Category Archives: Generation Procurement

Samurai & Cowboys – Cultural Perspective on Management Styles

Whether you support or detest change, it is happening. But how much impact do management styles in different cultures have on change?

East vs. West Management Styles

Do you have a Smartphone? Do you use Google? Do you use global internet sites to get information on clothes, food, travel, music, research, work opportunities? These sites influence people and bring countries closer together, especially countries that share a lot of trade and commercial contact.

These factors influence what you and your colleagues may see as the norm. You are open to influence whether you know it or not, to leading thoughts, persuasions, technologies, arguments, speeches, TV adverts, products. Nothing stands still.

Management Styles – East and West

Could all of this affect management styles? If you compare Japan and the USA there are, of course, differences. However, countries will find it difficult to maintain existing management cultures in the face of fast-paced change, and as technology makes the world smaller.

There is a belief that you can group countries with similar management styles – the USA, UK and Australasia in one group, and Japan and other East-Asian countries in another. Traditions, national roots and leadership are different, and this difference should be cherished. But could this have a negative effect on business?

When a multi-national company starts operating in Japan, Directors “back home” will see differences in culture. A Japanese firm, starting operations in the USA, is going to experience a culture shock when they hire local staff. Because of this, management styles cannot stay the same.

So which culture is better and will things change?

Values, Norms and Variances

There is a widely held belief that traditions and leadership styles in each country lead to the development of styles. National values, norms and education are instilled from an early age. These can lead to national variances such as:

  • Power of leaders to influence citizens
  • Pressure on a corporate employee if an error is made, and the outcome
  • Time scale to make decisions in a company, and by whom, a person or a group

Most will agree that management styles in some counties have changed over the years. People believe if you treat your staff well, they will perform better and go the extra mile. This is seen by customers, who tell others, and the company prospers. The ability to complete work to ‘best endeavours’ is initiated or halted by management – despite their wish to ensure good company performance.

But what or who influences the Directors and the Managers?

In a ‘Top Down’ style, the manner of the CEO is reflected across the organisation. But the leadership of a country can be influential too. Comparing Japan and the USA again, both have similar approaches and beliefs when it comes to market share, commerce and winning business. But there are variances that have evolved, which are more effective in their own regions.

Japan and the USA have traditionally strong trading links. Is there an argument for finding a cultural ‘middle ground’, where the best of both cultures are adopted by both parties in order to prosper? Is it a case of change and adapt, or fail commercially?

Power Distance

Current legal systems and education in each country lead to different responses by managers. Let’s take the concept of leadership and ‘power distance’ – the level of acceptance by society to the distribution of power. In some countries, an order might be met with “You must be joking!”, whereas in others the response will be “Yes, sir”.

It is said that ‘power distance’ and the process of decision making are inversely proportional. So, the more a person is deferential, the more that person looks for consensus before any decision is made.

If the citizen feels less influenced by their country or company leader, or traditions, they can make decisions faster, are able and prepared to take risk, and feel empowered to innovate and adapt rapidly to market forces.

In these countries when the economy thrives, the countries’ leaders tend to take the credit themselves, while, where there is a consensus or group response, leaders congratulate the group and see this as a mutual success.

Risk Avoidance

There are further differences when looking at risk taking or uncertainty avoidance in the USA and Japan. In Japan, the concept of a ‘job for life’ means there is traditionally high uncertainty avoidance.

In the USA, people will generally take these decisions, so when the company thrives, the employee receives the praise. Even if it turns out to be a bad decision, and the employee loses their job, a new employer may look favourably on the courage and innovation in the decision.

People don’t get it right every time – Thomas Watson, former Head of IBM, said in 1943 that there was a “world market for maybe five computers”. But if we don’t try, we will never succeed. The key is balancing the risk.

Long-term vs. Short-term

Gadget makers take ideas and concepts from multiple sources in order to make a better product, so too can management style benefit from taking the best from other models.

In any industry, there are people who are in for the long-term, and others who are in only for the short-term. In Japan, companies look at the long-term picture, and employees at the long-term ‘loyalty’ to a company, while in the USA, there is more focus on the short-term and individual careers.

However, this is changing in Japan, with candidates publishing Portfolio Career CVs showing skill sets, and not necessarily their list of corporate positions.

To take a simplistic view, we have one culture where short-term planning, individual confidence and easier movement between jobs, while the other focuses on long-term planning and thinking, collective confidence and the job for life.

But in 2016, the tide is changing, and a global perspective is required. Where the prevailing culture will end up is open to discussion but change is constant and more important, the pace of change is exponential – the rate of change is getting faster.

