Category Archives: Generation Procurement

Why TMCs Need a Dramatically Different Sales Approach

Ever notice how Travel Management Companies (TMCs) have a hard time selling their value?

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This article was first published on WordPress.

It’s not a complicated value proposition.  “We’ll help you book travel at low prices and help your travellers on the road, so you’ll save money and sleep better.”

That’s a pretty easy benefit statement to grasp, right?  So that’s not really the problem.

Two Big Problems

TMCs compete on the wrong metric, and they sell to the wrong people.

First, the metric they compete on is price, namely the transaction fee.  Price may be the metric of choice for the procurement crowd, but it is the worst metric for those TMCs who add real value.

On to the second problem. TMCs sell to travel managers and procurement managers.  Is it traditional? Safe? Expected? Sure, but still wrong – in this way:

Travel managers are very important stakeholders, and they need to have a clear understanding of how one TMC differs from another. Same goes for the procurement managers – these folks are charged with negotiating contracts that deliver real value to their organisation.

And yes, it’s hard to imagine how a TMC could win much business by ignoring either of these VIP stakeholders. So it’s not about ignoring or minimising these key parties.

Find the VVIPs

Instead, it’s all about selling to the VVIP stakeholders – the men and women who manage big travel budgets – the folks who are fully accountable for making the tough decisions about whether or not to trade down to a harsher travel policy, knowing they’ll lose good people by doing so.

These are the people TMCs need to sell to – the guys and gals who own the travel budgets.  It’s their necks on the line for making good decisions about sending Sally to Sydney in Coach or in Business. They wrestle with the tradeoffs of higher airfares and hotel bills in return for more loyal road warriors.

Which brings us back to the first problem.  Instead of price, TMCs must sell the value of their expertise.  But not in the current/classic/me-too way that passes today’s RFP 101 test.

Sell the Bigger Picture

Instead, TMCs must sell their ability to deliver broader business value.  Value that goes way beyond that measured by traditional travel metrics.

TMCs must learn to sell the kind of business value that P&L owners care about.  Hint – it’s not about your best in class online adoption rate.

TMC execs, you gotta think and then sell in terms of travel impact on metrics that P&L owners care about.  Of course they worry about their travel budgets.  So showing how to conserve them is necessary – but it’s not sufficient.

Focus on the Total Cost of Travel

The other part of the equation is that of the impact of travel on road warriors.  All that wear and tear has a cost – a real, quantifiable and significant cost.

So it’s simple – TMCs need to show travel budget owners how good their TMC is at helping them to minimise the total cost of travel.  Not just the supplier costs, but also the real, quantifiable and significant costs of traveler wear and tear.

Getting a company to minimise the combination of these two costs is true travel program optimisation.  Any other claim about “We’ll optimise your travel program!” is typical TMC marketing hooey.

The Better Approach

Let’s make this easy.  If you’re a TMC sales exec, and you have a prospective account in mind, find out who manages the biggest number of their road warriors.  Say it’s Joe, their EVP of Sales. Here we go:

You get into Joe’s business.  “So, Joe, which of these issues regarding your road warriors are you having any trouble:  Retention? Recruiting? Productivity? Health? Safety?”

The beauty is there is no dead-end answer.  If Joe calls out one of these issues, off you go down the trail of explaining the options for improving that part of the traveler’s experience.

If Joe says “Nope, we’re good on all that”, then you’ve got license to ask about old-school ways of controlling travel costs, and hopefully bring up a few new-school ways to keep things fresh.

The point is you, the TMC sales exec., get to – need to –  have a much more relevant discussion about how travel is impacting the guy’s business.

This is a much better way of framing the value of a TMC. You’ll be talking to, and quietly selling, to the real decision makers, and I’ll bet dollars to donuts that they never ask about your price…at least not in that initial conversation.

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Scott Gillespie is the Co-Founder and Managing Partner at tClara, helping travel and procurement managers build more valuable travel programs, as well as the author of Gillespie’s Guide to Travel+Procurement.

Five Gems from Eva Wimmers’ Innovation Workshop – Part 2

The Faculty’s Hugo Britt recently attended a one-day workshop with Eva Wimmers, former CPO of Deutsche Telekom, on innovation in Procurement.productivity-innovation

Last week I shared the first two of five ‘gems’ I took away from Eva Wimmers’ thought-provoking working on Innovation in Procurement. Read on for the remaining three insights from this world-class CPO:

  1. Make time to discuss innovation with your “ideas suppliers”

As part of her “dialogue rich” approach to Procurement, Eva recommends that category managers make the time with suppliers to talk exclusively about innovation. That means there’s no talk about contracts or pricing; just ideas and brainstorming. Visit your suppliers and make an effort to personally meet the brains of the operation.

This means you’ll be making valuable direct contact with engineers, programmers and other boffins and can chat with them directly about their ideas. Importantly, making this contact will start them thinking about what they can do for you. The key, Eva tells us, is to think of your vendors as “ideas suppliers”, make time to discuss innovation, and always be willing to listen and learn.

  1. Diversify your supply base to include SMEs and startups

Deutsche Telekom is an enormous organisation, and before Eva’s tenure as CPO it had fallen into the same trap as many similar-sized companies: big only deals with big. This mindset is driven by concerns that only large organisations have the capacity to meet your needs, while risk-mitigation policies around team size and insurance are often put in place that limits Procurement’s ability to engage with smaller organisations.

