Category Archives: Big Ideas Summit

Why Quick Decision-Making is the Name of the Procurement Game

ISM CEO Tom Derry urges procurement leaders not to let perfect be the enemy of good – make decisions and move on!

When Tom Derry, CEO – ISM attended Procurious’ Big Ideas Summit in Sydney this week he came armed with a stark warning for the procurement professionals in attendance. “If you’re the steward of a process, then your job will inevitably be automated.”

Concerned? You should be. Because, as Tom points out, there are an awful lot of procurement roles that fit this bracket. In the very near future, for example, every sourcing event is likely to be automated.

This article is a compilation of Tom Derry’s comments from his appearances at both the London and Sydney Big Ideas Summits in 2018.

Adapting to the pace of change

Procurement has changed dramatically in the past decade, and will change even more so as we move into the robotic era. Tom believes that we’re facing more disruption and a faster pace of change than ever before. “Most of us operate within a context or a framework that we’re familiar with – the established rules of the game. But when the rules get thrown out, how do we operate?

“Being comfortable with ambiguity is a rare skill, especially amongst executives,” he argues. But he reminds procurement leaders not to let perfect be the enemy of good, urging them to: “Make decisions and move on. If we don’t, our competitors will. Being able to move on and know that there are going to be times we don’t win is important. Accepting that as the cost of being in the game and having the opportunity to win is the reality we are in.”

“We can’t anticipate every possible scenario but what we can do is be ready for multiple scenarios and recognise that when we face an unfamiliar scenario we’ve built up some skills and reflexes that we can put into play.”

Of course, as Tom admits, it’s human nature to react in fear to such rapid change. But “there’s always opportunity when there is inherent change and risk.” The skill is in recognising where that opportunity lies. And that, according to Tom, “comes from a deep understanding of what creates value. The source of value might shift but it is still there somewhere.”

Making procurement indispensable

What key skills should aspiring procurement professionals be developing in order to make themselves indispensable?

“The CPO of the future possesses an openness to change, an openness to developing and an openness to sharing.” says Tom.

To improve business-wide understanding of procurement’s value offering it’s vital that procurement leaders allow their people to reach their full potential and move on. “Maybe it’s within your company, and now you’ve got evangelists in other functions who understand the importance of procurement, or maybe it’s outside the four walls of your company. There’s no better reputation to have than being seen as a cultivator of talent, both inside and outside the company”

Tom also highlights the following three skills as critical attributes for procurement professionals.

1. Understanding Markets
“This is about more than just the price,” asserts Tom. “Procurement professionals must understand the dynamics that drive the price whether it’s short supply or supply disruption, new technology that disinter-mediates an old technology.”

2. Strategic Acumen
Procurement leaders must ask of themselves “where am I going as a business? What’s important to my business in the next two to-three years?”

3. Financial Savviness
Procurement teams must accept that they really are driving financial results for their firm. “Sometimes we are a bit too afraid to engage with financial metrics and the traditional income statement or balance sheet. But we must embrace engaging with that income statement and balance sheet in order to understand how what we’re doing in procurement is driving financial metrics such as earning per share and driving revenue growth . We must not focus on metrics that are largely discredited like cost avoidance.”
The future of professional associations
[ISM has] been around for over 102 years and so future-proofing professional associations really matters to Tom. “For 102 years we’ve been very successful but you can’t continue to execute that playbook and expect to still be around.”

“An association used to function as the place where people felt obliged to belong,” says Tom. But nowadays he doesn’t believe procurement professionals feel such a sense of needing to belong to an association just for the sake of belonging. What people need and demand from associations like ISM is “value for money and the provision of tools and skills that enable them to be successful at a critical moment in their career.”

Another key evolving role for associations, according to Tom, is their role as data brokers. “We’re able to reflect back to the profession everything we learn about the profession because we deal with all industries and all geographies, we have a broad view of what’s happening.”

ALL the video content from #BigIdeas2018 Sydney!

Strap yourselves in – we have HOURS of fantastic video content from the Sydney Big Ideas Summit to share!

Missed out on the action at #BigIdeas2018 Sydney? Never fear: you can still catch videos, top speaker quotes and more right here on Procurious. Simply opt in to the Digital Delegate group here.

Here’s a taste of the video content captured on the day.

Live from the sidelines:

Interview with Influence Nation CEO Julie Masters:

Interview with innovation and disruption guru, Gus Balbontin:

Speaker keynotes

David Gillespie, author of Taming Toxic People:

SAP Ariba Regional VP, Henrik Smedberg

There are plenty more videos in the Digital Delegate group – be sure to check it out.

Are YOU The Office Psychopath?

Just how certain are you that you’re not the office psychopath? Perhaps you should review the psychopath checklist.

Image: Rudall30/Shutterstock

The office psychopath is not the bloke found inconveniently near every unexplained axe-murder in your office.  He or she is just a normal person, who just happens to have no empathy whatsoever.  This little deficit means that they are completely incapable of co-operating with others for a common good.

