All posts by The Faculty

A Shark at the 2018 Asia-Pacific CPO Forum

Shark Tank star, entrepreneur and talent expert Andrew Banks presented at the 2018 CPO Forum as a guest of our Premium Sponsor, American Express. Here are the highlights for this top-rated speaker.

There’s no single, agreed-upon definition of what leads to career success. If you pose the question on Google, you’ll find opinions ranging from salary levels, to happiness, to work-life balance, to growth opportunities.

It was refreshing, then, when Andrew Banks stood on the stage at the 2018 CPO Forum and announced that he had discovered the following formula: career success lies at the sweet spot between:

  • what you are passionate about
  • what you are good at, and
  • what the world

Banks is a modern-day polymath who might have delivered a fascinating speech on any number of topics, but knowing that he had over 60 CPO-level delegates in the room, he chose to speak about leadership and talent. Drawing upon his experience as a co-founder of Morgan & Banks, he spoke about motivation, attributes, values and purpose, and the winning combination when hiring talent. 

Motivation

“Intrinsic motivation is desirable, but extrinsic motivation helps direction”, says Banks. His point is that although a self-driven professional is admirable, a savvy leader will tap into their teams’ innate competitiveness and desire for rewards. He recommends driving performance and out-of-the-box thinking by:

  • creating competitions and prizes for teams and company-wide goals
  • making the rewards special (outside of normal rewards that are a part of the job)
  • making it open to all (anyone can play!)
  • setting specific targets and timelines to drive a sense of excitement and urgency.

Attributes Beat Skills and Knowledge

Banks is a strong believer in the power of psychometric testing and its ability to predict future job performance. Psychometric tests soon became a key differentiator for Morgan & Banks, with candidates tested across areas as diverse as cognitive ability, personality, interests, and attitudes. His message is similar to that of U.S. media figure Arianna Huffington, who tells businesses that no matter how brilliant an employee may be, the company should no longer tolerate “brilliant jerks” in the workplace.

Cultural Leadership

Banks quoted Peter Drucker’s famous observation that “Culture eats strategy for breakfast” before delving into an explanation of what cultural leadership looks like. It involves:

  • a constant rally around a ‘noble purpose’ – remembering that part of Bank’s definition of career success is “what the world needs”
  • highlighting core values daily/weekly.
  • being interested in your team, not interesting
  • providing inspiration and expecting the best.

The Winning Combination When Hiring Great Talent

If you can find a candidate with the combination of both passion and ability, you’re onto a winner. Banks comments that in job interviews, there are ways to ascertain what people want, opposed to what they think they want. Get them to explain the why within questions such as “What’s the best job you’ve ever had?”, and “Where do you excel?”

Similarly, when you’re writing a job description, always describe the behaviours and qualities you seek, not the role – just as you would describe the driver, not the car.

According to Banks, an ideal team member understands the business model and displays curiosity, thinks for themselves and innovates naturally, gets on well and never settles, has extra capacity for the next challenge, and makes their boss’s life easier.

In summary, if a leader is able to:

  • keep yourself refreshed by staying curious, seeking new input and inspiring the team,
  • motivate with games and rewards for out-of-the-box thinking,
  • get the team culture right around noble purpose and values,
  • start with the right raw materials …

…you’ll get superior performance!

Visit Chief Future Officer for more thought-leadership from The Faculty CPO Forum Premium Partner, American Express.

5 Reasons Business Partnering is Procurement’s Secret Weapon

Unlocking the benefits of business partnering won’t happen overnight, but if you can get it right, partnering can supercharge relationships between procurement, your stakeholders – and your suppliers.

“For me, business partnering is about building trust,” says Keith Bird, Managing Director of The Faculty. “It’s also a marker of the maturity of your procurement function.”

Bird is speaking at the Asia-Pacific CPO Forum in Melbourne, where he is facilitating a panel of procurement leaders from some of the region’s biggest organisations. They’re talking about how procurement can reap the benefits of business partnering, and the challenges therein. The panel raises five key reasons that business partnering is an incredibly effective way to uncover a new level of value in your organisation.

1. Business partnering is a sign of procurement maturity

We often discuss where organisations sit on the procurement maturity curve. Markers include how the function is organised (decentralised, centralised or centre-led), a focus beyond cost, and the existence of programs such as supplier relationship management (SRM) and the deployment of advanced tech including AI and cognitive procurement.

Business partnering is another such marker. Its existence suggests that the procurement team has moved beyond the traditional stakeholder engagement model to extract further value from customer relationships. Panelist Zelda Pretorius-Kovacs, Head of Category Management at Woolworths Ltd, says that business partnering is an essential part of moving from cost reduction to value creation. “It’s a way of securing the future of procurement in your organisation”, she says. “We looked at our relationships with fresh eyes. Anybody can map internal stakeholder relationships, but we wanted to take a new approach to how we partnered with the business.” Pretorius-Kovacs comments that while her wider organisation was focusing on winning the trust of external customers (shoppers), the procurement team mirrored this journey with a parallel focus on winning the trust of internal customers.