Eva reversed this mindset at DT by declaring that innovation Procurement requires vendors of every size and shape. The benefits of working with SMEs and startups include:

  • faster provision of products and solutions
  • new idea generation (“ideas suppliers”)
  • customised and specialised solutions
  • getting a glimpse of future disruptive technologies
  • app solutions to fix your legacy IT problems
  • cost control and cost savings
  • savings in personnel costs
  • relationships with individuals at the supplier.

In Eva’s words, “We do not care how big an organisation is, as long as both the solution and the organisation are scalable and financially solid’”. She uses Dropbox.com as an example of a small organisation with less than 50 staff that wouldn’t even have shown up on many organisations’ radar, yet now it has world-wide take-up.

  1. There are risks, but they can be managed

We know that small vendors are often faster, more flexible and more cost-effective, but what are the risks? Eva says that CPOs need to equip their teams to work with SMEs and startups to overcome the following negatives:

  • Higher financial risk than big suppliers
  • Risk of takeover slowing down the process
  • Smaller account teams
  • Often no international linked account team and support
  • Under-developed processes
  • Lack of scalability
  • Increased risk of bankruptcy through illiquidity
  • Change of key people endangers product
  • Continuity of solution depending on engineers and programmers/individuals.

Eva worked with her team to mitigate the risks of interacting with SMEs and startups at DT by implementing the following:

  • Requesting financial due diligence including detailed revenue overview. Invite the CFO to explain the finances in detail to ensure full transparency.
  • Requesting an overview of concurrent projects with other customers.
  • Using incentives rather than penalties to ensure you don’t cripple your suppliers.
  • Spending significant time on explaining your product needs and definitions as SMEs may be unused to the needs of large organisations.
  • Requesting counter-proposals from vendors, such as “What would you change to save 30 per cent on cost? What would you change to gain speed?”
  • Locking-in the availability of key individuals from the vendor teams by name in the contract.
  • Contractually requesting key engineers’ availability by name.
  • Including a first right of refusal to buy company (in case of bankruptcy) – sometimes buying is cheaper than migration to any supplier (talk to your legal team about insolvency law).
  • Defining termination rights in case of a supplier takeover.
  • Reducing the amount of interfaces at the supplier.
  • Defining one overall point of escalation at the supplier.

In summary, Eva argues that CPOs can’t afford to limit their supply base to large organisations if they wish to drive innovation. Use risk mitigation strategies to protect your operation and focus on having the right level of contractual protection for each innovative supplier. Make the time to convince your risk-averse stakeholders of the benefits of working with smaller suppliers of products, solutions and disruptive ideas.

Procuring innovative products and profiting from the ideas of innovative companies requires behavioural change in your Procurement teams. Concentrate on driving early involvement, deeper knowledge of your products and vendor landscape, closer alignment with business stakeholders, and true dialogue where you see eye-to-eye rather than just pressing for the best price.

Innovation needs to be driven with and by smaller new companies as much as by larger incumbent organisations. In short, it’s about having “an idea that pays”.

The 99 Names You Can Call a Procurement Professional

And can you guess why #30 is my favourite?

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This article was first published on LinkedIn.

It would appear (some) people in Procurement are very sensitive about their job title!

So, what’s the difference between job titles?

Not a lot by the looks of it; call yourself what you want when you want! No doubt, with many, it is an image issue. With others it’s trying to capture the essence of the job.

The fascination is the likely impact on non-procurement people who must be confused about the nature of the procurement role. Some see it as an administrative role, not engaged in any policy or strategic decisions. Others see it doing what Procurement is told to do by others who can select suppliers, negotiate and deal with contracts far better than Procurement.

A Definitive Answer

If you are looking for a definitive answer as to what to call a Buyer you will be seriously disappointed.

There isn’t one.

I’ve been doing research into job titles for a project we’re involved with – and checked our client database and a quick google – and came up with these 99 different titles. Proliferation is the word, or perhaps obfuscation (an increase in the muddying of the waters – did you see what I did there?).

You might see why I like #30 so much ;)!

Set out below is a range of job titles used by Procurement professionals. As you’ll see there’s no commonality in them and they may clash with role descriptions other employees have who have nothing at all to do with Procurement. If you’ve come across any other Procurement job titles, let me know or add them in the comments.