And since modern business depends on groups of people doing exactly that, having them in your office can be seriously wealth endangering.  But are you certain that you aren’t the office psychopath?

Psychopaths are not all the same. Just like the rest of us, they vary in lots of important ways. Some are very intelligent and some are not. Some are good-looking and some are not. Some are men and some are women. Psychopaths are no more immune to cancer than we are and they are no better at football than I am. Well, all right, most of them probably are, but that’s not because they are psychopaths, it’s because I am uncoordinated.

But one handy thing about psychopaths is that their behaviour is predictable.  It’s so predictable that psychologists have developed a checklist which they use to determine whether someone is a psychopath.

The checklist is made up of twenty personality traits. Each of these twenty traits is scored by a psychologist, after a face-to-face interview and review of records, as a 0 (not present), 1 (present but not dominant) or 2 (dominant). The maximum score is obviously 40.

The average person scores between 3 and 6. Non-psychopathic criminals score between 16 and 22. A total score of 30 or over in the United States (or 25 or over in the United Kingdom) is regarded as a positive diagnosis of psychopathy.

Just to give us a sense of how these criteria might be applied, I’ve used my non-existent training in psychology to score James Bond on these criteria and now you can use your non-existent training in psychology (unless you are a psychologist of course) to score yourself.

Case study: James Bond
PCL-R James Bond
Facet 1: Interpersonal
  • Glibness or superficial charm
2 – Is it possible to be more charming than James Bond?
  • Grandiose sense of self-worth
2 – A ‘secret’ agent who uses his own name all the time? – yup.
  • Pathological lying
2 – Aside from his name, he does seem to lie an awful lot.
  • Cunning or manipulative
2 – Obviously part of the job.
Facet 2: Affective
  • Lack of remorse or guilt
2 – James has killed over 350 people on screen so far and it never seems to trouble him in the slightest.
  • Emotionally shallow
2 – I’m sure he really does love all those women he sleeps with.
  • Callous or lack of empathy
2 – Has he ever seemed to experience another person’s emotions? There was that one time when he cried in the shower with Vesper Lynd . . .
  • Failure to accept responsibility for their own actions
1 – Every now and then he does take the blame for stuffing up.
Facet 3: Lifestyle
  • Need for stimulation (easily bored)
2 – We never see him sitting around much, do we?
  • Parasitic lifestyle
2 – Everything seems to be on the expense account.
  • Lack of realistic, long-term goals
2 – Does he have any long-term goals?
  • Impulsivity
2 – He certainly struggles to contain his impulses when it comes to killing and seducing women
  • Irresponsibility
1 – Occasionally he does things for king and country
Facet 4: Antisocial
·       Poor behavioural controls 0 – He is in control most of the time.
·       Early behavioural problems 0 – We don’t know so let’s go with 0.
·       Juvenile delinquency 0 – Once again, we don’t know.
·       A history having conditional release from prison revoked 0 – We don’t know.
·       Criminal versatility 0 – His crimes are sanctioned by his 00 status.
Other Items
·       Many short-term marital relationships 1 – He’s never been married but he has had many relationships that might have ended that way (had the other half not been killed off).
·       Promiscuous sexual behaviour 2 – Is it possible to give more than 2?
Total 27

People who score highly in Facets 3 and 4 are more likely to be found on the wrong side of a prison wall. People who score highly on Facets 1 and 2 are more likely to be your workmate, your partner, a family member or, apparently, a secret agent.

Mr Bond managed a score that makes him a psychopath in the UK but not quite one in the US. The unflappable, focused, but erudite and charming killer that Bond represents is not a million miles from what I would describe as an office psychopath (without quite so much killing).

How did you go?


David Gillespie will present a session on Taming Toxic People at the Sydney Big Ideas Summit on Tuesday 30th October.

If you’d like to join us at the event in Sydney, reserve your seat here: http://www.bigideassummit.com/big-ideas-sydney

If you can’t make it to Sydney but would like to follow the action as a Digital Delegate, sign up here: https://www.procurious.com/big-ideas-summit-sydney

4 Negotiation Lessons From A Kidnap Response Consultant

What do you do when disengagement is not an option? Alexandru Butiri shares four learnings from high-stakes kidnap negotiations that can be applied in any procurement function.

Image: G-StockStudio/Shutterstock

As far as negotiations go, nothing could be more high-stakes than a kidnap negotiation. How on earth do you put a price on a human life?

Sometimes a procurement negotiation can feel like a kidnapping or hostage situation. Think about the times you’ve had to negotiate with ruthless, uncompromising parties. They maximise all of the perceived or real advantages that they have.

Recently, I had the opportunity to spend time with a kidnap response consultant in a kidnap simulation exercise. We were given a case that involved sea pirates and the kidnap of a crew from a container ship. This training stayed with me long afterwards because I found it so relevant to the day-to-day negotiations we undertake in our procurement roles.