2. Business partnering builds relationships

Andre Harvey, General Manager of Procurement and Supply at Stanwell, says that the way you approach internal customers in your organisation is crucial. “We walk in with curiosity”, he says. “We look for problems that stakeholders have that we can help solve. Fundamentally, procurement has to be like water – it has to find the cracks; find the crevices, and fill them.” This means that when Harvey built up his procurement team, he’s sought to hire a group of problem-solvers and entrepreneurs that will embrace this challenge.

Pretorius-Kovacs adds that an unexpected benefit of business partnering was that the procurement team broke down its own internal silos and began working together more effectively. The team undertook the Game Changer Index to discover their unique attributes before being partnered with the right people to get the best outcomes. Her team has also improved engagement with partners by shifting the conversation to business targets, rather than procurement targets.

3. Business partnering builds trust

Stephen Jhangiani, Senior VP and Head of Supplier Relationship Management at Singapore’s DBS Bank, comments that procurement has worked hard to get internal business partners to work with them and trust procurement. “We’ve focused on being accountable back to the business”, he said. Similarly, Pretorius-Kovacs notes that business partnering is not only an opportunity to develop trust, it’s a chance to mend some bridges along the way.

4. Business partnering enables procurement to connect the dots

Through business partnering, procurement is granted access to a new level of information and visibility of the issues facing their internal customers, which often reveals ways that we can help. Pretorius-Kovacs notes that partnering is an ideal way to build a bridge between the procurement function, the business and its suppliers. “It’s a way to connect all the dots and bring innovation to our organisation in a way that other departments simply cannot.”

5. Internal business partnering will help you rethink your supplier partnerships

“If you can’t have a conversation with internal business customers, without the skepticism, how on earth are you going to have a conversation with the external market?” asks Bird. Getting your internal relationships into the best-possible shape is an important step to take before undertaking effective external supplier engagement. McSweeney notes that open and transparent conversations with customers and suppliers are key. “We want to know where we rank with them, why they’re interested in working with us – we need that level of transparency and candour.”

Delegates at the CPO Forum were polled on the concerns that their organisations had about external business partnering, with the following results.

Interested in learning more about how your organisation can unlock the benefits of business partnering? Contact The Faculty Managing Director Keith Bird via [email protected] to discuss our tailored workshops and training solutions.  

Paydirt! Resources Sector Supply Chain GM Wins Prestigious Award

Hot off the press: the Asia-Pacific region’s 2018 CPO of the Year and Future Leader in Procurement (FLiP) of the Year have been announced at The Faculty’s Gala Dinner.

Dramatically shifting the impact of procurement in a truly international role, MMG General Manager of Supply Chain Ron Brown has been recognised for delivering major procurement and supply chain transformation, driving value creation across the organisation and consistently delivering tens of millions in savings per annum over the past four years.

Brown’s achievements were celebrated at last night’s CPO Forum Gala awards, hosted by leading procurement advisors The Faculty.

International role

Global resources company MMG Limited operates and develops copper, zinc and other base metals projects across Australia, the Democratic Republic of Congo, Laos and Peru. As such, Brown and his centre-led procurement team have become adept at not only working across time-zones but also in negotiating the significant language and cultural differences in the four regions. Brown himself has a full travel schedule, as he regularly visits sites across four continents in person.

Shifting the focus

Brown’s commercial leadership has led the organisation to recognise that simply focusing on cost-down does not work. Instead, Brown has shifted the focus to:

  • Improving the skill-sets on contract management, creating commercial value over the life of the contracts and putting in place systems to ensure opportunities are not left on the table.
  • A greater emphasis on supplier relationships, including better engagement, more regular communication around performance to enable greater value creation.

Greg Travers, Executive General Manager Business Support, comments that Business Unit stakeholders within MMG have recognised the value that Brown and his team are delivering. “They have worked hard on improving relationships and have turned the perception of procurement around favourably. Ron and his team are getting out of the office to see the business, and spending more time on site.”

Influence beyond procurement

Travers also comments that Brown is a well-rounded, commercially focussed executive who contributes more broadly across the organisation, and has presence at all levels including the executive team and the Board. “Ron is one of the General Managers the Executive Group regularly nominates to attend group meetings and get involved in projects from the very start. He is energetic and is ideal for contributing to broader organisational projects and for change and efficiency reviews.”

Significant wins

Key achievements that contributed to Brown’s nomination for the CPO of the Year award include the delivery of a major procurement project to support the construction of the recently completed Dugald River Mine site in Queensland (Australia). Brown and his team embedded the contract management approach to build savings, sourced long-lead items and engaged local suppliers in a logistically challenging, complex industrial environment. Brown and his team contributed to the delivery of the project significantly under budget and ahead of schedule. They also achieved multi-million-dollar savings through an electricity contract revision for Las Bambas (Peru), and enhanced global sourcing primarily through China, resulting in significant savings across a wide range of supplier inputs.

Brown and his team have also re-engineered and simplified procurement policy, process and reporting frameworks at MMG, creating a high-level dashboard to drive visibility. Site inventory has been improved through more efficient contract management, buying at better prices and strengthening supplier relationships.

People Leadership

“Ron has significantly lifted capability across his team, hired and developed the right people in procurement and supply,” says Travers. “He mobilises his team and creates career pathways for them.” Brown has also actively promoted gender diversity across his team.