That’s if you can get through the 99 here…

  1. Head of Procurement
  2. Chief Procurement Officer
  3. Head of Category
  4. Procurement Director
  5. Resourcing Director
  6. Category Acquisition Director
  7. Procurement Lead
  8. Resourcing Lead
  9. Category Acquisition Lead
  10. Procurement Partner
  11. Resourcing Partner
  12. Category Partner
  13. Category Sourcing Lead
  14. Category Sourcing Partner
  15. Procurement Manager
  16. Resourcing Manager
  17. Category Acquisition Manager
  18. Sourcing Manager
  19. Category Sourcing Manager
  20. Strategic Procurement Lead
  21. Head of Procurement Operations
  22. Head of Procurement Strategy
  23. Chief Category Officer
  24. Sourcing Specialist
  25. Resourcing Specialist
  26. Procurement Specialist
  27. Procurement Operations Manager
  28. Head of Procurement Projects
  29. Vendor Manager – Procurement
  30. Buyer
  31. Senior Buyer
  32. Sourcer
  33. Principal Procurement Specialist
  34. Service Delivery Manager
  35. Procurement Business Partner
  36. Resourcing Business Partner
  37. Procurement Consultant
  38. Executive Buyer
  39. Executive Procurement Manager
  40. Manager – Procurement
  41. Executive Category Sourcing Manager
  42. EMEA Executive Sourcing Leader
  43. Global Program Manager – Employer Branding
  44. Principal Delivery Consultant
  45. Strategic Procurement Manager
  46. Resourcing Advisor
  47. Sourcing Advisor
  48. Category Acquisition Advisor
  49. Lead Buyer
  50. Head of Projects – Category Acquisition
  51. Procurement Marketing Manager
  52. Resource Consultant
  53. Graduate Buyer
  54. Procurement Advisor
  55. Programme Manager
  56. Programme Lead
  57. Manager – Category Systems
  58. Internal Buyer
  59. In-house Buyer
  60. Global Category Selection Manager
  61. Corporate Buyer
  62. Technical Buyer
  63. Corporate Procurement Lead
  64. Technical Procurement Lead
  65. Category Buyer
  66. Lead Sourcing Consultant
  67. Executive Category Acquisition
  68. HR Manager – Procurement
  69. Lateral Buyer
  70. Lateral Procurement Manager
  71. Deputy Head of Procurement
  72. Director – Executive Procurement
  73. HR Purchasing Specialist
  74. University Purchasing Consultant
  75. Hybrid Buyer
  76. Direct Buyer
  77. Indirects Buyer
  78. Direct Procurement Specialist
  79. Category Sourcing Lead
  80. Category Scout
  81. Relationship Manager
  82. Director – Strategic Resourcing
  83. Category Identification Manager
  84. Procurement Strategy & Planning Manager
  85. Procurement Team Lead
  86. Procurement Team Leader
  87. Supplier Relationship Manager
  88. Category Attraction Consultant
  89. Procurement Officer
  90. Procurement Consultant
  91. Category Specialist
  92. Category Consultant – Executive Search
  93. Procurement Agent
  94. Procurement Executive
  95. Procurement & Engagement Manager
  96. Project Purchaser
  97. Category Attraction Specialist
  98. Lead Category Scout
  99. Resourcing Associate

If you think I’ve missed any of your favourites (and no doubt I have), please let me know in the comments – it would be good to grow the list and get your view.  Always learning!

 

4 Tips for Managing Your Supply Chain Career

My first hands-on experience serving as a link within the supply chain came very early in my career.

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This article was first published on Beet Fusion.

After flipping burgers for a year at age 15, I decided to take an afternoon job at a garden centre chain in California. When school was dismissed, I would head to the nursery to water the plants.

While watering, I decided to read all the labels and learn as much as possible about the wide array of greenery and flowers the company sold. After a while, I was able to help customers find the plants they needed and design the optimal set-up for their gardens. This led to a promotion to category buyer, and eventually associate manager.

I enjoyed my time working as a buyer, but it was very stressful. Excel sheets from various growers covering availability cluttered my desk. On-site supplier visits, daily truck deliveries with fresh product and quality control were all tasks I had to juggle. Then there were the external factors such as weather and competition. On top of all that, I was studying full time for my bachelor’s degree in Business Administration.

Working as a link within the supply chain is no easy task, especially in today’s fast-paced, operating environment where customers want everything yesterday, and competitors are waiting in the wings for a supply chain slip-up. That being said, it is safe to conclude that a career in supply chain can be rewarding and exciting, especially with buzzwords such as industry 4.0, smart factories, same-day-delivery and digitisation floating around.

By no means, at the ripe old age of 30, do I consider myself a career expert, but perhaps these four tips can start a conversation on the topic and help someone find their way up (or onto) the supply chain career ladder:

1. Get your feet wet

For me, this phrase was literal. While watering the plants at the garden center, I had no idea I would be promoted to category buyer (but my socks were soaked by the end of the day). This experience, however, piqued my interest in supply chain, and I haven’t looked back since. In essence, I would encourage anyone thinking about a career in supply chain management to just jump in.

There has never been a better time to get involved in this fast-paced, innovative industry in need of some fresh talent. Your first job will not necessarily be your dream job, but it is important to use any and all job opportunities as a learning experience.  A great place to start your supply chain career and learn the ropes would be in a buyer or material planner role.

2. Be a sponge

Whether you are new to a company or have 30 years of experience at the same firm under your belt, there is always a chance to learn something new. A quote I like to keep in the back of my mind is, “Experience isn’t everything: it is possible to do something incorrectly for 30 years.” In essence, it is important to approach your career with an open mind.

Soak in your experiences like a sponge. If you have a bad manager, learn how you do not want to act when you reach a management position. If you are in management, be open to ideas from your staff. Always be looking for ways to expand your knowledge and expertise.

Within the supply chain industry, this could come in the form of master’s or bachelor’s degree programs or various certifications available to industry newcomers and professionals. Another exceptional method for expanding knowledge is engaging in online communities and being active across social media. There are some excellent sources of information that offer great insights into supply chain strategy.

3. Be the change you want to see

Nobody wants to be around a complainer. There is certainly a time and place for constructive criticism, but constant complaining and griping could create tension within teams. Instead of joining the complainer choir, start putting the change you want to see in motion.