Here are four negotiation tips that I’ve learned from the experience:

1. Set up a response team

The first thing that organisations do in a kidnap situation is to set up a crisis response team of experts, which may contain negotiators, experts in the field of operations, psychologists and others.

When preparing for a critical upcoming negotiation, procurement can take the lead in setting up a dedicated team of cross-functional experts within the organisation. Everything should be coordinated through this lean, agile team. Two key tips to remember are:

  • Leave it to experts to negotiate. People with a stake in the game are poor negotiators. Would you let you CEO negotiate directly with your top suppliers who may subject her or him to pressure tactics?
  • Each team member should have a clearly defined role. Not everyone is the lead – and never underestimate the importance of the note-taker.

2. Build resilience to pressure tactics

It’s vital to be aware of pressure tactics, and (more importantly) to be aware of how you react in pressured situations. Sometimes kidnappers will ask for a big payment in a very short timeframe to “solve the issue rapidly”. But it if you give in and pay, this becomes only the first instalment in long line of payments.

In the corporate world, pressure tactics may refer to tight, unrealistic expectations, timeline pressures to make a “quick” decision. Sound familiar? Avoid an amygdala hijack by planning ahead and putting a process in place that will help you avoid making a mistake under pressure.

3. Understand the game and develop a plan around it

Kidnappers’ demands can seem arbitrary, out of control and very unpredictable, which is why kidnap negotiators make it a priority to understand their motivations and hence predict their behaviour and develop a strategy around it.

In procurement negotiations, take the time to research the other parties’ motivations and their commercial construct. Spend more time in planning and less in negotiating for a better outcome. Game theory-based tools can help in modelling various scenarios. This will help to minimise the quick “think on your feet” risk by anticipating various outcomes and knowing your best position in each scenario. Cost analysis and clean sheets will help you understand not only your commercial model, but also that of the other party. 

4. Learn to influence without a mandate

We’re constantly influencing (and being influenced by) others without being aware of it. Expert negotiators know how to use influencing principles to reach their objective.

How do you influence without a mandate? There are a set of influencing principles valid in all cultures and societies that can get you closer to your objective. Notice that I’m using the word “influencing”, not “manipulating”. Here are some of them to get familiar with:

  • Reciprocity
  • Scarcity
  • Peer pressure
  • Authority.

One classic influencing technique is to make a small concession (typically of very little cost to yourself) to put the other party in your debt. A kidnapper, for example, might extend a payment time-frame, or agree on a communication schedule. In a procurement negotiation, learn to recognise when the other party gives away something menial to make you feel obliged.

Procurement professionals can put these learnings to use not only in negotiating with suppliers, but in their day-to-day dealings with stakeholders in their own organisations.

What do you think? Leave a comment below, or get in touch with me if you’re interested in finding out more details.


Are you based in Australia? Join Alexandru Butiri at the upcoming Big Ideas Summit in Sydney on Tuesday 30th October!

The 3 Rules Of Epic Storytelling

The key to creating real engagement – the type of engagement that actually leads to action – is deceptively simple. Learn how to become an EPIC storyteller with these tips from Influence Nation CEO Julie Masters.

 We are, by our very nature, storytelling creatures. It’s how we’ve been connecting since the Stone Age when we sat around campfires sharing our stories as a way of showing vulnerability and intimacy – and we’re hardwired for it.

According to Forbes, storytelling ‘the new strategic imperative of business’. Think about what happens in your mind when someone starts talking about statistics. Now compare that to what happens when they start telling you a story. Immediately you make yourself the lead character – how would I feel if that were me? How would I have responded? And there you have an emotional connection.

Looking at the explosion of social media and reality TV, not only are we storytelling creatures, we’re suckers for real stories – full of ups, downs and lessons learned. In the business world, regardless of whether you’re putting together a pitch presentation, vying for venture capital funding or presenting to the Board – your primary objective should be to get people emotionally connected enough to your message to take action. To help you get started as an epic storyteller – here are my three top rules:

MAKE IT REAL

Stories are so much more impactful when they are real – especially if they happened to you. A speaker I work with once said, “You don’t tell and retell a great story, you live and re-live it”. It’s hard to live and re-live a story that isn’t yours, however, we don’t always have the opportunity to take inspiration from our own lives. I recently coached a CEO who had to present at an industry convention, she needed to share how the digital revolution had fundamentally changed their consumer. Instead of jumping into some hard-core statistics, we took a different approach. She said “I want to introduce you to Emma…”

Emma wakes to the sound of her iPhone alarm. She quickly checks the weather forecast and emails before getting out of bed. She reads the news on her iPad, drops the kids at school while listening to a favourite podcast, orders the weeks groceries online… and on the story went. Every single statistic was covered by Emma’s journey and at the end the question was posed: “Who here has a day that resembles that?” Everyone put up their hand. In under 3 minutes, she had the room convinced that digital devices have completely reinvented our lives. Compare that to 10 minutes spent going through statistics and figures – which is the most compelling?