But the CPO of the Year wasn’t the only award presented at the #CPOForum18 Gala Dinner. One of procurement’s rising stars, Maryam Rahimi of Sydney Trains, was also celebrated with the presentation of the Future Leader of the Year (FLiP) Award.

Len Blackmore, Maryam Rahimi and Tania Seary

Keith Bird, Managing Director of The Faculty, says “The CPO of the Year and Future Leader of the Year Awards not only recognise the significant achievements of these talented professionals, but they serve as an important source of inspiration for other aspiring leaders in the profession. Both Ron Brown and Maryam Rahimi are known both for delivering excellent value to their organisations, but also for their dedication to mentoring, coaching and inspiring others.”

Public Sector Procurement Star Wins Future Leadership Award

It’s a big week for Sydney Trains’ Maryam Rahimi. Not only is the Australian public sector procurement professional stepping up to a new role where she’ll be leading a team of 27 people, Rahimi was also awarded the prestigious Future Leader in Procurement (FLiP) of the Year Award for 2018 at last night’s gala event in Melbourne.

Originally from Iran with an engineering and manufacturing background, Rahimi immigrated to Australia in 2010 where she entered the rail sector, first with Downer Rail and then with Sydney Trains. This week, Rahimi is moving from her role as Acting Senior Business Category Manager to Manager, Plant Hire. This leadership position with responsibilities and a team across both Sydney Trains and NSW TrainLink has greatly expanded responsibilities from her previous role – and she’s 100% up for the challenge.

Len Blackmore, Deputy Executive Director of Procurement for Sydney Trains and NSW TrainLink, says that Rahimi’s personal story is as impressive as her professional achievements. “Maryam is balancing the demands of a busy career whilst raising her young family, and was the sole income earner upon her arrival in Australia. She is a highly capable professional with enormous resilience.”

“Resilience” is a term that comes up frequently when discussing Rahimi with Blackmore, who says one of the key markers of resilience is that fact that she proactively champions change in the organisation. “Maryam has been enthusiastically involved in the complete revamp of our Source to Contract process”, he says. “This has been on top of her day-to-day role, where she’s also embraced the procurement improvement program we’re currently running.”

But it’s in stakeholder engagement where Rahimi has her most impressive wins. Upon settling in at Sydney Trains, she quickly identified an issue where stakeholders were not highly engaged with procurement. Through outstanding business partnering with a focus on the customer, Rahimi lifted stakeholder engagement and improved the perception of procurement through the establishment of trust, credibility, early engagement and taking the time to understand customers’ needs.

Rahimi’s commercial leadership was another key factor in her being nominated for the Award. Along with strong negotiating skills, she has a strategic focus, thinks holistically over the total life of the contract, and involves the end user in designing solutions to get results. Rahimi reportedly has a great touch in leading people and is known for her focus on working collaboratively and fostering a positive culture. She has lifted the capability of her direct reports through mentoring, coaching and inspiring others.    

“I’m absolutely delighted about her winning the award because Maryam has worked extremely hard to get where she is”, says Blackmore. “It gives someone who is a high performer with high potential the due recognition that will benefit her career.”


About The CPO of the Year Award

The CPO of the Year Award is a flagship initiative of The Faculty, created in 2012 to recognise and celebrate the achievements of procurement professionals across Asia Pacific.

For the past 6 years the Award has celebrated someone who has been assessed as an outstanding leader, a prominent contributor to their business and the broader profession, leading delivery of high ROI, and exceeding performance expectations. The Award is a measure of executive presence, commercial insight, people leadership abilities, innovation, professional advocacy, technical ability and integrity.

About The Future Leader in Procurement (FLiP) Award

The Future Leader in Procurement (FLiP) Award recognises an outstanding commercially focused member of the next generation of procurement professionals who is making a demonstrable difference to business results, across different industry sectors, budgets, team size and experience. The FLiP Award will be presented to a multi-talented professional who has demonstrated leadership capabilities and is an influencer and trailblazer in their organisation. The Award is a measure of leadership potential and presence, commercial insight, stakeholder engagement, innovation, professional advocacy, technical ability and integrity.

The 2018 Judging Panel was comprised of Michael Andrew, Chair of the Board of Taxation and former Global CEO of KPMG, Helen Sawczak, National CEO of the Australia China Business Council, and Andrew Porter, CFO of Australian Foundation Investment Company and President of the Group of 100. The meeting was chaired by Tony Megally, General Manager, The Source.

The CPO of the Year and Future Leader of the Year awards were sponsored by Coupa Software.

About The Faculty

The Faculty is recognised as one of Asia-Pacific’s leading procurement advisors. The team works with organisations to transform and elevate the role of procurement, build high performance commercial teams and facilitate professional knowledge networks.

Fight Or Flight? How To React To Change

Curl up in a ball, or seize the moment – what’s the best way to move forward in a period of uncertainty and change?

Piotr Krzeslak/Shutterstock.com

One thing we know, given the past 18 months, is that dramatic political change leads to economic uncertainty. With protectionist sentiment rising, trade remaining stagnant, the US economy led by a skittish and unpredictable President, a host of unknowns around the Brexit fallout, European elections, abandoned trade deals and other shocks, it’s hard to know how to plan ahead.