There are many stakeholders along the supply chain within an organisation. Production teams strive for the efficient use of equipment. The sales team makes short-term delivery commitments, but the purchasing department didn’t buy enough material for the production process, so the delivery has to be pushed back. All of this is happening while top management is wanting to see a reduction in costs and increased liquidity. Therefore, warehouse managers are cutting back stock, but this will certainly have an impact on availability. With everyone working toward their own goals, it is no wonder tensions run high along supply chains.

In order for things to change, someone needs to be the first person to reach his or her hand across the table. Instead of complaining about the procurement manager who once again ordered too few screws, as the production manager, try inviting your colleague out to lunch to discuss some of the planning issues. Start working on developing goals that can be achieved together and that bring the company forward as a whole.

4. Know your operating environment

Managing a career can look a lot different depending on where you are in the world. After 6 years in the garden centre industry, I decided to study for my master’s degree in Germany (my wife is German). During my studies, I became fluent in the German language and got acquainted with the German culture. I quickly noticed some major differences.

While studying for my bachelor’s degree in California, everything seemed like a competition and a lot of emphasis was placed on individual achievement. In Germany, it was all about team work (at least at the university I attended). Another difference I noticed, while searching for a job in Germany after my graduation, was that more emphasis was placed on education and certification. In Germany, it seems as though you can get a certificate for everything. It is these accolades that employers want to see, whereas in the U.S.A., more emphasis is placed on practical experience.

You don’t have to be working in a different country to apply this tip. Understanding your operating environment is just as important when you are working for an international company. If you are sent to check-in on a certain supplier overseas, spend some time getting to know the culture before you arrive.

Closing Thoughts

When it comes to career advice, there is a lot I need to learn, especially since I have approximately 75 per cent of my career still ahead of me. Furthermore, there is still a lot to learn when it comes to supply chain management.

However, based on my experience to date, I have found that an eagerness to learn something new on a daily basis can go a long way toward advancing a career. Being a positive change agent who is willing to tackle new challenges will also open many doors along the way. And finally, understanding your operating environment will help you avoid embarrassing moments, and may even land you a job overseas.

Buyers Under the Duvet

In this first of a series of five articles, I consider the bedrock skill of our profession and consider whether we rely on it too much. feet-684682_1280

Firstly, some readers may be CPOs, Senior Category Managers, Global Vendor Managers or other similar title, for the purposes of this series of articles I’m simply referring to us all in our derivative term; buyers.

My experience of having worked closely within procurement teams of many small and large organisations – some award winning, others developing, is that I observe that the primary focus of buyers is principally on one thing. It is ironic therefore that my belief is that it is this same one-dimensional focus that holds back many procurement teams from tackling the age-old problems in our profession.

A Story of Failure?

These are the topics which we read about with countless repetition in professional publications; failure to be heard at the top of the organisation, failure to attract and/or retain top talent, failure to be seen as adding significant value, failure to be seen as anything other than a support function.

While many readers may argue with some of the topics on the list as incorrect for your own organisation, my experience is that there are very few, if any, procurement departments that could state with authority that they are not working on any of the topics set out above.

The buying process is governed by process, which in turn is often governed by a system – this is especially true within the public sector. This list of do’s and don’ts constrains swift action and creative thinking – all of course, “for the good of the organisation”.

Or is it?

My assertion is that, while necessary, the existence of process constraints makes it ever easier for buyers to remain in their comfort zone – to remain under the warm embrace of their duvet, too scared to poke a foot out in to the cold air outside of “the process”. Instead, they beat a hasty retreat back to the core competence of procurement namely, negotiation, which delivers an unwholesome, self-satisfaction of their own procurement targets, but which leaves stakeholders needing more.

Often, too, it is very blunt, poorly executed negotiation in which buyers seek their solace. Under the comfort of the negotiation duvet some buyers perform superbly well using all manner of techniques before and after the main negotiation event. Others flounder a little before concluding swiftly with a mediocre result for both parties – often beating a single item – normally price, before leaving both parties under-fulfilled.

Satisfying others, first.

For the high performing buyer, in order to resolve the exemplar list of topics that I set out in the first paragraph the shackles of “process” need to be made invisible when viewed from the businesses perspective.

A challenging yet empathic approach is required throughout the often ignored early and latter phases of the procurement process to avoid prematurely jumping “under the duvet” to negotiate the wrong thing(s) with the wrong supplier(s). Buyers too often spend too little time on managing specifications and the drivers of demand, before beginning to negotiate great deals, the value in which quickly ebbs away following poor contract management.

It is the job of the high performing buyer to invisibly navigate through the quagmire of procurement process and do’s and don’ts and still deliver fantastic levels of satisfaction to the business – leaving them desperate for more interaction; to robustly challenge what the business thinks it wants and differentiate this from what it needs in order to add value.

Leaving Savings Behind

It may surprise many of you to learn (as it did me) that perhaps the most effective procurement team I worked within had no savings targets. Upon being asked “so how do you show your value?” they answered, “why do we need to show value?” A telling answer later complemented by the explanation that their business (a division of a global brand with annual revenues of €500m+, by the way) would never enter in to a project of any kind without procurement being represented.

The impact of their previous success was a department unhindered by spurious savings targets. Instead the interaction between procurement and the business was truly mature with both parties seeking to maximise the satisfaction of the others. The procurement personnel were intrinsically part of the business who together strived for value creation.

Please don’t misconstrue my message. I am not suggesting that readers run back to the office and tear up their savings tracker or process manual, at least not yet. But I am suggesting that careful consideration is taken to ensure you are correctly targeting the complex, multi-dimensional objectives of the business and not simply self-satisfying.

