPOs I know are obsessed with finding the best people and helping them develop.  They send their people out to be trained up in the skills they need and to build peer networks that will develop their leadership skills.  The worst CPOs keep their category managers locked away from the rest of the world in fear that their people will be poached.  A great CPO doesn’t need to worry about this, because they know that they have developed a great employee value proposition that keeps their team engaged… and retained.
  5. Is a bit of a procurement rock star.  If your CPO is well known and has a strong peer network, this provides you with a type of insurance policy that they know what they’re talking about and will hopefully be a great teacher.  However, you need to be careful that they’re not so committed to building their own profile out on the speaking circuit that they’re not providing enough support to their team.  A healthy balance between managing their internal and external relationships should provide you with a leader that connects you and your organisation with the outside contacts it needs to “stay in the loop”, while keeping everyone on track within your organisation.

How you are going to assess your potential new boss against this checklist when you are outside the organisation? This is where your network becomes invaluable.  You will know someone who knows someone (use LinkedIn or Procurious to see the connections) who has worked for your target boss.  Contact them, have a chat, see how the CPO measures up.  The most telling sign of success is how the CPO’s employees have been promoted both within and outside the organisation…

Good luck!

Podcast: Social Media for Procurement

ATK helps put procurement in the drivers’ seat with social media

Social media in procurement podcast. Image Pixabay

A.T. Kearney’s Knowledge Director, Helen Clegg, is spearheading the discussion for educating the procurement profession on the benefits of social media.

Hear my interview with Helen http://bit.ly/14VDC1x where I share how to leverage social networks, from building relationships with suppliers to receiving real-time news about supply chain disruptions.

On the topic of risk, I share with Helen my view that there are more risks to procurement professionals for NOT being connected with social media, than there are to being involved.

I also share my top tips for building a social media presence, as well as recommending that everyone finds a millennial mentor!

If you find it useful, I would love you to share it with your Procurious network, on LinkedIn or over Twitter?!

Are we the golden children of procurement?

When the CEO of one of the world’s largest resources businesses, Sam Walsh, says he believes procurement has entered a “golden age”, it certainly makes you think – could this really be one of the most prosperous periods of our profession’s history? And, if so, what are we doing to capitalize on this opportunity?

Remind yourself what Sam Walsh said on Procurious

Are we the golden children of procurement?

From the perspective of my 15+ years in the profession, I am confident in saying procurement professionals are in the midst of some very exciting times… and here’s why: 

  1. Our roles have never been so complex and therefore as interesting.  Today’s procurement professionals must manage all the expectations of their 360-degree stakeholders, up-skill and engage their teams, deliver an advantaged supply base, and all the while, keep their own careers prospering.
  2. Our old tools still work. Even though our roles have become more complex, most of the tools we have developed and used during the last decade are relevant today – strategic sourcing, category management, SRM etc. are all valued by the business and deliver outcomes. Everything old is new again, and most importantly, it still works.
  3. Digital is already disruptive. As customers, we are already online and procurement is about to explode into this space – drones, social media, 3D printing etc. are all transforming the way we think about everything from supply and demand; professional development; collaboration and sourcing.  The challenge is to ‘digitalise’ our ancient tools for this brave new world.
  4. We are a rare breed. Couple demand for our expertise with the rate the profession is growing, and you’ll see there are procurement opportunities exploding all over the world. Go and grab them!
  5. Our image is golden. As more talented people enter the profession and we are called on to tackle issues of core business importance, our image as a profession has grown stronger than ever. Gone are those outdated aspersions that find procurement stuck in the “dark ages”. That’s where Procurious comes in – Procurious is reimagining the image of the modern procurement professional – with the core of its members proving themselves to be a smart, upwardly mobile, and commercially savvy breed. 

“Study the past if you would define the future.”
― Confucius

History of Procurement

Procurement is one of the fastest growing professions in the world. For those of you new to procurement, here’s a “short history of the world” which may give some perspective on whether we are indeed in the “golden age”.

The Dark Ages

OK, so we all know our forefathers started in the backroom.  Clad in their brown cardigans, they executed contracts, processed purchase orders, accepting the odd bottle of scotch from suppliers at Christmas time.

Enlightenment

The forefather of modern procurement is widely accepted to be Gene Richter, who worked at IBM in the 1990’s.

The major US companies soon followed IBM by leveraging their global volumes and introducing standardized procurement processes. Not so long ago, the seven step sourcing process was being implemented, centralized procurement teams were formed, followed by supplier relationship management, and more recently category management.

The dot-com boom

The dawn of the new millennium was a time of rapid organization and maturation for the profession.

Many large companies made significant investments (such as $1M+ board approvals) to invest in cross-company procurement exchanges.

Now referred to as Procurement’s dot-com boom, these group-buy investments got procurement quickly on and then just as quickly off the Board agenda. Investments in group buying (and the associated technology) all “became a bit too hard”.

Despite these high profile, public failures, procurement continued to flourish and today, the “dot.com boom” represents the time we moved from the back room – in our brown cardigans – to the boardroom, where our Chief Procurement Officer’s increasingly find themselves either sitting, or at least contributing, today.