Elevated uncertainty can lead organisations to perform the enterprise-level equivalent of curling up into a ball. Projects and investment plans are deferred, fewer workers are hired, risk-aversion goes through the roof, short-termism triumphs over long-term growth and earnings take a hit as consumers decrease their spending.

Three high-profile panellists debated this issue at PIVOT: The 10th Asia-Pacific CPO Forum, offering delegates some very different answers to the question of how to react to change. A consensus was reached, however, around one point – the importance of agility.

Giles Breault, Founder of The Beyond Group, shared this gem: “If you believe that necessity is the mother of invention, I’d say uncertainty is the mother of agility.”

A willingness to adapt and adjust

Agility must be encouraged not only at the process level, but at the senior and strategic level too. This means having the ability, and willingness, to change plans at a moment’s notice. Breault told the audience: “When you’re living in an uncertain environment, you need to constantly plan, revisit and do course corrections. Similarly, you need to demand of your suppliers that they’re doing the same thing.”

Does this mean long-term business plans are now unrealistic? It depends entirely on your approach. Companies that “set and forget” three, five, or even ten-year plans, and then stick doggedly to the path, will quickly discover just how rapidly those plans become obsolete.

Increasingly, best-in-class executives are those that possess a degree of flexibility in how their mind works, have a degree of empathy with their people and the market, and can remain confident in the face of ambiguity.

KPMG Australia Chairman Peter Nash said that “there are still many CEOs today who revert to rigid process and a doctrine of control in reaction to issues faced by the business. They draw the decision-making up to themselves and push down their commands. I expect in the future we’ll see a more agile form of CEO emerging.”

Breault also comments on this outdated method of reacting to change, and ties it to redundant leadership skill-sets. “Many executives are finding themselves in an uncomfortable position as they realise that the skills which landed them in their roles aren’t the skills that will keep them there. The very things they congratulated themselves on achieving won’t keep them employed.

“For example, of the fifteen major corporations we’ve talked to, a total of zero had a specific program for digitalisation. These organisations have no plan how to move ahead, which is absolutely stunning.”

Take responsibility for staying informed

Peter Nash told panel facilitator Keith Bird (MD, The Faculty) that CPOs need to take responsibility for informing themselves about changes on the horizon. “Read about the issue, talk to people in your network and find out how it will impact your business by discovering how it’s impacting other businesses. It’s important to have a high degree of personal responsibility when it comes to keeping yourself informed.”

Embrace change

Nash says organisations should make time to examine how they get things done. “Are they tied to rigid processes or to certain types of thinking, or have they moulded their organisation into something more fluid? Do they test new ideas, adapt to disruption and engage with the community? Organisations that are more adaptive will be far more successful than others.”

Looming disruption or inevitable change doesn’t have to be scary. George Boubouras, Managing Director and CIO of Contango Asset Management, had this positive message to share with Forum delegates facing change: “Challenge yourself and prepare for the exciting time ahead! Embrace the disruption with enthusiasm and look at how you can contribute to it.” 

Trailblazing CPO Commercialises Procurement

Broadspectrum CPO Crowned Asia-Pacific’s CPO of The Year

Flipping the old perception of Procurement as a back-room entity on its head, Broadspectrum CPO Kevin McCafferty has been recognised for introducing a value-based approach to procurement and dramatically transforming the function into a customer-oriented, bottom-line focused team.

McCafferty’s achievements in consistently achieving both financial and operational objectives were celebrated at last night’s CPO Forum Gala awards, hosted by leading procurement consultancy The Faculty.

Overseeing a procurement spend of $1.8 billion, Executive General Manager, Procurement Australia and New Zealand, Kevin McCafferty won the 2017 CPO of the Year award, after significantly increasing spend under management and delivering over $50 million EDITDA benefits, against an initial target of $30 million.

Broadspectrum CFO Vince Nicoletti, said: “Since joining two years ago, Kevin has made a significant difference to the procurement function within Broadspectrum. His strong transformational change leadership has seen the area move to a more strategic function within the business, which is now delivering bottom-line results and benefits.

“Most importantly, he has up-skilled and lifted capability across his team and enforced process discipline by implementing appropriate technology and system solutions.

“Kevin and team have also driven commercialisation of procurement and supply chain services into Broadspectrum’s contracts with clients.”

60 Seconds With Kevin McCafferty

Procurious managed to steal 60 seconds with CPO of the Year Winner, Kevin McCafferty, who discussed the number one skill for CPOs of the future.

CPO of Year Winner, Kevin McCafferty : “The key to our success is being recognised at the highest levels of the organisation as a team that creates shareholder value.

“What I discovered when I first started this role was that the approach to procurement was very inward-facing, while the rest of the organisation was focused primarily on the customer. This difference in our focus represented a lack of alignment, so my priority has been to change the thinking across the three teams under Procurement’s umbrella.”

The CPO of the Year award highlights the importance of the CPO role in organisations by recognising a remarkable commercial leader who is making a demonstrable difference to business results, having regard to the circumstances of different industries, budgets and the diversity of procurement team size and experience.