The Early Bird Catches the Procurement News Worm

In a fast-paced world, being first with the procurement news can mean the difference between being in the know and being left behind.

First with procurement news

Read Tania’s first article on the importance of networking and your personal brand here.

Too many procurement professionals spend their careers in closed networks. They stay in the same profession, peer group, company, or industry, associating with people they already know. In these safe, closed networks, it’s easier to get things done because we’ve built up trust, and know all the shorthand terms and unspoken rules. It’s comfortable because the group converges on the same ways of seeing the world that confirm our own.

Life in a closed network is easy.  It’s safe.  It’s comfortable.

But unfortunately these gentle words are not synonymous with career advancement. If you want to keep growing and get ahead in your career, you need to be challenged, and be a challenger, within your ‘tribe’. You need to be first with the procurement news, be able to quickly digest the information, and interpret what it means for your organisation.

Open or Closed Case

When we were designing Procurious, the team had a lot of heated debates over whether we should have an open or closed network. That is, should it be closed exclusively to highly pre-qualified procurement professionals, or open for the whole world (aka. recruiters, consultants, sales professionals) to join.

Luckily my team convinced me to keep our network open, and it’s been an important part of our success story.

When you become part of an open network, you are exposed to multiple groups. Unlike your peers in closed networks, you gain access to unique relationships, experiences, and knowledge. You get to hear from thought leaders and industry experts, and learn about their diverse opinions on the hot topics in procurement.

As a result of being exposed to thinking outside your ‘tribe’, you gain a more accurate view of the world. In fact, some research shows that people with open networks are better forecasters than people with closed networks.

Leverage Your Networks

While Procurious members may not be the first to hear new information, they can be the first to introduce information to their network. As a result, they can leverage the first mover advantage.

For example, as a member of Procurious you may be the first in your company to become aware of a major supply chain disruption. Although the whole Procurious community is aware of this event, you could be the first person in your company to share the procurement news and start planning your response.

What’s more, you could use your network to gain further information on the disruption, and leverage their expertise to help solve the problem. You will be amazed how the community responds with alternate suppliers, solutions, on the ground contacts! In our Discussions section you will see there has already been hundreds of questions asked, and thousands of answers provided by procurement professionals all around the globe.

Let’s face it – procurement issues are now global business issues. The nature and complexity of procurement and supply chain challenges mean that they are too big for one person alone to solve.

To come up with the best ideas we need many, diverse perspectives.  By involving more views, life and career experiences, demographics, and cultures, we can access these perspectives. Through our Procurious network, we increase the pool of talent and therefore ideas that are working to solve problems.  Let’s call it collective problem-solving.

Collective Muscle

If our procurement network on Procurious gets into the habit of collective problem solving by supporting each other by sharing the procurement news, and with information and advice, it will soon become an instant reaction – a community reflex. And if we keep repeating that action, then we will build community muscle.

So when bad things happen, or when we’re looking for solutions to big problems, we turn first towards thinking that we’re going to solve it in a community way, through our network!

Apparently there are more than 3,500,000 procurement professionals in the world. But there are probably less than 500,000 who we can readily identify.

Many procurement professionals are working in isolation, unaware that there is a whole universe of knowledge and professionals available, to help them do their jobs better and learn more effectively.

There are so many problems we can solve together, so much we can do to promote our own careers and the profession – if only we use the power of connection and leverage our network – there is very little that we can’t achieve!

This blog is part of a speech Tania made at the eWorld Procurement and Supply Conference in London on 2 March 2016. Stay tuned for further insights from Tania and the Procurious team from eWorld.

Manufacturing in China? Here’s What You Need to Know

Manufacturing in China might be a cost-effective solution, but it can bring with it inherent risks to global brands.

Manufacturing in China

For procurement professionals, that means trying to understand the cultural nuances that dictate how to do business in China.

Stories of issues have appeared in the media, including now-defunct Australian boot manufacturer Bennett’s Boots blamed a Chinese factory for trying to reduce its margins for the collapse of the entire business. While early orders were perfect and business grew, subsequent orders were cheap imitations, with 80 per cent of the container load of boats un-sellable.

Company founder Amanda Bennett told BRW magazine that: “Success to the Chinese is trying to do things behind your back and get away with it. I don’t mean that in a derogatory way, it’s a cultural thing.”

Navigating the Cultural Landscape

But there are companies that specialise in helping foreign companies wanting to manufacture in China navigate the cultural landscape.

Chris O’Halloran is the founder of Striking Group, a project management consultancy, and has been to China dozens of times to build the bridge between China and Australian companies since launching in 2008.

O’Halloran admits that the Chinese do business by going in cheap and then trying to recover the margins by cutting corners, hoping no-one notices.

