Category Archives: Generation Procurement

CEO of ISM on the Importance of Social Media in Procurement

Welcome back to the final instalment of our recent chat with ISM CEO, Tom Derry.

Social media is key to procurement's future

 

To wrap up our chat with Tom, we discussed the important role that social media plays in the development of the procurement and supply chains professions.

Procurious asks: At Procurious we’re passionate about how social media and connecting a global network of procurement and supply chain professionals can improve the profile of our function, promote knowledge sharing and ultimately enable people be better at their jobs. Do you see a role for social media in the development of procurement and supply chain professionals?

Tom Derry: I honestly I don’t see how anybody could plan to be an effective professional in our field without using the social media tool kit. There are lots of reasons for this. Social media is a vital part of the way we work. The opportunities for procurement and supply chain professionals in social media are huge.

Social media is critical for connecting procurement professionals. It allows people to share information in a private and confidential manner and to leverage a global knowledge base to get answers to questions you just wouldn’t get otherwise.

Being connected through social media means people can understand and monitor the risks that are present in their markets. I’ve heard stories of our members getting procurement market information off Twitter, learning about labor unrest in their overseas supply chains and fires at supplier manufacturing facilities. All of this information is available in real-time through social media.

Twitter itself is becoming such an important source of data for the procurement and supply chain function.

More and more, we need to be able to contact people and pull on extended networks to gain reliable and current information.

I believe that social networks will continue to grow in importance over the coming years, particularly as younger people, who are more familiar with social media, move into managerial roles.

I really don’t see how you could be an effective procurement or supply chain professional without fully engaging in the social media space.

I think Procurious is right where it needs to be. By connecting procurement people across the globe, you are absolutely building on the right idea at the right time and adding greatly to the function. With the exception of possibly finance, I can’t think of a more globalised profession than procurement and supply chain. I certainly can’t see how procurement and supply professionals could even consider creating a successful career, without having an active presence on social media.

Want to read more from Tom?

Bridging the procurement talent gap with ISM CEO Tom Derry
Tom Derry on Innovating from your supply base

Bridging the Procurement Talent Gap with ISM CEO Tom Derry

Welcome back to the Second Part of our interview with the CEO of ISM, Tom Derry. In Part One Tom spoke about the changes occurring within our function and outlined the vast opportunities a career in procurement and supply chain presents.

Today we’re discussing talent, more precisely, the procurement talent gap.

How to bridge the procurement talent gap

Procurious asks: We hear a lot of talk about the procurement ‘talent gap’. ISM itself has called this out as a potential issue facing the function. As a representative industry body, do you feel that your organisation has a role to play in closing this gap?

Tom: Within the United States we’re witnessing a demographic shift. A huge number of people will be retiring within the next ten years. By 2025, the so-called millennial generation, people born from 1980 onwards, will constitute three quarters of the global work force. So clearly, there is a lot of knowledge that is about to leave the workforce. We need to ensure that knowledge is transferred across to the younger generation.

Also, the rate at which technologies and the markets move now, means we need to be constantly up-skilling just to stay up to speed.

The skills issue real, it’s a challenge that most companies are aware of.

ISM wants to be the facilitator that addresses this skills gap and allows procurement and supply chain teams to succeed well into the future. We’ve recently developed a model that enables us to effectively do this; it’s called the Mastery Model.

The Mastery Model provides a strategic approach that allows procurement and supply chain teams to deepen their expertise. The model is designed to drive organisational success through increasing staff capability.

Whether you are early in your career, just entering in the field, or a highly skilled supply chain professional, the Mastery Model can be used to make sure you continue to build up your experience and expertise.

The model defines 16 major competencies and 69 sub-competencies, tailored to four different career levels: essentials, experienced, leadership and executive. Users complete a self-assessment process; this is linked to their own personal aspirations. The Mastery Model then maps out a competency based learning and development program that will enable the user to develop the skills required for their desired role.

The Mastery Model takes the mystery out of understanding the steps you need to make the next jump in your career. 

Procurious: It sounds like a great way to open up a conversation between an employee and a manager around personal development planning.

Tom: Absolutely, staff members can determine the sort of role or position they are after, fill out the self assessment section and be provided with a run down of the areas they need to develop in order to be effective in their desired role. This can lead to very constructive conversation between employees and their managers.