The Faculty’s Founding Chairman, Tania Seary, said: “This significant change projects undertaken by our new CPO of the Year, Kevin McCafferty, highlights how modern procurement teams are driving business innovation by putting the end-customer and shareholder value first.”

“By enabling procurement leaders to drive cultural change internally, Broadspectrum has achieved both bottom-line company benefits, as well as delivering true business and commercial partnering, in a remarkably short period of time.”

About The CPO of the Year Award

The CPO of the Year Award is a flagship initiative of The Faculty, created in 2012 to recognise and celebrate the achievements of procurement professionals across Asia Pacific.

For the past 5 years the Award has celebrated someone who has been assessed as an outstanding leader, a prominent contributor to their business and the broader profession, leading delivery of high ROI, and exceeding performance expectations. The Award is a measure of executive presence, commercial insight, people leadership abilities, innovation, professional advocacy, technical ability and integrity.

The 2017 Judging Panel comprised Ms Sharyn Scriven, Group Manager, Metering Dynamics; Michelle Loader, Chief Executive Officer, Chandler Macleod Group and Matt Perfect, Founder Impact Spender. The meeting was chaired by Tony Megally, General Manager, The Source.

For more information on CPO of the Year click here.

About The Faculty

The Faculty is Asia Pacific’s leading procurement advocates, highlighting the integral role procurement has to play in protecting margins, brand and growth for over thirteen years. Through consulting, professional development and creating knowledge networks for CPOs to share best practice learnings, The Faculty helps business to accelerate and optimise their procurement investment.

For more information on The Faculty click here.

Perception vs Reality – What Your Suppliers Really Think of You

Have you ever wondered what your suppliers really think about you? How big a gulf exists between the perception (what you think) and the reality (what they think)?

marcogarrincha/Shutterstock.com

You may believe you have effective processes, but do they agree? Do your suppliers really feel like a “valued business partner”, or is that just empty rhetoric?

The Faculty is currently undertaking its Supplier Confidence Index research for 2016. Here are seven common pieces of feedback we’ve gathered across hundreds of suppliers.

1. Organisational Alignment

Some suppliers very confidently told our researchers they were treated as valued business partners. Others, however, stated that they were simply “suppliers”, not partners, but due to the non-critical nature of their product or service this was to be expected.

One recurring comment was that talk of “Business Partnerships” does not always live up to the rhetoric. Procurement frequently uses language about partnerships. However, in a cost-constrained environment, every consideration but cost “goes out the window”, and the relationship falls back to a transactional nature.

2. Relationships and Communications

Suppliers are frustrated by silos within their client’s organisations. Communication issues within your organisation, or a silo mentality where procurement isn’t talking effectively with other functions, are highly evident to suppliers. This causes extra work, as suppliers have to explain the same concepts multiple times to different stakeholders within the organisations.

Suppliers also report that they receive conflicting instructions and mixed messages from different functions. Poor communication between the central and site-based procurement teams was another area of concern.

3. Value Creation Opportunities

Organisations are increasingly receptive to new ideas presented by suppliers. Suppliers report that this area has greatly improved from 5-10 years ago, when ideas were rejected out of hand for not aligning with policy, or for simply being too difficult to implement.

New ideas are now being heard, considered, and then implemented. This encourages suppliers to keep coming back with further ideas for business improvement.

4. Commercial Strength of the Relationship

A common complaint centred around unexpected changes to scope, which increases cost-to-serve. This could be improved through better communication, flagging the changes with suppliers as early as possible so they can plan accordingly.

Suppliers also reported a large amount of discretionary (unpaid or “goodwill”) work. One point to note is that suppliers generally seemed to be understanding about restructures and redundancies, even when they affect the business relationship.

5. Product and Service Complexity

Many suppliers made comments around unnecessarily complex procurement processes, which again increases the cost-to-serve. This issue is present in both the private and public sectors.

6. Business Process Effectiveness

Demand planning is an area of concern. Suppliers have flagged that they’d be willing to help with forecasting and planning processes if there was a better flow of information.

7. Integration and Joint Initiatives

Survey and interview results indicate that systems integration is generally improving, although there are further opportunities to integrate. Suppliers note that non-aligned systems mean they have to bear the cost of extra data-entry staff who would otherwise be unnecessary.

The Supplier Confidence Index is part of The Faculty Roundtable’s annual research program. Please contact Sally Lansbury for more information.

Don’t Discount the Outliers – Steal Knowledge From Them!

Outliers are frequently discounted in statistics. But in procurement, it’s worth being more open minded – they may have great knowledge to share.

outliers

The Faculty is excited to share its “Outliers” Best-Practice Case Studies paper here on Procurious.

Stealing from your peers may sound ethically questionable at best. However, in today’s fast-paced and increasingly frenetic business environment, individual CPOs simply do not have the time or resources to develop their own solutions to every challenge.

That’s why peer groups such as The Faculty Roundtable exist. They provide a forum for collaborative learning and knowledge sharing around best practice procurement.

Identifying the Outliers

How do we identify best practice? In statistics, an “outlier” is defined as a data point that is a considerable distance from the rest of the observation points. Depending on circumstances, statisticians often choose to exclude outliers from the data entirely so they do not skew the results one way or another.