When manufacturing in China, the biggest trap Australian companies fall into is sending a drawing to China, and asking for 10,000 products to be manufactured without enough instruction, he says.

“To the Chinese, if it looks the same to them, then it is the same. They’re not trying to be nasty, it’s just the way they do business.

“Having said that, I’ve been to factories in China completely automated where you can eat off the factory floor that are far beyond anything we’ve got here.”

New Wave of Challenges

China has emerged as a manufacturing powerhouse, with immaculate robotic factories and far greater capability to manufacture luxurious goods rather than just mass produce cheap items.

However, the country faces new challenges. According to this report by McKinsey & Company, these include increasing wages, more complex value chains, and consumers growing more sophisticated and demanding.

Australian companies trying to do business with China also often fall down by thinking they’re dealing direct with the manufacturer, when in fact there’s two or even three middle men shielding the manufacturing operator, O’Halloran explains.

“The Chinese like to keep their cards close to their chest, so often you don’t really know if you’re dealing with the manufacturing facility or not. This is very common in Australia, and not the best way to do business.

“However, no-one can build to scale as well in Australia. They are light years ahead of many major manufacturing hubs around the world, and often Australian companies don’t realise how big these Chinese companies are.”

Fostering Relationships

O’Halloran shortlists a number of factories for his clients and helps them foster a relationship with the business owner and arranges guided factory tours. He also conducts spot checks for clients.

“We’re looking for things like, do they have a quality control process in place, and how do they buy their goods, and whether Fair Trade Agreements are in place. We always try to establish if they’re managing the entire manufacturing process in-house, because sometimes they’ll outsource some of the work to a sweat factory down the road without telling you.”

He also says that the Chinese are not great at design, but they’re amazing at copying and reproducing something, and mass producing it. Smaller scale runs are also increasingly cost-effective. Australian companies also need to understand cultural nuances, such as the importance of hierarchy to the Chinese, he adds.

The Chinese are also very superstitious, and their lucky number is eight, he says.

“The Chinese will go out of their way to find the number eight in their business dealings. They even design buildings with eight floors or eight windows in a room, and other things based around feng shui,” O’Halloran concludes.

Top Tips for Manufacturing in China

  • Don’t try and navigate the Chinese manufacturing industry alone, hire an expert.
  • Explain what you want in as few words as possible. Don’t leave anything open to interpretation.
  • Always start slow, on a small scale.
  • Understand cultural nuances and the importance of hierarchy.
  • As a sign of respect, when you accept a business card with two hands, and look at it carefully. Put the card on the table in front of you, never in your pocket.

 Source: Chris O’Halloran, Striking Group.

Is Your Personal Brand Picture Perfect?

Employers are increasingly using social media to hunt down their next employee. So what’s your personal brand saying about you?

Your Personal Brand

Today, a staggering 90 per cent of UK employers use social media to find employees. As we all know, a large proportion of roles are never formally advertised, with employers preferring to rely on references and people they “know” to fill important roles.

An important secret you need to know from the recruitment industry is about ‘passive’ candidates. These are people who are not actually applying for jobs, but are seemingly happily engaged in their current roles, as opposed to those who have actively applied for the role. These passive candidates are actually the most valued candidates.

So, the question is how will these silent employers “know” you, if you aren’t out networking, connecting and promoting yourself on social media?

The Importance of Networking

I had the perfect example just this week when a headhunter called me for some recommendations for the Head of a Digital Procurement Marketplace. It was a very senior job, paying in the high $200,000s.

I have worked in this profession for more than 15 years and am very committed to networking. I am fortunate to have met thousands of procurement professionals, have more than 5,000 connections on LinkedIn, and am an active participant in the 12,000 strong Procurious community.

Now, when I was asked for recommendations, who do you think came to mind first? Someone I met ten years ago when eMarketplaces were all the rage? Or someone I saw sharing information on LinkedIn or Procurious earlier in the day? The latter, of course.

In order to help you understand the importance of your network and online profile in helping you get that next job, let me share how my mind worked when trying to think of some suitable candidates.

Standing Out

I started thinking through the thousands of events and meetings I had attended and personalities that had stood out – I came up with a few names.

Next, I started reviewing my online social networks. First I found people who had the right skill set and experience, then I started looking at people’s profiles in depth. This was quite a lengthy process, so I used some filters. This is who didn’t make the list:

  • People without a photo on their profile.
  • People with limited connections (sorry, to me, its hard to think how anyone in procurement could have fewer than 500+ connections).
  • People whose work history hadn’t been updated or was very scant.
  • People who, when I googled them, weren’t mentioned anywhere, hadn’t published anything, or spoken at an event.