Globalisation and the extension of the supply chain

Once all the large companies had leveraged their spend globally, the hunt was on for the most cost-effective country to manufacture goods.

All of a sudden we were managing suppliers and their suppliers in foreign and often remote, locations. This is where the profession became, and continues to be very exciting…

Globalisation has brought with it significant advances, and made our profession  much richer as a result.

Today, its universally accepted that procurement has moved beyond just cost – we now play an integral role in areas of risk management – including supply, quality, innovation and mergers & acquisitions (M&A); new product development; and corporate social responsibility.

The Digital Age

As if our jobs weren’t “interesting” (aka challenging) enough, now we have to account for social media too… Not only are we expected to manage a worldwide network of suppliers and contractors – we are exposed to dangers like customers or shareholders posting a “Tweet” or “status” about how we are managing the supplier.

Yet, this is why working in procurement today is so incredibly interesting and why the profession continues to flourish. We’re working at the interface between the business and all its stakeholders – be that the community, customer, shareholder, supplier, and employee. We need to manage all these stakeholders with the highest integrity in order to protect our brand.

How to make the most of the golden age

If Sam Walsh is right, and we are in the ‘golden age’, how do we take advantage / don’t let this golden opportunity pass us by:

  1. Market yourself and your ideas!  You are your own brand, and nobody knows YOU better. Leverage your good name and use your influence to promote the profession.
  2. Stay connected. With the world and with your peers. Identify risks and opportunities, learn from others.
  3. Keep learning. Every minute of every day we are learning. Whether that be learning from our peers, our customers, and suppliers. And by doing this we are able to identify issues for procurement as they emerge.
  4. Enjoy!  Make the most of being in this profession at this prosperous point in history.  There are so many career opportunities right now – you should be grasping every opportunity to learn and grow.

Conclusion

Although an unlikely comparison for our profession, I use Madonna as an inspirational metaphor/analogy for managing your career.  Even though she’s been in the same role for more than 30 years, she keeps “reinventing” herself for her target audience.  She’s still a pop singer, but she is constantly changing her branding to ensure she stays relevant. As professionals we need to be doing the same!

And that’s what I believe Procurious can bring to the profession – a place to stay current, and stay connected. A place where all procurement professionals can get ahead and thrive in this golden age and beyond!

The term Golden Age (Greek: Χρυσόν Γένος Chryson Genos) comes from Greek mythology and legend and refers to the first in a sequence of four or five (or more) Ages of Man, in which the Golden Age is first, followed in sequence, by the Silver, Bronze, Heroic, and then the present (Iron), which is a period of decline. By extension “Golden Age” denotes a period of primordial peace, harmony, stability, and prosperity

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Spend Matters hits the nail on the head

When it comes to procurement, Peter Smith is a man who knows what he’s talking about.

The Managing Director and Editor of Spend Matters UK/Europe is among the profession’s top influencers so I was particularly delighted to read his review of Procurious.

The assessment was balanced and overall, very positive: “Procurious is a well put together, professional and attractive site, with some people behind it who clearly know the procurement world pretty well”.

In questioning whether the niche environment of Procurious will offer members value beyond that of broader networking platforms such as LinkedIn, Peter hits the nail on the head.

While social networks such as LinkedIn or Twitter offer scale and reach, they tend to be noisy, overcrowded and the content often lacks relevance for procurement. If you were looking for genuine career guidance, LinkedIn can rarely offer the in-depth answers needed.

As Procurious continues to evolve (We are currently in a soft launch phase – the full site will be launched in September 2014), we believe the key differentiator from other broad networking platforms will be the ability to connect and learn directly from people operating in the same industry or managing the same categories.

The quality and level of Q&A activity in the ‘Discussions’ section of Procurious, as compared with many of the stagnant discussion groups on LinkedIn, seems to confirm our belief that people feel more inclined to seek advice and share in a highly specialized and credible environment.

While Procurious is by no means the first niche vertical network out there – Oil Pro, set up to cater to professionals in the Oil and Gas sector, has attracted over 50,000 users in just 7 months – it offers procurement the opportunity to take a real leadership position within the business: Demonstrating how social media can redefine the way modern professionals work, connect and collaborate.

Just this week, TechCrunch featured an article on the rise of social professional networks – read it here.  I’m extremely proud that Procurement, via Procurious, is at the leading edge of this trend.

Procurious just might be a game-changer for Procurement because despite the undisputed progress made internally, frustrating and dated misconceptions persist externally. It doesn’t help that as a community, procurement professionals are still largely disconnected.

By coming together on Procurious, we can support the next generation of procurement leaders and empower them to change the face of the profession from the inside out.

In little more than a month, we’ve registered 1000 members from 48 countries. So the signs are looking good but we’re not about to stop here. To achieve our goal of becoming the global hub for procurement, we need your support.

If you haven’t already done so, we’re asking you to logon or refer a colleague to www.procurious.com – there is no cost to become a member or access any of the online training. We’re hungry for your feedback as to the direction Procurious should take and what value we can provide to you as members.

By coming together and supporting your fellow peers, we will demonstrate the strength and reach of this incredible global community.

Tania