At The Faculty, we take the opposite approach. We see outliers as an opportunity to celebrate success, set the standard for the industry and, most importantly, learn from best practice.

The Faculty Roundtable’s recent Benchmarking report measured performance across multiple procurement practice areas, including:

  • Corporate Sponsorship,
  • Strategy,
  • Team Structure,
  • Communications,
  • Environment,
  • Innovation,
  • SRM,
  • Systems, and
  • Training and capability.

Our latest research paper contains a series of case studies highlighting some of The Faculty Roundtable members’ approach to common challenges across many of these practice areas.

Case study participants were selected due to their “outlier” status in specific benchmarks, or because they have taken an innovative approach to problem solving, demonstrating excellence in one or more areas.

Learn from the Best

The six case studies cover best-practice solutions to the following shared challenges for CPOs and their teams:

  1. Influence is Everything: Executive Support in Action at Broadspectrum

Learn how Broadspectrum CPO Kevin McCafferty ensured that Procurement gained recognition at the highest levels of the organisation as a team that creates shareholder value.

  1. A Partnership of Equals: Procurement and Environment at Australia Post

Australia Post’s Head of Environmental Sustainability, Andrew Sellick, explains why a partnership with Procurement is the most impactful way for the Environment team to meet and beat the organisation’s carbon reduction targets. 

  1. Taking the Leap: Moving from Operational to Strategic SRM at Energex

It’s easy to get bogged down in the detail. Brett Mann, Group Manager Procurement & Supply at Energex, explains why you need to have the right people in the room to facilitate a strategic level of discussion with suppliers.

  1. Do CPOs Even Need a Communications Plan? Rethinking Stakeholder Communications at Santos

Santos CPO David Henchliffe argues that a communications plan is only required with stakeholders whom Procurement doesn’t have a working relationship with.

If Procurement is intimately involved in the business, then senior executives (and their teams by extension) will know all about your function’s value contribution, upcoming projects and challenges.

  1. Planning for Success: Executing Locally Crafted Strategies in a Globally Owned Enterprise at BP Asia-Pacific

Even in an internationally-owned business with global category strategies, local planning is more important than ever. This is the view of Lauren Feery, Asia-Pacific Strategy and Performance Manager for downstream procurement at BP. Find out how to connect parallel local and global planning processes. 

  1. Keeping Your Eye on the Prize: Working Towards a Unified P2P System Across 30 countries at Australia and New Zealand Banking Group (ANZ)

ANZ has taken on the challenge of unifying, streamlining and simplifying P2P systems in its offices across the entire Asia-Pacific region. From Melbourne to Auckland, Singapore to Manila, the rollout has required best-practice change-management to ensure every end-user is on board.

The purpose of these bite-sized case studies is to enable CPOs to learn from the region’s best-in-class procurement teams and take proven methodologies back to their own organisations.

  • The Outliers Best-Practice case studies are available to download now from Procurious > Groups > Benchmarking.
  • The Faculty Roundtable’s full Benchmarking report is also available here on Procurious > Groups > Benchmarking.

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About The Faculty Roundtable

The Faculty Roundtable is comprised of an influential group of procurement leaders in the Asia-Pacific region. These leaders gather to share their experiences and insights, to achieve greater commercial success for their organisations.

Through The Roundtable, members have access to leading-edge thought leadership and commentators, a ready supply of valuable expertise through exclusive market intelligence, as well as networking and professional development opportunities for themselves and their team members.

Meetings are held throughout the year in Melbourne, Sydney, Brisbane and Singapore.

For more information, please email [email protected] or call +61 3 9654 4900.

Meet the Procurement Young Gun Making Her Mark Globally

It’s a big deal to be charged with the task of managing a significant spend portfolio that covers the Asia-Pacific region. But this BP strategic sourcing manager takes it all in her stride. Meet Joanna Graham, winner of the 2016 Future Leader in Procurement Award.

Johanna Graham

Graham looks after procurement for the retail networks of one of the world’s largest oil and gas companies. Her role encompasses the entire BP service experience, including building new service stations and travel centres, maintaining them and supplying them with equipment. She manages a team of four people.

It’s no mean feat,  particularly given that she’s played an integral role in a number of significant strategic projects recently undertaken by BP.

Driving Procurement Value

“It’s a really exciting time to be working for BP, especially as there is a growing culture of innovation. There have been real opportunities to create value for the business as BP strengthens its competitiveness. This all creates an environment ripe with opportunity for Procurement to drive value in fresh and creative ways”.

Graham’s manager and BP’s procurement director, David Macdonald says: “Joanna exemplifies everything that’s good about the modern procurement professional. She’s got remarkable commercial acumen, negotiation planning and stakeholder management skills all brought together with a tough-minded determination. From my experience, it’s very rare to see all those attributes in the same person.”

A glowing endorsement for Graham indeed, who spends a lot of her time on sourcing activities and negotiating complex contracts.

Graham was also the procurement lead on a major process to select a joint venture partner and launch a new company to manage operations, engineering and maintenance of BP’s network of 18 fuel terminals dotted across the country. This piece of work subsequently extended to establishing a procurement function for the new company.