If people met any of these filters, I wasn’t going to recommend them. I would imagine many other senior people like me would use the same process. I know recruiters definitely would…

Why? Because my personal brand is on the line when I recommend someone. I only want to recommend people who are “in the loop” and up to date with what is happening in the world. And those are the people who are building and using their networks.

‘Picture Perfect’ Personal Brand

For this reason, all your work history, successes and contact details are important to include on your social media profile. But I want to particularly stress the importance of an impressive profile picture.

Our mission at Procurious is to change the face of procurement. So many images of procurement out there today reinforce a very old, brown cardigan-clad image. We want to replace those images with fresh, global images of being “the smartest guys in the room”.

Make sure your headshot is just that, a headshot where people can clearly identify you as you. Make sure your attire and demeanour are professional and represent how you would look turning up for a job interview – no selfies, no wedding photos, no hazy screens, favourite cars, or children. You laugh, but we see a lot of crazy things on Procurious, which is why I’m making this point.

Personally, I think of a shot of you speaking or in action in a professional setting can be powerful to promote you as a thought leader. These are tough photos to get, so a plain vanilla corporate headshot will also serve you well. Using the same photo across all social media can be powerful as your ‘personal brand’ is consistent and is reinforced each time someone sees you.

After all, a picture is worth a thousand words.

This blog is part of a speech Tania made at the eWorld Procurement and Supply Conference in London on 2 March 2016. In her next instalment, she will share why being first with the news will help you be a first mover.

The Fine Art of Negotiation

Your negotiation skills come into play practically every day in the procurement game. But that doesn’t mean there isn’t room for improvement.

essential negotiation strategies

Strong negotiators master verbal, written and non-verbal communications. They’re assertive, approachable and know what they want.

And while procurement professionals are relying on their negotiation skills more than most, there’s always room for improvement to ensure you’re getting what you want during the negotiation process, regardless of whether you’re the buyer or seller.

Getting the Right Result

Strong negotiators rely on specific skills including patience, self-confidence and creativity. This is according to Australian business and leadership coach Cheryl Daley, who focuses specifically on the art of influencing others.

“People don’t often believe they have strong negotiation skills, but it’s a skill we all need in life, particularly in business. There’s always better ways to approach negotiations, but we often fall into the same rut and forget about the importance of looking for new ways to get the result we want when negotiating,” Daley says.

Negotiations often become a power-play between two parties, but the aim should be for everyone to walk away feeling good about the outcome, she says.

Long-Term vs. Short-Term

Anyone about to enter into a negotiation of any kind should start by determining the type of negotiation it will be.

“The type of negotiation will have a huge impact on the way you approach it. A buy and sell negotiation with someone you will deal with once, will be a completely different situation than if you’re entering into something you believe will be a long-term partnership,” Daley explains.

“The longer-term negotiation processes in the business world can take months or even years. These usually involve higher stakes, and can involve a discussion back and forth for some time until everyone has an outcome they are happy with.”

Set Your Goals

Be sure to set the goals in your own mind, before the initial discussions with the other party, so you don’t feel disadvantaged from the outset, Daley says.

“Be prepared to do some personal preparation before the first discussion with the other part. Always be polite and create a dialogue that doesn’t position one party as the ultimate winner and the other one as the loser. Be firm, but not aggressive. Stay calm, because the moment you lose it, you’ve lost the battle.”

Knowing what the other person’s weaknesses are will really help. It’s easy to be steamrolled by the other party if there’s no connection or relationship in place, so take the time to get to know them, and how you can help them achieve what they’re aiming for.

“It will always be more difficult to negotiate if you don’t first ask a few questions of the other party first to determine whether you’re able to solve their problems during the negotiation process. Otherwise, you could find yourself at a disadvantage,” Daley adds.

Not All About Price

Meanwhile, licensed Buyers’ Agent Nicole Marsh reminds us that negotiation isn’t always just about price. Often, negotiating other terms for real estate buyers such as a longer settlement, being able to move in on an earlier date, or the vendor leaving behind the white goods is enough to get the deal over the line.

“Long term partnerships may require each party to make concessions to make it work and may involve more problem solving skills to get the deal across the line,” Marsh says.

On the other hand, when a negotiation does come down to price, it’s important to set a ‘walk away’ price so you don’t agree to a higher price than you can afford, she says.

“It’s never too late to look at how you approach your negotiations, and consider adding new skills to your repertoire,” Marsh says.