MAKE IT COMPELLING

Some of us are born with the ability to tell a really great story, but it usually requires three pints and a shot of tequila. For the rest of us (and where alcohol isn’t an option), the answer is to sharpen your skills. The key to a compelling story is energy. If you’re speaking in front of people, start by using your whole body. Remember the ‘live and re-live’ rule – how would you tell this story if you were literally re-living it? How would you use your hands? How would you move your body? How would your voice change? In the most recent studies, body language accounts for a huge 55 per cent of how a message is received, so harness its power and start literally taking up more space.

If your story is going to be consumed on a digital device rather than in person – look at using video as a storytelling tool. With video content predicted to account for 80 per cent of internet traffic by 2019, customers are sending a clear message. Don’t tell me, show me. And if you want me to amplify your story by sharing it – tell me on a platform where I’m already actively sharing content. It might be Snapchat, it might be Instagram stories – look to where your target market is already hanging out and start a conversation.

(If you want to learn more about powerful ways to use your body – Harvard Professor Amy Cuddy delivered an incredible TED Talk on the topic of ‘power posing’).

MAKE IT ACTIONABLE

This is one of the biggest mistakes I see from great storytellers. The story ends – there’s an eager and engaged audience – ready to take action – and then – nothing. The most effective stories are the ones that finish with a simple request.

I recently watched a documentary about the alarming decrease in the whale population. It lasted an hour and, by the end, I was willing to do anything in my power to help. The credits rolled and that was it – no way for me to turn my new-found passion into action. Compare that with the Dolphin Safe label campaign. In this case the action was simple – only buy cans of tuna containing this label. A simple request that has permanently changed my buying behaviour.

I interviewed Daniel Flynn the Founder of social enterprise Thankyou a months ago on my podcast. He was telling me about the beginnings of Thankyou – when he knew the core to it’s success would be to get products stocked by a major retailer. He set up a meeting with 7/11 and – in the two weeks before the meeting – ran a social media campaign asking consumers to do one simple thing. To let 7/11 know that if they stocked Thankyou products – they would buy them. Within one day, 7/11’s social channels were flooded with support and within a few weeks – their products were stocked in 7/11s around the country.

The key to creating real engagement – the type of engagement that actually leads to action – is deceptively simple. Tell compelling stories – on the right platforms – and make simple requests. In a world where we’re overloaded with information. Epic storytelling will continue to be the only key to cutting through the noise.


#BigIdeas2018 speaker Julie Masters is a globally recognised expert in influence, authority and thought leadership. She is the CEO and Founder of Influence Nation and Founder of ODE Management – responsible for launching and managing the careers of some of the worlds most respected thought leaders. Julie is also the host of the weekly podcast Inside Influence.  http://juliemasters.com

Are you in Australia? There’s still time to reserve your seat at the Sydney Big Ideas Summit on Tuesday 30th October. Book now: http://www.bigideassummit.com/big-ideas-sydney

Can’t make it to Sydney? Become a digital delegate and catch all of the action LIVE right here on Procurious. Digital delegates can download a free copy of Julie Master’s ebook: The Influencer Code. https://www.procurious.com/big-ideas-summit-sydney

Big Procurement Questions Deserve Big Answers

We know that procurement professionals like to get the latest intel on the hottest topics from the best in the business – so we’ve sorted you right out.  Your big procurement questions: answered. 

Elizaveta Galitckaia / Shutterstock

What are the surefire ways to speed up procurement processes?

Can procurement ever completely eliminate maverick spend?

Why shouldn’t procurement simply squeeze their suppliers for every dollar they’ve got?

What technology will be the most game-changing for procurement?

What’s the best question to ask a candidate during a job interview?

Procurement questions as big as these require big answers from  people who know their stuff.  Happily, we gathered 50 of procurement’s top influencers and thought leaders in Chicago last month for Big Ideas Summit 2018 and managed to steal a few quiet minutes to put some of them to the test.

Pat McCarthy,  SVP & GM – SAP Ariba

Pat on eliminating maverick spend…

“Procurement can [eliminate maverick spend] but it has to make the purchasing process a destination people want to come to”

Pat on supplier relationships…

“You have to have a great relationship with your suppliers, one where they benefit and you benefit so that making a profit and you fining value in their solutions is the right balance.”

Pat on his favourite job interview question…

“I love to ask candidates about the last book they read because I’m most interested in curiosity – are they curious, what are they curious about – it tells me a lot about them.”

Read more from Pat McCarthy in his blog Procurement with Purpose – Not All Rainbows and Fairytales. 

Doug Leeby, CEO – Beeline

Doug on eliminating maverick spend…

“I think there are certain people, especially executives, who are special and they will always go around the system. If you had the power to say only those that are in the system will be paid then perhaps you [could eliminate maverick spend] but i’ve never seen a situation that had 100  per cent compliance.”