I have to point it out that the tool is multidirectional. We’ve had employees approach managers after having completed the assessment. Managers too, have used the Mastery Model as means to set a development path for their staff and we’ve also seen managers and employees sitting down together to work through the assessment to create a personal development plan.

Procurious: Can you give us some insight and background into how the Mastery Model was developed?

Tom: As an organisation, ISM has been certifying competency for a great number of years. Over this time, we’ve developed an amazing database detailing the evolution of peoples skills within a procurement and supply chain context. It’s at the core of what we do as an organisation.

Now what we’ve done, is build upon that knowledge base to develop a tool that can be actively put into practice in the supply chain and procurement community. An advisory committee that was comprised of procurement professional, practioners and internal staff here at ISM developed the tool. Working together with these great professionals, we’ve been able to develop a model that strategically maps and matches training materials to your career experience and aspirations.

Procurious: What sort of time commitment does an assessment on the ISM Mastery Model require?

Tom: Well, that really depends on individual company, but it’s not a long process. In one thirty-minute session most people would be be able to complete it. What we encourage, is for people to do it in stages; complete your own sections then take it to your manager and get their input and review.

At a conference back in June, I had three young professionals to come up in front of the audience I was addressing. I asked them specifically about their career goals “where are you headed?” I asked. As the conversation flowed, we did their assessments live on the website, we drove down into specific competencies and consulted their levels of experience in certain areas. At the end of the process, a series of resources popped up that showed them what they needed to do to get to where they wanted to go in their careers.

After that, they were in a position to go back to their bosses and say “here are some areas I can work on to get better at my job”. I think that’s pretty powerful.

Procurious: The Mastery Model sounds like a fantastic tool. How can people out there access it.

Tom: It’s simple, just go to the ISM website. If you’ve already got an account with us, just log in and away you go. If you don’t have an account yet, you can get one right there on the spot.

Stay tuned for part three of Tom Derry’s chat with Procurious where Tom will talk us through the importance of social media in the procurement and supply chain space.

If you would like more information on ISM’s Mastery Model you can find it here.

The Supply Chain Entrepreneurial Spirit is Alive and Well

The Supply Chain Entrepreneurial Spirit is alive and well

When analyzing my connections on Twitter, one of the biggest words in my tag cloud describing my followers, next to business, marketing and supply chain, is “entrepreneur.” I can understand the desire to associate oneself with this word as it is often linked to success-oriented character traits such as tenacity, optimism, passion and creativity. Luckily for supply chain processes, the boom in creative thinkers and doers has flooded into the industry, and new ways to achieve supply chain excellence are sprouting up all around us.

I partly credit the hit reality series Shark Tank (or Dragons Den for those in the UK) for the explosion of entrepreneurs out there today. During the show, businesspeople pitch their unique ideas to “shark” investors in hopes of receiving funds to help bring their new product or service ideas to the market. The majority of questions asked by the investors come back to supply chain processes (Where are you producing? What does your distribution network look like? How much stock do you have on hand?). In more recent episodes, people have been pitching their supply chain as a competitive advantage, including messages of transparency and promises of speedy delivery.

In recent weeks I have personally noticed the impact of the entrepreneurial spirit on the supply chain industry and want to share a few examples:

Procurious – Sharing is Caring

The final encouragement to write this article came after being asked by Procurious to contribute to the platform’s blog. This platform, designed exclusively for procurement and supply chain professionals, embodies the entrepreneurial spirit of next generation managers and encourages the sharing of information to increase collaboration and learning opportunities. Founding Chairman, Tania Seary, recognized a need (a fragmented industry in need of a makeover), gathered a small team of professionals, and created a platform that has now grown to over 6000 users worldwide in just over one year. The role of social media in supply chain processes will continue to grow, and Procurious has established itself as an early-mover.

Logistics: Who can deliver faster, and cheaper?

As consumer expectations grow, especially in the field of E-commerce, so too does the stress on logistics processes. Today’s “I want it now (and cheap)” culture has led to an influx of crowdsourced delivery service start-ups in the logistics industry. Basically, people bring items to other people while en route to a particular destination. This concept follows in the footsteps of car sharing, apartment sharing and other aspects of today’s sharing economy. The first company name that comes to mind when discussing this topic is Uber, which started as a ride-sharing service and has since expanded into a multi-faceted transportation company, with tests such as Uber Fresh (food order delivery) and Uber Rush (courier package delivery) under its belt.