Top Tips for Negotiating

Marsh also shared her top tips for negotiating:

  • Be firm, but not aggressive.
  • Strive for solutions that work for both parties.
  • Stay calm. Stick to the issue, and don’t become hostile or frustrated.
  • Don’t take it personally.
  • Pick a mutually convenient time and place for the negotiation to take place.
  • Put details in writing.
  • Consider whether you need legal advice.

Going to Negotiation Training? No, I Learned Last Week

In the final article in this series, I consider how our stakeholders outside of the procurement function consider negotiation. After all, everyone can negotiate, right…?

bigstock-Man-Drawing-Maze-53939659

As seasoned buyers many of us will have been asked the question; “Can I join your next negotiation?”

Nearly always the request is well meaning and indicative of a willingness to learn the art which is core to our profession (despite my belief that buyers fall back on the perception of their own negotiation skills too easily). It is also, I feel, always unintentionally dismissive of the skill itself.

Unwritten within the question is the inference that the invitee assumes learning to negotiate can be done within a few hours, and perhaps even in a single sitting. “I’ve attended the training course, now I need to take the test”, is the secondary call. Those of us practising negotiation for all of our careers know all too well that during every negotiation, even the most experienced and skilled of us make mistakes, and value egresses to the other party outside of our control and planning.

Of course, being the type of individual who is passionate about developing people, particularly in the area of procurement and business management, I seldom refuse a request and attempt to install the observer in to the next appropriate negotiation. Many readers will also recognise that this often means waiting several weeks or months as “good, old fashioned, round-the-table, face-to-face” negotiation happens less and less in today’s technology driven world.

Perpetual Conditioning

Without question, we are “negotiating” during every email, phone call or meeting that we have with our negotiating counterparties – or “conditioning” as we like to call it. We negotiate by requesting our leaders to set out our message to their senior counterparties.

We set out and plan our negotiation, conduct detailed cost and market analyses, plan the room layout, the attendees, the tone of the questions and who will ask them, our critical requirements and our tradeables, and lots more besides. And after all this work, unseen by the requestor, we execute the negotiation, hopefully in the allotted time. However, I contend that the single most critical success factor in any negotiation is ensuring you are negotiating with the correct party. Note: I say party, not person.

Having the correct person in the room is important, too. Most of us will have learned a valuable lesson at some point in our careers by experiencing frustration and delay at a counterparties repeated requirement to refer to more senior colleagues. “Surely you expected that question and prepared a response?!” is our, often silent, cry.

But, my point is not about having the correct person in the room, it’s about negotiating with the correct party. Negotiating is tough enough with a counterparty that is willing and hungry to reach a resolution. Negotiating with a party who simply does not have to negotiate; a party who does not need to concede and does not believe he will lose is the toughest of all. And this, invisible to the prospective negotiation observer, is where the high performing buyer excels.

This type of negotiation started a long time; ago often months and sometimes years ago. Recognising a growing dominance or complacency of any given counterparty, the skilled negotiator develops hunger. A hungry competitor who may or may not force the complacent of dominant supplier to move position and concede value. It actually doesn’t matter whether the incumbent moves position or not, the high performing buyer now has options.

Negotiation 101

Do not misunderstand my point here. I am not describing the time-served tactic of “play one off against the other“. At the start of this negotiation there simply were not two parties to play off against each other. Success in this negotiation is the culmination of hard fought manoeuvring, which ultimately makes the dominance of the incumbent supplier irrelevant.

Manoeuvring which creates a credible threat to the incumbent where previously there was none. All of a sudden the negotiator has options. All of a sudden the BATNA (Best Alternative to Negotiated Agreement) just got a whole lot better and a positive result will ultimately be obtained.

I am also conscious that my use of the word manoeuvring may be perceived negatively. It is not meant to be so. In the world of complex, multi-national negotiations with poor market dynamics, limited competition and high switching costs, I use the word merely to explain what is necessary to extricate an organisation from contracts with under-performing suppliers.

In this sense manoeuvring is meant only in a positive and necessary sense and it may occur for years before tangible results. But as high performing buyers, manoeuvre we must, unless of course, we are content with negotiating brilliantly with the wrong party. 

Read more articles from me on Procurious here and here.

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

5 Must-Have Attributes of Successful Procurement Leaders

Not all successful procurement leaders have the heady designation of Chief Procurement Officer (CPO). Forget the title, it is just a label. What is important is that for any person to lead a procurement organisation, he or she requires a basketful of skills and abilities.    

leaders

The good news is that no one person in a leadership position in procurement is in possession of all these skills. Most technical skills, such as strategic sourcing and contracts management, can be learned over time through training and experience. The jury is still out on whether behavioural traits, like the ability to lead teams and communicate effectively, can be developed.