Broadening Experience

Prior to BP, Graham worked in procurement roles for British multinational alcoholic beverages company Diageo, owner of brands Johnnie Walker, Smirnoff and Baileys, among many others. These roles took her around the world including to China, broadening her experience significantly as she perfected cross-cultural negotiation techniques. Graham says she learnt about cultural nuances and how they impact upon sourcing, as well as navigating supply chain complexities.

“Living in China was an amazing experience both personally and professionally. I learnt so much in the time I was based there, and was lucky to work on some really exciting projects in a market that was at that time experiencing exponential growth”.

After making three international moves in less than six years, relocating to Melbourne in early 2013 was a lifestyle decision. Graham continued to work for Diageo for a period, though the time difference made working with global colleagues in the UK and US difficult.

“Since settling in Melbourne, I’ve been blown away by the strength of the Melbourne procurement community. They’re a very tight-knit community here, with networking events and Roundtable forums. Procurement professionals here are incredibly supportive, and willing to answer hot topic questions.

“In my experience, there’s just not that same sense of community in the UK due to its size, although I know that given the explosion of growth being experienced by www.procurious.com, that it’s only a matter of time before that changes.”

Strengthening Global Connections

Graham also praised the work done by The Faculty to build the procurement community in the Asia-Pacific region. Next on the agenda for Graham includes strengthening global team connections.

“There’s a lot more that we can do to make the BP team here closer. I want to leverage global team members and manage conversations to bring better value to the Asia-Pacific region. My focus is on being best in class, and I won’t stop until we get there.”

Graham is advocating the use of social network tool Yammer as a valuable way to enable procurement team members from around the world to communicate quickly.

“The intelligence that’s flowing internally through Yammer is absolutely phenomenal. I can post a request for some information for a supplier presentation, and less than 24 hours later a stack of brand collateral on a similar presentation on the other side of the world has been posted for me to access. It’s far more efficient than email.”

The Future Leader of the Year award is sponsored by American Express.

Have you met the Chief Procurement Officer of the Year?

It’s taken less than two years for Johanne Rossi to implement and lead a major transformation at fuel and oil giant Caltex Australia.

Johanne Rossi

Her goal is to transform the company to become the customer of choice for suppliers. What this means is Caltex gets higher quality, a lower total cost of doing business, priority supplier support and access to the latest innovations.

“I came on board to kick off this journey for Caltex procurement at a time when Caltex was transitioning to stay current and create a bright future for itself. We realised that the fuel industry is being challenged with new trends and new competition is entering the market. The entire procurement function and what we stood for as a company needed a complete rethink,” Rossi says.

The process required long-standing internal silos to be broken down so that company teams could integrate and work closer together through the change, challenging the status-quo and doing things smarter.

The confidence and determination she displays in her role with Caltex are some of the key reasons Rossi has been named Chief Procurement Officer of the Year at the 9th Asia-Pacific CPO Forum in Melbourne.

Upon winning the award, Rossi praised the work done by The Faculty’s Founding Chairman, Tania Seary, adding that the innovation and collaboration she’s fostering within the procurement community is vital to ensure the function evolves.

At Caltex, Rossi is responsible for a $1.8 billion spend. She’s led a transformation program of the entire procurement function, leading to a saving of more than $100 million through improved agreements, cost avoidance, process improvement in both Opex and Capex and revenue generation. She is credited with delivering on company-wide strategy, and creating value in key supplier partnerships.

Rossi, meanwhile, came to Caltex after being headhunted for the role. She has a background in FMCG, management consulting, mining, airline industry and also construction with blue-chip companies like Nestle, Qantas and Accenture.

A determined approach to CPO leadership

“I recall during the interview process for Caltex I was asked about whether I was aggressive in my approach and how determined I was. It was a strong indication of what sort of leader they were looking for in the role.”

Rossi has had to rely on these skills to implement far-reaching cost reductions, as well as a major review of what the procurement function encompassed within the company. This has involved re-structuring and organising internal teams in new ways to better partner with stakeholders and supply partners. A global sourcing team has also been set up in Singapore. A procurement innovation manager has been hired to achieve benefits for the company in the longer term, such as finding new, mutual value with supply partners through innovation and implementing efficiencies. The focus of the team is on reducing the total cost of ownership of external goods and services for the company, bringing innovation from supply partners, reducing wastage in dealings with partners, as opposed to just being price focused, says Rossi.

“I believe that a lot of people know how manage and evaluate tenders, but that’s not where we want to spend most of our time – that’s not where the sustainable value lies. As the role of procurement within Caltex evolves, we want to be spending more time in building internal and external relationships, and developing stronger business and commercial skills.”

A supplier relationship program called Catalyst has been developed and is currently being rolled out. It focuses on building mutually beneficial relationships with supply partners, and goes beyond supplier performance management, Rossi says.

“The entire focus for us is to become the customer of choice for our suppliers. To do this, we’ve segmented our supplier base, which consists of about 3,500 suppliers. It’s very difficult to treat each of our suppliers in a special manner, but that’s what we’re working to achieve,” Rossi says.

“We’ve also worked to get closer with internal stakeholders to better understand their growth targets and how we fit into those and bring solutions from our external spend networks. We’ve transformed relationships with our suppliers. We want to have a far more frictionless relationship with them by integrating systems, simplifying the transactional activities, and benchmarking our actions so that our achievements are visible.”