Creative delivery solutions are however not just limited to startups. Back in April, Amazon and Audi announced their plans to develop a service that would allow for the delivery of a package directly to a car’s trunk.

This is definitely a sector to keep an eye on in the coming months.

BlueBlox & Coke Life

Back in June, I had the privilege of meeting two supply chain entrepreneurs at the European Supply Chain and Logistics Summit in Barcelona. It was great participating in an event that encouraged innovative thinking and included industry entrepreneurs.

The first encounter was with Dorothy Diedericks, founder and CEO of BlueBlox. Dorothy recognized a need in the supply chain industry, namely the closure of the gap between the potential in emerging markets in Africa, the Middle East and Eastern Europe – and multinationals that want to conduct business there, but can’t due to numerous challenges. BlueBlox takes a modular approach to addressing these cross-border challenges, creating more visibility and increasing compliance.

Secondly, I sat-in on a presentation by Simon Berry from ColaLife. Back in 2008, Simon Berry and his wife Jane started an online “movement” which turned into an official charity in the UK in 2011. Essentially, Simon found it hard to believe that Coca-Cola was available in the majority of developing countries, but access to basic medicines was scarce. He had the idea of tapping into private sector supply chains to distribute anti-diarrhoea kits in Zambia, where 1 in 9 children die before their 5th birthday due to preventable causes such as dehydration from diarrhoea. After years of progress and innovation, it is safe to say that the entrepreneurial spirit of Simon and his small team has saved many lives.

WalMart Buyers meet “made in the USA” suppliers

In an attempt to improve its image and product assortment, Wal-Mart recently set-up a “shark-tank-like” pitch process that connected entrepreneurs with company buyers. Obtaining shelf-space at retail is not easy, let alone getting face-to-face time to pitch a product, so many businesses took advantage of this opportunity.

The pursuit of U.S. suppliers helps Wal-Mart gain some transparency in its supply chain and gives consumers more options both online and in U.S. retail locations. After all, according to Matt Kistler, Wal-Mart’s head of global customer insights, where a product is manufactured serves as a major deciding factor in purchasing decisions, second only to price. This forward thinking buyer-supplier set-up truly embraced the entrepreneurial spirit.

Closing Words

It is great to see the entrepreneurial spirit take over an industry that can use some more excitement and positive press coverage. It is safe to say that the supply chain industry has come a long way thanks to the tenacity, optimism, passion and creativity of industry professionals. The emergence and proliferation of connected devices, smart factories, and the sharing economy are sure to set the stage for more exciting times in supply chain and logistics.

Have you recently come across some exciting new projects? What are some examples of entrepreneurship you have seen in the industry?

How To Get Ahead: 5 More Key Skills For Generation Y

5 more skills for Generation Y

If you are part of Generation Y (born between the mid-1980s and 2000) and have ambitions to get ahead in procurement, you can expect great opportunities ahead. In Part 1 of this article we suggested five critical skills you can acquire through training and experience.

This time we look at other important abilities that are concerned more with communication, and your approach and attitude to your job. Success in procurement is not only about systems and processes; it’s about how we handle people.

Recently, a leading chief procurement officer said that up to 80 per cent of his time is spent influencing internal stakeholders. What does that mean for the ambitious young procurement professional? It means, besides having top class technical skills and experience, to get ahead you need to be a sales person as well.

1. Listen more, talk less

Sales training includes advice on how to be an active listener. In addition to giving your full attention to the speaker, it is important that you are also seen to be listening. You can convey interest to a speaker by maintaining eye contact, nodding or uttering regular words of encouragement to continue (such as “uh-huh”, “yes”, and “go on”), even if you do not fully agree. By giving this verbal and non-verbal ‘feedback”, the person speaking will communicate more easily and openly with you.

Inter-personal relationships with internal customers and stakeholders can always be improved. You can develop a reputation for being approachable and for solving your users’ routine problems. Ultimately, attitude speaks volumes.