To badly coin a well known quote (Hunter. S. Thompson) and song lyric (The Killers) are you business? or, are you procurement?”. And do you know how to develop the behaviours of your team to being not merely a process driven cost cutter, but a creator of value? 

Jim Willshaw

Jim Willshaw (MBA, MCIPS, MIIAPS) is an experienced procurement professional acting as a consultant, speaker, coach and trainer to leading organisations all over the globe.

10 Career Influencing Women in Procurement – Part 2

A couple of weeks ago I was lucky enough to attend the ProcureCon Europe ‘Women in Procurement’ Breakfast in Berlin.

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The conversation over breakfast got me thinking about the women who have supported and influenced my career. In my previous article, I talked about the first half of my career, pre-children. This week, I’m focusing on the influencers I have met since I had my children.

Once I had children, managing my career became a lot trickier. For me, work simply couldn’t be my number one focus anymore – I had some other major commitments that were consuming my heart and my head (they still do!).

As I didn’t have any relevant role models for my situation at the time, I found my own path for managing my career (which could be the topic of another story…maybe even book!).

The Value of Mentoring

I believe there are some real strategies to mentoring, which I captured in this blog. I have always reminded people you don’t need just one mentor, you can learn from a whole array of people. It’s not only learning about what you want to do, but the kind of leader you don’t want to be as well. You can learn both ways.

Becoming an entrepreneur meant I chose a very lonely path full of second-guessing and self-doubt. For me, the women around me have provided me with the “courage to change” and have given me the confidence and self-belief to stay committed to my goals.

There are of course many fantastic women in Procurement – many of which I haven’t had the fortune to meet yet. The women profiled here have had an influence on my career and professional development.

Here are just five more who have left a lasting impression on me.

1. Eva Wimmers

Eva is the closest thing I have met to a procurement rock star! She has enjoyed an extremely successful procurement career at Deutsche Telekom, including being on the Supervisory Board for T-Systems International, and a Board member for both BME and Procurement Leaders.

She is an inspiring speaker on supplier collaboration and innovation. Most importantly, she has relentless energy, direction and is always forward thinking – all things I think are exactly what the profession needs.

2. Dapo Ajayi

Dapo’s enthusiasm for procurement, and her commitment to ensuring her leadership team embraces social media to win the war for talent, makes her an inspiration to me right now. Mostly because I am hoping all CPOs will soon start to understand the power of social media for the profession.

I am also a fan because Dapo comes from a non-procurement background, and has fallen in love with our awesome profession! I love it when others see the scope and opportunity for procurement.

3. Georgia Brandi

Georgia was recently named the CIPS Australasia Young Procurement and Supply Chain Management Professional of the Year 2015, and, less than two weeks later, was then awarded her Juris Doctorate in Law (that is, of course, on top of her Bachelor of Arts AND Business).

Georgia’s energy and commitment to her career and professional development is a huge inspiration to me (and I hope many others). She is investing in herself, learning what she can and kicking goals at work. She is absolutely one to watch in the future!

4. Visna Lampasi

Visna is one of the most successful procurement professionals in Australia. She is on the CIPS Global Board of Trustees and has been recognised as CPO of the Year. Her success has been built on an uncompromising focus on process and results.

I meet with Visna as often as I can, to talk about developing the profession and how to win the war for talent.

5. Lisa Malone

Lisa and I have worked together for almost 7 years and are now focussing on building the Procurious community together. Lisa encouraged me to start blogging and is now working on convincing me to write a book. Once again, having someone in your corner pushing you on is absolutely invaluable.

In my presentations on social media, I recommend that every executive find himself or herself at least one ‘millennial mentor’. Lisa is my millennial social media mentor and has been the single biggest influence on me “getting out there” and sharing my thoughts for (hopefully) the benefit of the procurement universe!

One Final Challenge

And finally, another challenge for you. Who are you looking to for cues on how to best manage your career? If you don’t already have a mentor, why not start looking today?

To close, a quote from Sheryl Sandberg, “Lean In: Women, Work, and the Will to Lead”:

“The more women help one another, the more we help ourselves. Acting like a coalition truly does produce results.”

Five Gems from Eva Wimmers’ Innovation Workshop – Part 1

The Faculty’s Hugo Britt recently attended a one-day workshop with Eva Wimmers, former CPO of Deutsche Telekom, on innovation in Procurement.

Innovation1

How many of the CPOs you know would you describe as ‘glamourous’? Not many, I bet. That’s because Procurement still isn’t seen as a particularly glamorous career, despite having all the ingredients that should make it so: world travel, high-stakes negotiations, and rubbing shoulders with C-level decision-makers.

Procurement’s understated profile is most likely a legacy of its back-office beginnings, but things are starting to change. Eva Wimmers, the confident, sharp-dressing, eminently capable former CPO of Deutsche Telekom, is glamour personified. She’s a striking departure from the stereotypical ‘back office’ CPO, and in my opinion the profession needs more leaders like her if it’s going to attract talented Gen-Y professionals looking for an exciting and fulfilling career.

Innovation in Demand

It’s a cool spring morning at The Faculty HQ in Melbourne, and I’m balancing a cup of coffee in one hand and a muffin in the other while chatting with fellow attendees at Eva’s workshop on innovation in Procurement. I’ve met senior and mid-level professionals from National Australia Bank, Realestate.com.au and even from Perth-based Rio Tinto, who have flown an impressive 2700km to join us today.