Doug on  his favourite job interview question…

“My go to question is – what are two or three things that you’re really really bad at?  What I’m looking for is A) what they’re really bad  at but more importantly the degree of introspection they have. If they’ve been honest with themselves and done a real inventory of what their areas of development are, what are their weaknesses then they’re somebody I can trust and work with.  If I hear somebody say that they don’t have any then they’re not going to be a good fit for us”

Read more from Doug Leeby in this blog The Rise of the Contingent Workforce… And How to Manage It. 

Daniel Perry, Global Alliances Director – EcoVadis

Daniel on eliminating maverick spend…  

“I don’t think procurement can necessarily eliminate all maverick spend, buyers find ways around any rules that you might put in place.  But if you can provide a very strong vision and mission for procurement and the company in general as to why you are trying to avoid maverick spend, if you can align it to your company’s  sustainability mission or the fact that you want to try and avoid using suppliers that use modern slavery then it gives the buyer another cause for pause before going off and doing maverick spend.”

Daniel on game-changing technologies… 

“Transparency is really changing the way that business is being done these days –  there is much a higher expectation for businesses and their supply chains, who they work with and who they’re associated with so I think the technology around due diligence, around assurance, around using companies that are reputable is going to be a big game changer in the way that companies decide which suppliers to use.”

Read more from Daniel Perry in this blog, Making Sustainable Procurement Work. 

Check out all of our exclusive video content from Big Ideas Summit Chicago via the Digital Delegates group on Procurious. 

Procurious Big Ideas Summit Rolls Into Sydney!

After two smash-hit Summits in London and Chicago, we’re bringing Big Ideas 2018 to Sydney, Australia! Find out how you can get involved.

Did you hear the one about the time an expert on influence, a clinical psychologist and a digital transformation guru walked into a bar?

…  Unfortunately we don’t have the punchline for you, because it hasn’t happened yet. But it WILL happen on Tuesday 30th October at the conclusion of the most exciting #procurement event to hit Australian shores – the Sydney Big Ideas Summit.

Julie Masters, Nicky Abdinor and Gus Balbontin are just three of the incredible speakers that will take the stage in Sydney. Let’s check out the agenda:

Innovate and Disrupt

Electrifying keynote speaker Gus Balbontin will open #BigIdeas2018 with a strong message about how to survive – and thrive – in an ever-changing market. Drawing upon his experience as Executive Director and CTO of iconic Australian publisher, Lonely Planet, Gus will share powerful concepts of change, adaptability, transformation and innovation.

Adapt and Perservere

Jamila Gordon has an incredible story to share about her journey from a refugee escaping the Somalian civil war to the boardrooms of some of Australia’s leading organisations. The former Qantas CIO and current Director of Jayride will deliver memorable messages about the importance of dreaming big, the keys to effective leadership amidst change, and the crucial role of resilience and positivity.

Born without arms, not without attitude! Nicky Abdinor is an expert on doing more with less. A clinical pyschologist and motivational showstopper, Nicky will demonstrate how to create sustainable change in our attitudes, beliefs and emotions.

The Procurement Evolution

One of the most recognisable faces in procurement, Tom Derry is the CEO of the Institute for Supply Management, a not-for-profit organisation with more than 50,000 members worldwide. Tom will join Procurious Founder Tania Seary for a fireside chat about the evolution of procurement, presenting ISM’s latest research into the procurement tasks most likely to be taken over by AI.

Supplier diversity, sustainable sourcing and corporate social responsibility are now recognised as key sources of competitive advantage for businesses around the world. Henrik Smedberg will share SAP Ariba’s thought-leadership into why every procurement professional must procure with purpose.

What will procurement resemble by the year 2030? The future is brimming with AI, cognitive technology, and robotic process automation. This presents an incredible opportunity for the profession, but also a great deal of uncertainty. In this session, delegates will collectively brainstorm the greatest threats and opportunities facing procurement, and identify the crucial skills needed to meet the challenges of Industry 4.0.

Delegates will also hear leadership insights direct from one of Australia’s top Chief Procurement Officers – Thomai Veginis, CPO of Telstra.

Surviving a toxic workplace

Have you ever reported to a workplace psychopath? Have you ever had to manage one? David Gillespie, best-selling author of Taming Toxic People, will take delegates through the strategies that will preserve our sanity in a toxic workplace. David’s articles on workplace psychopaths have been some of the most popular ever published on Procurious!

How do I get involved?

Attending in-person: If you’re within cooee of Sydney, this is your opportunity to be in the room! The Sydney Big Ideas Summit is suitable for highly motivated, forward-thinking, tech-savvy future leaders. If you fit the bill, join us at the Australian National Maritime Museum on October 30th, but be quick – places are strictly limited.