Many recruitment advertisements ask for attributes using undefined phrases such as “good communicator”, “visionary”, “innovative”, “collaborative”, without knowing what they really mean. Here are five main attributes that procurement leaders need:

1. Ability to Drive Change

Many mid-sized organisations are grappling with the transition from a tactical function within the Finance Department, to a strategic function within the supply chain. The main objective will continue to be cost reduction, sometimes combined with or expressed alternatively as value creation.

Managing change is difficult. It needs a firm hand and a strong will, while being calm under pressure. The ideal person to manage the transformation may be a new hire from another industry, or a seasoned executive from another function in the business. What is important is that he/she has a track record of influencing top management and internal stakeholders across all functions.

Dapo-Ajayi

Dapo Ajayi, CPO at AstraZeneca, came into procurement management from the sell-side of the business. She has paid her dues, having worked in a variety of senior marketing and branding roles in multiple countries over a period of 10 years.

2. An Affinity for Leading People

It is generally accepted that a collaborative and participative style is a preferred trait. Although traditionally successful, an autocratic approach now doesn’t work, particularly with the under 30’s. Retaining top performers is a constant battle.

Leaders will spend a fair portion of their time on competency development and building teams, as well as understanding what subordinates want and need from their managers to perform well. Because cross-functional teams are established features of best-in-class procurement organisations, leaders also need to nurture non-procurement members and earn their trust.

3. Talk Less, Listen More

For many CPOs, one of their goals is to gain the trust and support of their main internal customers or stakeholders. The key to understanding their problems is to listen intently and absorb their concerns without making knee-jerk assumptions and providing instant solutions. The desired result is to develop open relationships with peers and provide workable solutions for their users in line with corporate objectives.

The successful leader will develop a high level of skill in influencing the more difficult stakeholders and persuading them of the value that professional procurement adds.

Opening two-way communications, across all available channels, can increase cooperation and support from peers in other functions or divisions.

4. Global View, Local Focus

It is becoming increasingly important for procurement leaders to have had global business exposure. This can either be from working in virtual teams or preferably by having completed international assignments. Progressive firms are looking for those with process-driven experience, often in similar sized companies from other countries.

When recruiting from outside, people from management consulting firms, and those with re-engineering experience within the supply chain, are regarded as attractive candidates. Know global, think local.

5. Expertise in Procurement

Last, but not least. To have any credibility with top management, internal and external stakeholders and subordinates, leaders need to have some or all of the following knowledge and experience:

  • Category Management – By understanding the concept of leveraging spend across multiple commodities to deliver cost savings and create value, the leader who has shown results this way will be ahead of the competition.
  • Problem solving – Our prospective leader needs to be able to focus on the root cause of an issue and devise and test various possible solutions.
  • Procurement technology – A familiarity with the relevant available systems and tools will provide opportunities for speeding up and automating some routine functions or even outsourcing them.
  • Negotiation skills – Everyone has some experience of negotiation in their everyday lives. Upgrade those skills and get as much practice as possible.

What is likely is that you did not make the decision to become a leader in the procurement function, but guess what? Here you are, ready to launch! Opportunities are emerging for new types of leadership roles that did not exist a decade ago. Find one that suits you.

Is Procurement Ready for the Mobile Revolution?

The Mobile Revolution is firmly upon us, but procurement seems to be behind the curve when it comes to adapting. Why is this?

Mobile Revolution

Download GEP’s white paper on the role of procurement in the mobile revolution here.

“In all my time in procurement I have never seen a procurement person using an app.”

This was a quote passed to me by a colleague who was discussing our mobile procurement software strategy with the prospective customer.

You might be forgiven for thinking that this was some sort of dismissive statement, indicating perhaps an underlying Luddite tendency, “We’ve never used procurement software like that before so don’t see why we should start now”.

But, as it turns out, quite the reverse was true. This particular comment was made by someone enthusiastic about the prospect of a different way of employing technology, and the subtext was really, why is procurement so far behind the mobile revolution curve?

Procurement Inertia

This is a fair point. Human Resources and Sales Operations have been blessed with state-of-the-art technology solutions for some time. SaaS, and now Cloud, are de rigueur for our colleagues elsewhere in the business. But procurement still largely lumbers along with an online/offline hybrid of on-premise systems, spreadsheets and email.

As the quote implies, the inertia in procurement is not a result of lack of innovation or drive amongst the community. There is certainly a desire for a better, more efficient means to execute many of the processes and tasks encountered on a daily basis by the procurement professional.

The lag in evolution of the use of procurement software is largely a result of the legacy of direct materials management and ERP systems. Direct categories are so mission-critical that the systems used to handle planning, inventory and production are fine-tuned and locked-down to make them robust. But this in turn makes them inflexible, and the business becomes totally dependent on them.