Why make the trip during one of the busiest times of the year? I’m told there are two main reasons – firstly, insights from the stellar career of someone like Eva are not to be missed, and secondly, Australia’s largest organisations are increasingly turning their attention to innovation in Procurement.

Eva is a knowledgeable and highly successful modern Procurement leader. During her time at Deutsche Telekom, she was responsible for overseeing €27 billion in purchasing value and managed 1500 employees across 50 countries. The workshop today came about as a result of a unique opportunity – Eva is finishing up at DT and moving into an exciting new role (currently hush-hush), meaning she had a rare gap in her calendar.

This is very good news for Procurement professionals in Australia – normally we have to travel overseas to hear from international Procurement stars of Eva’s calibre, and the prospect of an entire day with Eva generated a lot of excitement amongst Australian CPOs and their teams.

In this two-part blog post, I’ll cover five gems that I’ve taken away from Eva’s workshop, namely:

  1. Innovation is an idea that pays
  2. Procurement innovation is both a philosophy and a program
  3. Make time to discuss innovation with your “ideas suppliers”
  4. Diversify your supplier base to include SMEs and startups
  5. There are risks in working with startups, but they can be managed.
  1. “Innovation is an idea that pays”

This quote was the catch-cry of the day. It’s the basis of Eva’s philosophy around Procurement innovation, and it should be the foundation of every CPO’s business-case to invest in startups.

Eva illustrates how Procurement professionals work on the frontlines of innovation. We talk to vendors all the time, and if we know how to listen, this means that we are exposed to a constant flow of new ideas. Other functions, such as IT or even R&D, will only go looking for innovation when they start a new project.

Eva makes the distinction between incremental and disruptive innovation, or “evolutionary” versus “quantum leap” ideas. She illustrates the difference with a description of tall ships; with a millennium of incremental innovation behind them, early nineteenth-century sailing ships were the epitome of luxury and humankind’s harnessing of wind and weather – but they were made obsolete within a few decades by the disruptive technology that led to ocean-going steamships. Our challenge is to keep as informed as possible to try to predict the next big disruption steaming towards us over the horizon.

Eva’s message is to seek out “ideas suppliers” in the form of SMEs and startups. Even if 80 per cent of their innovations are irrelevant to you, the 20 per cent could be absolutely crucial to your business’ competitive advantage.

  1. Innovation in Procurement is both a philosophy and a program

Eva describes her two-tiered approach to driving innovation at DT through changing both the culture and the process. She created cultural buy-in through:

  • Introducing the tandem system – procurement staff are partnered with someone from the functional side (such as an engineer) to encourage the sharing of ideas, leading in turn to innovative thinking.
  • Cross-functionalising by having a variety of functional expertise, professions, backgrounds, disciplines, hierarchies, nationalities and cultures working in self-directed teams.
  • Encouraging Dialogue-rich Procurement – Eva encouraged her staff to greatly increase their communication with both internal stakeholders and with vendors. You’ll find that vendors in particular are eager to share their ideas if you are willing to listen and learn.
  • Celebrating accomplishments – if someone in the team has an innovative idea that leads to a positive change, publish it in a newsletter and share it with your whole team. This will help people realise “I can be innovative too”.

Eva changed the existing process to encourage innovation through:

  • Having vendor meetings to discuss innovation exclusively.
  • Holding regular internal meetings on innovation to plan three years ahead.
  • Diversifying the supply base to include SMEs and startups.
  • Introducing an innovation review panel.
  • Creating an ‘Easy Department’ program by cutting new contracts down to a 5 pages.
  • Incentivising Procurement-driven innovation through a suite of KPIs.

Stay tuned for Part Two of this article on Eva Wimmers’ Procurement innovation workshop.

Why More Women in Senior Roles Makes Sense

Should supply chains, and organisations as a whole, be working harder to bring more women into senior roles?

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Recent headlines, research and reports have firmly placed the spotlight on the subject of gender equality. The hack of Sony communications earlier this year very publicly lifted the lid on the lack of equality in salaries for world-famous actors and actresses.

It led to Jennifer Lawrence writing a passionate article on her feelings upon finding out how much less she was being paid than her male co-stars.

Procurement and supply chain are just a couple amongst a multitude of professions in which women are fighting for equality, not just in wages, but also promotion opportunities and organisational responsibilities.

The Business Landscape

Women constitute more than half of the total global workforce, but the figures are much lower when it comes to their presence in the boardrooms of the large organisations. Although recent reports in the UK showed that 26.1 per cent of boardroom positions on the FTSE 100 are held by women, overall there are just 10 per cent of top supply chain executive positions in Fortune Global 500 companies held by women.

Why is this?

There is some evidence that it can be down to perceptions of the roles. Research conducted by SCM World found that the majority of men (63%) and women (75%) believe that the natural skillsets of women differ from those of men, and that these differences are advantageous for supply chain management.

However, other research suggests that women are actually better equipped than their male counterparts for roles within the supply chain. Leaving aside the idea that women think less of themselves, what could be other reasons.

Held to Higher Account?

In many cases, female executives are both better qualified and better educated than male peers. A report from the American Management Association showed that:

  • Women are 33 per cent more likely to earn a college degree than men
  • 36 per cent of women (versus 28 per cent of men) in leadership positions hold STEM (Science, Technology, Engineering, Mathematics) degrees
  • Female executives attended colleges and graduate schools that were ranked higher on average than the schools attended by men

In spite of this, it has been suggested that female CEOs may actually be held to a higher standard than male leaders, which causes them to be passed over and left behind when advancement opportunities arise.