Click here to reserve your seat: http://www.bigideassummit.com/big-ideas-sydney

Become a Digital Delegate: The Sydney Big Ideas Summit will light up social media, spark vigorous discussion and crowd-source ideas for the future of the profession via our Digital Delegate group here on Procurious. Sign up (it’s free!) to follow the action, including live-streamed speaker presentations, speaker interviews and blog articles without ever having to leave your own desk.

Click here to become a Digital Delegate: https://www.procurious.com/big-ideas-summit-sydney

The Rise of The Contingent Workforce… And How to Manage It!

Contingent Labour represents an ever-increasing proportion of our workforce, and it’s not hard to understand why. What is challenging for procurement teams, however, is effective management of their organisation’s contingent workforce… 

kurhan/ Shutterstock

“Depending on whose data you believe, the contingent workforce now makes up from 20 per cent [1] to 40 per cent [2] of the global workforce, with some analysts estimating that it will reach 50 per cent by the year 2020,” says Doug Leeby, CEO – Beeline.

Procurious caught up with Doug ahead of his keynote presentation at Big Ideas Summit Chicago to learn more about the state of contingent labour in the workplace today and to pick his brains on how procurement teams can best manage, and leverage, their ever-evolving workforce.

The rise of the contingent workforce

“It’s easy to understand why contingent labour is growing,” explains Doug.  “Most companies are under intense pressure to improve their bottom line and usage of contingent staff, contractors, freelancers, and consultants is an excellent economic model that can be deployed to both accomplish discrete projects and assist an organisation during surge periods of work.”

“There is an enormous economic benefit in being able to ramp up key areas of the workforce during heavy times and down in lighter times.  Additionally, the enterprise can complete important project work by hiring external experts rather than having to bring highly specialised skills into the organisation.  The short-term costs may appear high but the total cost to production can, in fact, be much lower.”

“Traditionally, companies have looked to the contingent labor population for work that is less strategic, saving that for FTEs.  However, more and more, we are seeing a hybrid approach.  Successful companies in which HR and Procurement are working together have figured this out.  Most of us can’t afford a team of data scientists but we can contract a team for a specific goal.  That’s a very strategic example whereas the contingent workforce can produce extraordinary value.”

The challenges of contingent labour

Employing a large proportion of contingent labour to your organisations presents a whole new set of challenges for both procurement teams and HR. But, as Doug advises, it is specifically in-effective management of contingent talent that will lead to enormous problems and risks for your organisation.

“Companies may be operating out of compliance, exposing themselves to severe penalties.  Additionally, improperly managing this talent can lead to overpayment or under-delivery of results. Metrics and KPIs are critical to ensure that the program is properly managed. Everyone has heard about the now-infamous ‘war on talent.’  It isn’t subsiding.  Not having a smooth-running program to manage contingent labor invariably leads to losing great talent to those who do have solid programs.”

Part of the difficulty with managing contingent labour is procurement’s failure to work constructively and efficiently alongside HR departments.

“Asking the two departments to take time to think about optimising their workforce is a tough ask,” explains Doug.

“This is not a small undertaking nor is it something that can be accomplished in one meeting, or even a series of meetings. It is transformational, which means it requires a significant investment of time and resources, but I believe it will happen as the focus on talent comes into greater view at the C-suite. HR has an outstanding opportunity to look at talent holistically and work with Procurement to ensure that it is sourced and managed properly. This will deliver tremendous value to the organisation.”

Using tech to manage contingent labour

“Technology today is an enabler,” Doug explains.  “However, with the progress being made in AI and machine learning, it will soon become far more than just an enabler – it will become an advisor.

“Technology shouldn’t just be about workflow and reporting.  Rather, it should act more as a subject matter expert or concierge helping procurement and HR to analyse their workforce and make strategic decisions.

“The challenge with this transformation is that it depends on organisations getting all their data into the technology and most still have a way to go. At a minimum, they need get all of the contingent labor into the system – complex, statement-of-work (SOW) based, milestone-based services as well as contingent staff.

“VMS technology can manage not only who the contingent workers are, where they are, what they are doing, and what facilities and data they have access to, but also how well they perform their assignments.”

The future of the workforce

“The workplace and workforce model that has been in place since the Industrial Revolution, designed for stable markets and long-term business planning, is giving way to a new model based on constant change and adaptability,” Doug believes.  We asked Doug to outline what he believes will be the key features of the workforce of the future…

1. Talent first

Over time, I believe organisations will adopt a “Talent First” approach that will be led by HR.  Procurement will remain a solid partner, but HR will need to lead the initiative within the organisation. They will work, proactively, with department heads and finance to figure out the best way to achieve desired outcomes.

2. The human touch

Some outcomes will be handled via artificial intelligence and robotic process automation, but much will still depend on people.  Competitive organisations will focus on optimising their workforce.  They will then focus on how to source this talent holistically.