While the transformation process has been under way for more than 18 months, there are still a number of improvement efficiency opportunities that Rossi wants to implement. Conscious of the evolving workforce, she is interested in looking at ways to better organise the procurement function and create new skills to find greater efficiencies, continuously bring new value and anticipate the future, she says.

“My focus is on creating a strong team that will be nimble and adapt to the changing conditions of the market and the company. A team that will develop new capabilities to create its own future, focused on continuously bringing new value.”

“The experiences I’ve had in my career have made me a stronger person. It’s been a tough journey, even though I’m fully aware I have sometimes created my own obstacles. I now want to give back and make the journey more enjoyable for others if I can.”

“Thinking about how you can better support those around you is paramount”, says Rossi. “The world is completely different to what it was a decade ago. It’s incredible to realise how much impact you can have on others’ lives.”

The  2016 CPO of the Year Award is sponsored by Avetta Global.

Smashing through the bamboo ceiling

You’ve heard of the glass ceiling – the male privilege which has historically prevented women from rising to the top of their organisations. Less well-known, however, is the concept of the “bamboo ceiling”.

It refers to the processes and barriers that serve to exclude Asians or people of Asian descent from executive positions in Western-run organisations. The term was coined by Jane Hyun in her book focusing on Asians in American workplaces, Breaking the Bamboo Ceiling: Career Strategies for Asians.

We’ve recently witnessed a cultural shift in our most progressive organisations wherein gender equality in the workplace is now firmly on the agenda. There are a host of agencies such as Catalyst and the Workplace Gender Equality Agency that are working to address the imbalance, although there is a long way to go.

The difference between the glass and bamboo ceilings, however, lies in the fact that while a company may admit to historic gender bias and pro-actively work to address the problem, racial bias remains in the shadows. Cultural diversity quotas and programs do exist, but the statistics at the executive level are particularly damning. In the US, for example, Asian-Americans hold only 1% of board seats. Australia shares this problem: a recent report by Diversity Council Australia revealed that while 9.3% of the Australian labour force is Asian-born, only 4.9% make it to the senior executive level. Similarly, only 1.9% of ASX 200 senior executives are Asian born, despite 84% of surveyed Asian talent saying they plan to advance to very senior roles. There’s a huge disconnect here – if you are Asian in Australia, chances are very slim that you will make it to the top, no matter how ambitious you are.

The consequences are alarming. 30% of Asian talent have said they were likely, or very likely, to leave their organisation within the next year. For one in four, negative cultural diversity factors significantly influenced their decision.

Tony Megally, General Manager of specialist procurement recruitment and search firm The Source, says that while Australian organisations are hiring more Asian-born talent than ever before, there are still significant cultural barriers to overcome.

“We’re seeing a trend where talented Asian professionals feel they have to change, or Westernise, their names in order to make sure their resumes aren’t passed over”, Megally says. “This shows that there’s still significant cultural bias in Australian organisations, although no recruiter would be willing to admit they passed over a candidate due to a hard-to-pronounce name.”

Bias holding back Asians in business – even in Asia
Even more alarming is the existence of the bamboo ceiling in Asia itself. According to an investigation by the Wall Street Journal, locals rise only so far at Western firms, with multinationals still relying on ex-pats to fill top jobs decades after expanding into the region. Tellingly, 40% more Westerners are placed in CEO-type roles in the region compared with other roles.

Dr Tom Verghese, author and founder of Cultural Synergies, says there’s a real lack of Asian leaders in the top echelons of business. “I’ve been working on developing Asian leaders in the market for 12 years”, says Verghese, “but multinationals do have some understandable reasons for using expatriates in Asia. All global companies inevitably have their organisational culture rooted to their country of origin. There is something in having a person familiar with your language and culture as that link with head office. A very human tendency that we need to be conscious of is our sense of comfort – or bias – that ‘same is safe, and different is dangerous’. Companies want one of their own ‘guarding the store’, and there can be advantages to having an outsider in the top job because they can make changes that an insider would hesitate to make.”

Bad for business
Having less diversity at the top can be bad for business. Companies need to reign in their use of ex-pats, in part because they are expensive hires, and having white-majority executives means a lack of understanding of consumer needs, trends, purchasing power and brand positioning. In short, organisations are excluding the very people who know Asia best.

Multinational organisations in Asia need to focus on the following ways to shatter the bamboo ceiling:

  • phasing out the reliance on expatriates for top roles
  • actively developing and grooming local talent for leadership positions
  • training local talent to fill perceived capability gaps rather than looking elsewhere
  • seeking out talent that knows the local market and understands cultural hierarchies
  • setting quotas for local representation in executive teams
  • understanding the difference in what a good leader looks like across different cultures.

“Multinationals need to embrace cultural intelligence and develop a much broader context around what global leadership looks like”, says Verghese. “A facilitative leadership style may be effective in Australia, for example, but a directive style works better in Asia”.

The Faculty Asia Roundtable hosts quarterly meetings in Singapore, where CPOs from the region’s leading organisation meet to share learnings and best-practice. Please contact [email protected] for more information.