Just 4.8 per cent of Fortune 500 CEOs are women and only 1.1 per cent earn $150,000 or more per year, compared with 4 per cent of men.

Women in Supply Chain

And this is where organisations are missing a trick. Attracting and retaining women within the supply chain sector is a realistic, common sense solution to many countries’ human resources challenges.

Add to this the fact that companies in the top quartile for gender diversity are 15 per cent more likely to have financial returns above their industry median, and you are looking at a recipe for success.

The benefits are further extolled in this webinar from Kinaxis and supported by Women In Supply Chain (WISC).

In the Real World

The imbalance is borne out when considered against industries and sectors in the UK, but, according to some members of the Procurious community, there may be a change occurring, however slowly.

Helen Mackenzie, Head of Exchequer Services at Comhairle nan Eilean Siar, argued that procurement and supply chain aren’t that different from other professions. Traditionally, and still in some areas, women still have to appear to be 20 times better than their male counterparts in order to progress.

However, the balance is shifting in Scottish Local Government, where 17 of 32 Heads of Procurement are female. Helen also went on to say that expectations of procurement are shifting, which could play into the hands of women, as the profession focuses more on trust, relationship building and communication, something that women often have the edge over their male counterparts.

Juliet Frost, a freelance procurement expert, also hasn’t experienced any discrimination where she has worked, although pointed out that only once has she worked in an organisation where there was a female above her in the hierarchy.

From Juliet’s point of view, it’s important to work for an organisation that values diversity across the board, not just gender related. This will permeate into the procurement team and allow for a greater balance.

Procurious GM, Lisa Malone, believes that the issue for many women is not just balancing motherhood with work, but returning to work full-time after a long period away from the workforce.

Women are joining the supply chain profession in almost equal numbers now, Lisa says, but the numbers drop off in the early-30s demographic, usually associated with family raising. It’s important for organisations to help these women return to the workforce and get back on a career trajectory.

‘Returnship’ Programmes

Some organisations are now actively helping women (and men in some cases too) return to the workforce after an extended, voluntary career break. These ‘returnship’ programmes (a term trademarked by Goldman Sachs) are higher-level paid internships, offering flexible working over a 10-12 week period, often alongside free childcare and mentoring for returnees.

Organisations including Deloitte, JP Morgan and RBS all offer similar programmes – you can find a good list here. The programmes have been credited with helping to bring women back into work, with a good percentage of women offered full-time roles once their ‘returnships’ have concluded.

And finally…

We’ll leave the last word to Women in Supply Chain, with this infographic on how they suggest addressing the growing labour shortage in supply chain management in Canada.

It just makes sense, doesn’t it?

WISC Infographic

A Better Way to Manage Road Warriors, and Their Costs

You road warriors are a hardy bunch, aren’t you?

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This article was originally published on WordPress.

You spend over a hundred hours a year on planes, take trips on short notice, cross too many time zones, lose sleep, gain weight, get up way early and come home late, and give up more than your share of weekends.

All while being squeezed by travel policies that leave you shaking your head, wondering if the people who approved these policies really, truly understand how hard it is to be a heavy-duty road warrior.

The Travel Friction Concept

Let’s call all this wear and tear you’re taking on “travel friction“.  You get it, right?  The more trips you take, the tougher those trips are, the more you get burned out by being on the road.

Fun fact: Real road warriors, those in the top 10 per cent of all travelers, absorb close to 50 per cent of all travel friction in the average firm.    So you really are in a separate class when it comes to work-life balance challenges, and not surprisingly, for higher risk of quitting your job.

It’s this risk of attrition, of getting burned out on travel and quitting the road, that is the key to a better way of managing all you road warriors.

Old-School Procurement Is The Problem

Procurement folks must address the travel category.  The spend is too big, and the purchase practices too important, for them to ignore.

The old-fashioned way of procuring travel has been – and sadly, still is – to focus intensely on the travel supplier’s costs.  Hammer that airfare down, demand a lower hotel rate, haggle over a buck or two a day for the rental car.

At the same time, procurement knows that travelers need to abide by travel policies that further reduce travel supplier costs.  Things like taking extra connections, flying 12 hours in coach, or staying at inconvenient 3-star hotels…all the things that you road warriors really hate.

Procurement has been doing it this way for twenty years. Call this the “transaction cost” model of managing travel.

New-School Procurement Is the Solution

All we have to do is get procurement to look at the total cost of travel, not just the supplier’s portion.  Specifically, the cost of travel friction.

These travel friction costs come in a few forms: lost productivity, higher health costs, more safety incidents, and the killer – higher turnover.

The good news is that these travel friction costs can all be quantified.  The better news is that procurement folks already get the “total cost” concept.  They use it all the time in other cost categories.  Think computers or cars, and their total cost of ownership.

More Than Just Tiered Travel Policies

Many companies give their frequent travelers a more traveler-friendly policy.  Maybe you get business class on long haul flights and an airport lounge membership. Woo-hoo.