3. Talent pools

Talent sourcing won’t be done in silos anymore.  Organizations will establish private talent pools and work to attract talent, both FTE and non-FTE, to their pools.  Then, they will be able to hire/engage known talent which leads to a higher propensity for success.

4. Self-sourcing

Companies will make use of functionality like our Self-Sourcing.  In other words, they will go directly to the contingent talent rather than through intermediaries.  This is already being done with freelancers, but we will see more of this with contractors and consultants.

Doug Leeby will be speaking at Big Ideas Chicago on 27th September. To  hear more from him and to follow the action LIVE from wherever you are in the world, register as a digital delegate (it’s free!)

Continue reading The Rise of The Contingent Workforce… And How to Manage It!

Making Sustainable Procurement Work

Now, more than ever, it’s important for the profession to put sustainable procurement at the front and center of business.

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Daniel Perry, Global Alliances Director – Ecovadis believes that the role of procurement is evolving. Evolving from being “primarily focused on cost savings and operational efficiency, to a more strategic and central player in risk management and value creation.”

Now, more than ever, it’s important for the profession to put sustainable procurement at the front and center of business.

“Stakeholders, including end consumers, B2B customers, shareholders etc. are demanding that businesses take responsibility for practices all the way into their value chain. They’re driving transparency and, ultimately, a positive impact by working with high-integrity partners. And it’s procurement teams that are in the ideal place to meet these higher stakeholder demands.”

“The power of the spend that procurement controls (often between 50-70 per cent of turnover) puts procurement at the crossroads of not only risk management and brand protection, but also as internal partners for driving value creation. Of course they want the value chain to be resilient – to avoid interruptions or damage to their company’s reputation – but they also want to provide supplier-driven innovation and support for transformative business models and offerings. –

“Procurement teams focused on sustainability do this by selecting and working with the best suppliers in a way that goes far beyond price, quality and delivery, to include performance around environmental, social and labor and ethics practices.”

The value-add of sustainability programs

It’s all too common to hear an organisation defend their lack of commitment and lack effort in this space. “It’s too expensive”, “it’s too difficult”, “it’s too time consuming” or “we’re just not ready” are typical refrains.

The benefits and ROI of sustainability include not only operational savings, but strategic outcomes. A well-developed Sustainability and Corporate Social Responsibility (CSR) program that is integrated into the company values, and is driven with executive support, can drive key business performance metrics such as:

  • Sales and reputation: A burgeoning wave of consumer sentiment is cresting. More and more customers are comparing the sustainability details of products and services, and it is changing their purchase decisions. Companies making the right sustainability investments can realise a possible increase in revenue of up to 20 per cent.
  • Employee morale and productivity: Sustainability programs can do wonders to improve employee satisfaction, reducing a company’s staff turnover rate by up to 50 per cent and increasing employee productivity by up to 13 per cent. Integrating CSR practices in your company and brand also has a hugely positive impact on recruiting.  If your company has a better sustainability reputation, it often generates more interest from applicants, allowing you to be more selective and choose higher quality candidates.
  • Increased market value: Sustainability programs can increase a company’s market value by up to 6 per cent.
  • Innovation: With more power comes more responsibility…and more options. Many companies are pursuing sustainable procurement strategies in order to find innovative suppliers that will help them differentiate their product or service offering.

Dupont, for example, changed its innovation strategy to embrace a “sustainable growth” mission, saying “If we bring the solutions to the market sooner than our competitors do, we will be more successful in continuing to grow the company.”

Making sustainable procurement work

“One of the biggest challenges companies face in sustainable procurement is measuring and understanding current performance within their supply base, in the context of global standards and benchmarks. It can also be challenging to engage suppliers as collaborators in their mission. And to get there requires a mix of expertise, the right technology, change management and process integration backed by executive commitment.

“First, the organisation needs a clear mandate from the executive team, which makes the sustainable procurement program an integral part of the function’s mission and values. This is embodied by investing in change management and communication programs and taking steps towards implementation and company-wide adoption.

“Success also requires reliable, agreed-upon indicators for sustainability performance that both buyers and suppliers can understand, and that are actionable. Many companies collect lots of unvalidated data, but buyers rarely have the CSR expertise or time to validate or interpret it – and this is where a standardised, evidence-based, and analyst-generated rating – like EcoVadis provides – comes into play.

“Additionally, CSR criteria and performance indicators must be integrated across the procurement function and include the use of clear and enforceable codes of conduct, contract clauses and tender criteria. Buyers need to believe in and leverage these criteria in their supplier development and sourcing activities.,  And, procurement groups should agree on, measure and reward on the critical CSR / sustainability KPIs in the same way they track cost savings or other key metrics. These all drive adoption in the organisation and make sustainability inherent to the procurement role.

“Increasing the benefits to a single company, a mutualised platform can make it much easier for suppliers to share the same scorecard results with all their customers, enhancing transparency and collaboration to drive network effects for maximum improvement and impact.”