When indirect categories are procured using the same systems, this intractability becomes a hindrance to progress and innovation. However, the ERP companies have no real interest in breaking the mould.

Technological Change

Expecting a sea-change for indirect procurement to come from that direction is probably in vain.

Decoupling the indirect categories to take advantage of up-to-date procurement technology solutions is a start. Inevitably, this requires deep thought and the investment of considerable brain power, but the results can speak for themselves.

New levels of efficiency, innovation, opportunity realisation and, of course, savings can result directly from the adoption of a new way of working with procurement software.

In a sense, that quantum jump of improvement can result solely from a procurement software system being simply better than the legacy system. Certainly, smart, professional individuals are able to force old-fashioned and outdated processes into something workable. But unleashed from such restrictions, those same people can really start to motor.

The Mobile Revolution

Mobile, app-based technology is a part of that picture. The only reason our guest has never seen a procurement person using an app is because the procurement software industry itself has been mired in the same inertia and legacy of on-premise solutions.  Well, most of the procurement software industry.

Mobile technology is going to have a huge impact on business-to-business operations and procurement is a key part of that. To find out more about state-of-the-art procurement software visit www.smartbygep.com.

GEP have shared a white paper on procurement’s readiness for the mobile revolution with the Procurious community. Download it at gep.procurious.com.

The Power of Networking

Networking is a breeze thanks to the proliferation of social media platforms out there, but when it comes to networking in the flesh, some of us freeze. Here’s how to handle it like a pro and make the most out of the opportunity. 

Networking-Event

Depending on your point of view, networking events can either be viewed as a waste of time, or present a huge opportunity for procurement professionals. While you may not always be in the mood for heading out to a networking event, there’s no denying that a good reliable network of contacts is various industry groups is paramount.

Sydney PR professional Catriona Pollard says some people are a little nervous about networking because they’re not entirely sure what is expected of them.

“Bear in mind that networking isn’t about going in to the centre of a room armed with a megaphone and blindly talking about yourself. Networking is about building relationships, not just promoting what you do. Remember, people are more likely to do business with people they trust.”

Facilitate the Introductions

Focus on building relationships and think about how you might be able to help others. For instance, if someone you’re talking to is struggling with AdWords and you know a great contact, you can introduce them. This will pay back in kind, Pollard says.

“It’s as simple as asking a series of open questions so that people talk about themselves, she says. Get the ball rolling by asking how their week has been and what they’re doing on the weekend, and go from there,” Pollard says.

Also be sure you’re turning up to an event that will provide you with maximum networking opportunities.

Think about it from a marketing perspective to consider who your audience is and whether you want to align with peers or potential business targets. If you’re more likely to pull out at the last minute, set yourself some networking intentions to get along to one event a week, or month. Also set some intentions about the event, such as having five good conversations and exchanging business cards, or meeting at least one person you want to have a follow-up coffee with, Pollard says.

“You need to apply some strategic thinking to find the events that will best meet your own business targets. Look up the website and look at their past events, the type of audience the event usually attracts, how many people usually attend, the style of the event and who’s hosting it, Pollard says.

Importance of Networking Diversity

Janine Garner, CEO of The Little Black Dress Group agrees.

A like-minded networking event limits the breadth of conversation, she points out. Ideally, you want to be in a room with a diverse network that consists of people with differing levels of expertise, age, gender and experience, she says.

“Lawyers sit in a room with lawyers sharing their legal experience from the industry of law. CEOs play golf with CEOs, fashion industry PR experts mingle with other fashion industry PR experts.

“Imagine instead, the colour of the conversation if instead you had lawyers, accountants, creatives, athletes, marketers and business owners discussing the various solutions to a problem. Imagine the different perspectives shared, the varying insights, the depth of conversation that would stretch thinking and push perspective wider,” Garner says.

Meanwhile, remember that going along with a friend isn’t a good idea, because you’re more likely to spend the entire event catching up rather than networking.

Leave Your Comfort Zone

People are very open to approaches when you’re alone, because everyone is generally in the same boat at a networking event. This can play to your advantage, points out the managing partner of Brown & Chase Talent Acquisition & Advisory in Australia, Nerissa Chaux.

“Attending events alone also pushes you out of your comfort zone and you don’t waste the opportunity by spending the entire event chatting to your friends,” Chaux says.

She’s attended hundreds of events, and says you can get the best out of networking by making sure that you’re attending events where people will generally be similarly-minded and your interests align, she adds.