There are many other ways for your firm to reduce the amount of travel friction you take on.  Consider these options:

  • Recognition.  Wouldn’t a simple thank you from a senior exec go a long way to taking the sting out of that last month of road warrior hell you went through?
  • Less Travel.  What if your firm had a travel friction warning light that started to flash when you’ve reached a certain level of travel? Or a proactive way to share your travel duties with a colleague?
  • Better Trips – Safer, Healthier, Easier.  What does “better” mean to you?  Shouldn’t your firm at least know your particular preferences?
  • Better Travel Culture.  You’re a road warrior, not a Navy Seal. Maybe your firm needs to promote a more traveler-tolerant culture.  Some companies do this by discouraging need-to-travel meetings on Mondays and Fridays.
  • Travel Counseling.  A few of you are very likely addicted to traveling.  You and your firm should recognize this, and put some practical options on the table.

Road warriors are a very valuable segment of any firm’s workforce. It’s well worth reducing the friction in this important part of the business machine.

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Scott Gillespie is the Co-Founder and Managing Partner at tClara, helping travel and procurement managers build more valuable travel programs, as well as the author of Gillespie’s Guide to Travel+Procurement.

10 Career Influencing Women in Procurement – Part 1

As a woman in procurement – what would you do if you weren’t afraid? Would you ask for more from yourself, your partner, your boss, your colleagues, your suppliers?

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Probably. So, why don’t you? Is it down to a lack of confidence?

Confidence is “in alarmingly short supply” for women.

According to the book ‘The Confidence Code’, the main reason women have lower confidence is because they tend to lack self-belief. The book’s authors, Katty Kay and Claire Shipman, found that women need to stop worrying about failure, stop second-guessing themselves, and put less emphasis on how others might perceive them.

Women need to stop worrying that they cannot succeed but instead start taking action and risking failure. By not believing that you can succeed, you are less likely to even try.

Embracing Your Ambition

This week I was a guest at the ProcureCon Europe ‘Women in Procurement’ Breakfast in Berlin. The very impressive Melani Wilson Smith chaired the breakfast, pushing the attendees to share their experience and get the most out of our short time together.

Melani is a perfect example of a successful woman in procurement. Currently Chief Procurement Officer for North America & Global Biscuits at Mondelez International, Melani has worked globally for other big names such as Pfizer and Proctor & Gamble, while still being an active member of her community in New Jersey.

The conversation over breakfast touched on the common challenges of influence and engagement. One of the key messages that resonated for me was that women in procurement needed to “create the courage to embrace your ambition”.

Women are ambitious and work hard, but they need the confidence and courage to follow through and create the career they deserve.

My Influencers

While I listened to the dialogue, I couldn’t help thinking about and reflecting on the women who have supported and influenced me during my career.

I see my career in two distinct halves – before and after I became a mother. This week, my focus is on the first half of my career

Before I had children managing my career was pretty straightforward. I got a great education, worked hard, kept my bosses happy (well, most of the time) and was focussed on continually presenting new ideas and ways to get things done.

These are some of the women who made a big impression on me, as well as having a major impact on my future.

1. Christie Breves

Christie was my first female boss in procurement. She had a demanding focus on detail, which was a very important learning point for me – the devil is in the detail and your numbers need to be indisputable.

Her formula is evidenced by her successful career – more than eight years as CPO at Alcoa, and now more than two years at US Steel. Christie had a young family when I worked for her, but – of course (as you do pre-children) – I didn’t even think about this at the time.

Christie is a legendary woman in procurement – and anyone who gets the chance to meet her should take the opportunity.

2. Charmayne Rose

Charmayne may be surprised to make this list, but if it wasn’t for her telling me (in no uncertain terms) over lunch when I was 33, that I had better get started on having children, I would probably not have considered this for another decade!

I was too focused on my new company, and having too much fun to focus on something so serious. But her conversation prompted me to research the ageing process and its impact on fertility. I got the message and two years later had my first son.

While many of you might be thinking “too much information…”, this is a very important timeline for career women to keep their eye on. It is too easy for time to slip by!

3. Cindy Dunham

Cindy naturally assumes the leadership role wherever she is operating. She listens and respects the debate, then provides the ‘mile high’ strategic view, and considers solutions that will benefit the community.

I have always admired the way Cindy delegates and empowers her team. This allows her to manage her calendar to focus on the things only she could do. As women, in particular, I think we try to take on too much, and that then often means that we are over-stretched and under-resourced.

Cindy travelled the world with her role with Rio Tinto and still managed to keep the home fires burning.

4. Sue Steele

Sue is the most ‘statesman-like’ female leader I have met. Sue has succeeded in a very male-dominated field – engineering services – running the Operations team before moving into Procurement.

She reports to the CFO and is on the governance board for Jacobs’ major global clients. She now has two grown children – the stories of which have always given me great perspective!

Whenever I meet or speak with Sue she has an amazing way of making me feel very empowered, which is always much appreciated!

5. Antoinette Brandi

Antoinette is currently a Member of the Victorian Government Procurement Board, and has held some very senior procurement roles in tough male-dominated industries – defence, mining, contracting, and railways.

She was also CEO of the IPMM, before CIPS came to Australia. As well as being Georgia Brandi’s Number 1 mentor (aka mum), Antoinette has always supported me.

It is hard to think of something I have done that hasn’t in some way been acknowledged by Antoinette via an email, a call or a LinkedIn message. Priceless.

My Challenge to You

I’ll leave you with a challenge for the coming week, before the second half of my list is published.

Have a think about the people who have influenced your career – think about why that is, and what you have done to act on their advice. Can you offer this advice to someone you know?