Daniel Perry will be speaking at Big Ideas Chicago on 27th September. To  hear more from him and to follow the action LIVE from wherever you are in the world, register as a digital delegate (it’s free!)

Read more on this subject from EcoVadis in  Beyond Compliance – The 5 Pillars of sustainable procurement value creation

The Three Pillars of Procurement Risk Management Strategy

What are the three essential factors for  effectively addressing the shifting conditions of sustainability risks and opportunities?

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This year has provided plenty of examples of why organisations need to better manage or participate in more effective sustainability and CSR initiatives to better manage risk, and purchasing and supply chain managers are finding themselves at the forefront of these initiatives, as keepers of the risk management keys. While hot button issues like worker safety and reputation risk are only increasing in importance, transparency and sustainability are reshaping consumer demand, and intelligence trumps data in supply chain risk management.

Luckily , this  emphasis on sustainability and CSR is breathing new life into purchasing and supply chain teams, giving them a renewed sense of urgency to establish  or expand supplier assessment programs and position themselves as greater strategic assets to their organisations and industries.

After reflecting on the variety of new supplier sustainability programs EcoVadis has helped launch or evolve, our experts have discovered three key factors as essential for effectively addressing the shifting conditions of sustainability risks and opportunities.

1. Program Reach and Depth

When setting up a supplier monitoring system, the assessment methodology should cover all key themes in sustainability and Corporate Social Responsibility. It’s common for homegrown or initial assessment programs to start by tackling just one issue, like environmental sustainability or human trafficking. To truly have an impact and effectively manage risk, however, the system should cover criteria across environment, labor and human rights, ethics/anti-corruption, and the supplier’s own sustainable sourcing practices.

Geography is also a significant factor when designing and implementing a program. Most modern supply chains span over 100 countries, so the assessment methodology should be appropriately adapted to cover this spread, engaging and supporting suppliers in local language wherever possible and taking into consideration variances in regulations and culture, at least for the top regions.

Finally, the size of the suppliers/third parties you are working with is another important dimension to examine. Many of them will be small- or medium-sized enterprises (SMEs) that are not listed on any stock exchange, and with little required reporting or public information. The monitoring system and methodology should be adapted accordingly to measure these SMEs.

2. Seamless Integration: Change Management and Processes

To make sure your teams and partners have the best chance of success with a new or changing sustainability and CSR initiatives, the methodology and processes used to both collect data and adopt performance indicators must be integrated into current, familiar processes and workflows.

There are two elements to this:

Change management

It is essential that the supplier sustainability monitoring solution vendor be able to support you and your team in the required change management program that will drive adoption of the initiative. This could include consulting on strategy and rollout, program branding, communications and supporting content development, training, support/helpdesk, onboarding services and reporting.

System and process integration

A key enabler to maximizing the impact of sustainability criteria on purchasing behavior is to integrate the assessment system into the current supply chain management platforms such as e-Sourcing, e-Procurement, CLM, SRM or similar platforms.Supplier monitoring solutions that come with an API that can be used to integrate the CSR indicators to other platforms are a huge advantage here. This way, you can give buyers and category managers access to current and complete sustainability data within the tools they are using today.  

For a deeper dive into these criteria and checklists, get this free Ebook covering “Five Essential Criteria For Selecting A Supplier Sustainability & Risk Monitoring Solution.”

3. Creating Measurable Value

No matter how thorough or amazing the assessment solution, it will only be effective with supplier participation. Here are a couple key ways sustainability monitoring programs can provide value to suppliers, which is vital to engagement and the ultimate success or failure of the initiative:

Alignment with relevant labels, certifications and standards

Suppliers will always care about compliance and a core feature of any monitoring system is to ensure suppliers adhere to the relevant global, regional and/or category-specific labels, certifications or standards. Examples might include FSC for fiber-based products, REACH registration of chemicals in Europe, or EnergyStar for appliance makers in North America, and so on. There are thousands of such labels, certifications and standards across the 120+ countries touched by global supply chains. A comprehensive supplier assessment program must take into account all  relevant assessments and maintain an annually updated list in each major region/country. In doing so, suppliers can ensure that their efforts are “valorized” in the monitoring process, making it more efficient for them to participate.

Actionable results, benchmarks and feedback

The results of a sustainability assessment should be digestible and actionable by both the buyer’s side (procurement and supply chain, EHS&S, risk), but also for the supplier.  Visually exhausting spreadsheets of checkmarks, or a list of documents from a supplier is often hard to understand and thus not actionable by a purchasing or category manager. These roles want instead to understand how suppliers’ sustainability performance compare to their peers and what the norm for the industry or geography is. Also, being able to also clearly understand performance over time is another vital part of any system. Solutions that make the short list should provide actionable results and indicators, benchmarks for comparing performance, and feedback on areas of improvement.

Continue reading The Three Pillars of Procurement Risk Management Strategy