“Also, arrive on time. It’s always great to be the first one at an event, as you have the best opportunity of meeting everyone who comes through the door.”

Also, don’t wait for others to introduce themselves, Brent Duffy, director of Sydney leadership consulting firm, Maximus International.

“Be genuinely interested in others. It should be an equal 50/50 conversation. Treat the event as if your CEO was in the room, and see it as an opportunity to learn and hear about different perspectives rather than trying to gain quick wins for yourself, Duffy says.

“People love to share their learnings. Asking for advice demonstrates humility, your ability to listen and be open minded,” Duffy says.

“It’s more important to be an attentive listener who comes across as authentic and trustworthy, rather than someone who speaks candidly or excessively about themselves or their business. True listeners are rare, and people will remember you for this,” he says.

Remember the Follow-Up

The follow-up is crucial to ensure actually attending the event was worthwhile. This can take many forms, depending on the connection that you’ve had.

Janet Culpitt has been networking as a small business owner of www.focusonwealth.com.au for 16 years, and now teaches others how to get the most out of networking.

She recommends connecting on social media the same day of the networking event. Also check out any other social media groups they’re involved with, and request to join those if they’re relevant to you.

Culpitt will choose to send an ecard, a handwritten note, send a text message or sometimes she will make a phone call to their office to leave a message of thanks for talking the other day with their receptionist.

“Emails are fine, but they’re so common these days that I like to mix it up with other communication tools.”

Stop…Millennial Time!

The Millennials are here and there is nothing you can do to stop them. Those born between 1982 and 2000 have surpassed the Baby Boomers in sheer numbers and are now the top consumers globally.

citizenM-Hotel-Millennials

Hospitality is one of the most challenged industries when it comes to ‘Keeping up with the Millennials’, as it is typically a very traditional industry and change isn’t exactly its favourite word. Hotels in particular have been doing the same things, in the same way, for years now. They know change has to happen but more often than not they are quite uncertain as to what that change might be.

Marriott International for instance has gone from producing high-thread-count bedsheets to a YouTube Web series aimed at entertaining younger travellers. They also went on to buy Starwood Hotels & Resorts in a $12.2 billion deal because of its strong presence in the lifestyle brand category. W Hotels (part of Starwood) is all about edgy design, gourmet food and trendy public spaces — all features appealing to the Millennial traveller.

Redesigning for Millennials

A keen focus and demand for the latest technology, public areas with high speed WiFi for both work and play, as well as clever loyalty programs offering instant gratification, are all key to the millennial consumer.

“Millennials aren’t so interested in staying in their room, but congregating in compelling spaces with great design, music and a unique point of view,” says Jason Pomeranc, CEO of SIXTY Hotels. It’s why hotels like ACE and CitizenM are doing so incredibly well. They are first and foremost utilising their non-room space and creating inviting, cutting edge design hubs of interaction.

From major chains to small independent businesses, hospitality companies across the world are redesigning properties, spending a fortune on new technologies and even using Facebook Messenger for their Customer Service communications. It’s what Hyatt Hotels have done recently. In fact, there is a lot you can do from the app if you plan a stay at the Hyatt: check availability, make reservations, enquire about the view and even order room service.

How the Major Players Take Action

The reason for all this commotion – in the USA alone, more than 1 in 3 workers are Millennials, which amounts to some 83.5 million people. “They are becoming the earners, the spenders, the travellers, and importantly, the workers,” remarks Tina Edmundson, Marriott’s global officer for luxury and lifestyle brands.

Here is how a few major players are taking action based on this research:

  • Marriott launched Moxy and AC Hotels specifically with Millennials in mind
  • Best Western unveiled Vib, a chic urban boutique hotel
  • Hyatt premiered Hyatt Centric, an affordable lifestyle hotel
  • Hilton will open Canopy next year in Iceland. Each subsequent hotel will be inspired by the local community in everything from design to food and drinks

“By 2025, these guys are going to make up three-quarters of the workforce,” says Guy Langford, vice chairman and U.S. leader of travel, hospitality and leisure at Deloitte. And this is the one aspect the industry still isn’t facing. Most of the back office operations have not changed in the past 10–15 years. For Millennials, each day at work is like going Back to the Past…The heavy use of paper, spreadsheets and antiquated software makes adoption within the Millennial workforce sector very low.

This in turn affects staff retention and therefore drives staff costs ever upwards. Offering Millennial staff the opportunity to continue their digital, one-click habits at work by implementing technology heavily focused on User Experience (UX), is an absolute must for productivity.

“We have to understand what impact they’re going to have in 10 years’ time,” says Langford, “so changes made now, for both the Millennial consumer and the Millennial employee, will see huge ROI.”