It doesn’t matter what technology your organisation adopts, or what digital transformation you endure; procurement relationships will always be essential for success.
At the Big Ideas Summit 2017, we once again challenged our thought leaders to share their Big Ideas for the future of procurement. Chris Cliffe discussed why relationships really matter.
The world around us is changing. You can’t turn anywhere these days without hearing the phrase ‘Digital Transformation’. Everyone’s writing about technology and the race to automate and use augmented intelligence in business. IBM’s ‘Watson’ is soon expected to be in regular use within procurement teams across the globe. But, the reality is that the vast majority of organisations, be they Private, Public or Not-for-Profit Sectors, are only at the start of this adventure.
Of course, it is crucial that our organisations do focus on adopting technology. The role of the CIO, for example, is at least equally important to that of the CPO. Yet the technology focus cannot be at the expense of the human focus.
Relationships really matter.
In fact, in the next decade or so, relationships will increasingly be the differentiator as ‘process’ and ‘transactions’ become automated and ‘value adding’ activities become the sole human focus.
Buyer Supplier Relationships
It might seem an obvious place to start but buyer supplier relationships are so often overlooked. I think we can, in the main, agree that a ‘tender’ process in itself delivers zero value. Value for Money can only be obtained from good performance of the resulting contract. If we put ‘procurement’ theory to one side for a moment and look at ITIL Service Management, it clearly states that “good people can make a bad contract work, equally, bad people can make a great contract fail”.
Having the right relationships, between the right people, on both sides of a contract is how you get best value. Investing time and effort into building, nurturing and maintaining good relationships between buyer and supplier teams will facilitate far more value from contracts. It doesn’t pay to let and forget!
Let’s assume a big problem happened last week.
Scenario 1: You call your account manager to complain, having not spoken to them in months, because ‘someone’ messed up.
Scenario 2: You call your account manager that you spoke to recently. You know they’ve just returned from their first family holiday in five years. They’ve had an awful couple of years for various personal reasons and, in fact, they’d even booked a restaurant you recommended. Whilst they were away, a junior member of their team was covering and they may have dropped the ball.
In both scenarios, the same issue has arisen and it needs fixing. But I suspect the majority of us will approach those two calls differently and outcomes from these calls may also be different. Think about whether you could start both calls with the phrase, “How can I help you fix this problem?”
Stakeholders: An increasingly over used, catch-all term to dehumanise people who we go to work with day in, day out. Investing time and effort into establishing relationships with the key individuals within our businesses will pay you back in spades. Ask questions. Be interested. Get under the skin of the challenges your colleagues face. Don’t be constrained by the perception of silo’s.
We must always remember why we do what we do. The purpose of Procurement is not to further the cause of procurement. Of course, a very happy side effect of an effective, modern, highly engaged and enabling procurement team is that the reputation of the profession will increase to everyone’s benefit, but that cannot be the motivation. The role of Procurement is simple. It exists to facilitate and enable the organisation(s) it supports in achieving its vision, mission and goals.
In human terms, we are there to help our colleagues enjoy work through enabling their success and in achieving their objectives. This is a differentiator between good and bad procurement in my mind. Establishing relationships with stakeholders based on a genuine interest in understanding their challenges and seeking to support them overcome obstacles proactively, will lead to game-changing relationships rather than relationships based on reactively promoting procurement process, policy and procedures.
Career Development and Credibility
Relationships really matter for professional development, career development and credibility. Take a look at the Deloitte CPO Survey 2017, or any recent recruitment agency survey. There will always be analysis pointing out how the procurement profession is dogged by a lack of soft skills and how there’s a real talent shortage with regards to interpersonal capabilities. I believe we all need to take responsibility for learning and development; it is up to individuals to own the preparation for longer term career aspirations.
Relationships really matter with those in your network. The aim isn’t to collect as many LinkedIn connections as you can, but it is to connect to as many people as you can. Connect in this sense means to talk, ask, listen, learn, impart knowledge and most importantly follow up on conversations. Being market aware and having your finger on the pulse is an incredibly important part of being a credible professional in terms of managing contracts and suppliers and with developing productive relationships with colleagues.
Investing time and effort into building, nurturing and maintaining productive relationships really matters.