2. The power of persuasion

It is important to position yourself as a credible, trustworthy and knowledgeable person if you want people to follow your way of thinking. Understanding human nature and the principles of persuasion and influence can help create better working relationships.

Persuasion means presenting your case so that you can sway opinions or motivate a decision, usually by appealing to people’s emotions and sense of logic. Dr Robert Cialdini, the author of the popular book Influence: The Psychology of Persuasion, talks about reciprocity. Your internal customers are more likely to be persuaded if you can give them something personalised or unexpected in return. Remember the old adage: under promise and over deliver.

3. Change management

Much of a procurement professional’s time is spent in managing change, sometimes without realising it, Conventional wisdom says 20 per cent of people will embrace change, 60 per cent will go along with it, but 20 per cent will outright reject it. Knowing how to handle the bottom 20 per cent can save you time, money and stress.

The implications of ignoring stakeholders that have a vested interest in a given solution cause extra work, aggravation and a poor result. Remind yourself that they are always thinking of this acronym: WIIFM – what’s in it for me?

Knowing how to approach people and make them feel important is a skill that will work for you forever. Stakeholder management is developing into a core competency. Dale Carnegie wrote a classic in 1937 called How to Win Friends and Influence People which is still completely relevant today. He teaches the principles of dealing with people so that they feel important and appreciated. He also emphasises fundamental techniques for handling people without making them feel manipulated.

4. Networking

Networking is about creating sustainable relationships over time, and the best ones involve considerable up-front investment. It helps to see your network as a living organism that needs food and nurturing to sustain it. You need to be proactive in helping it flourish. Technology can help in this, but ultimately it is a human process. Making time in the canteen, corridor or coffee break to grow your network will be time well spent.

Learn to help others with contacts, experience and knowledge before helping yourself. Many people fail at networking because it’s obvious they are only after what they can get out of it.

Networking is a two-way street. The potential rewards are high. We all know how our work grinds to a halt when the ‘network is down’, so make sure yours is up 100 per cent of the time.

5. Be a Team Player

Working in teams is a fact of life in procurement. It can be rewarding but at times, it can also be difficult and downright frustrating. Whether you are the leader or just an active participant, you can improve the experience for both yourself and other team members by expressing your thoughts clearly and directly in a positive, confident, and respectful manner.

Good team players, despite their differences, figure out ways to work together to solve problems.

Much of the communication within teams takes place informally. Keep other team members in the loop with information and expertise, this helps get the job done and prevents surprises.

Elaine Porteous is a B2B freelance writer with specific focus on careers in procurement and supply chain.

Read part 1: Five key skills for Generation Y

ISM CEO Tom Derry on Innovating From Your Supply Base

ISM CEO Tom Derry speaks to Procurious
ISM CEO Tom Derry speaks to Procurious

Last week Procurious was fortunate enough to catch up with Tom Derry, the CEO of the Institute for Supply Management. In this, the first-part of our three-part interview, Tom discusses the changes he’s witnessed in the function over recent years and highlights the unique opportunities that make procurement and supply chain such great fields to work in.

Procurious asks: For those of us that aren’t familiar with ISM, perhaps you could provide some background to the organisation and its goals.

Tom Derry: ISM is the world’s first and largest procurement and supply chain network. We’ve recently celebrated our 100th anniversary. We specialise in providing training and development for the procurement and supply chain community.

We provide customised training to organisations to guide them through their procurement and supply chain strategies.

While we’re based in the US, we are a truly global organisation. The second largest group of ISM certifications holders are in China, followed closely by South Korea. Our global growth is impressive with more than 50 per cent of certification now coming from outside of the United States.

Procurious: You’ve held the role of CEO at ISM for three years now, how have you seen the profession progress over that time?

Tom: There are a couple of obvious themes here. The first is that, it’s true that the role of procurement and supply chain professionals has become more strategic. Companies are competing more and more on the basis of how well they run their supply chains. I think it’s fair to say that the 20th century was the century in which marketing was the driving force behind organisational success. More recently, we’ve seen the ability to outcompete in the supply chain space as the critical factor for achieving business success. This is particularly true in our increasingly globalised economy.

Another shift I’ve witnessed is a move away from our focus on pure cost reduction. Over the last 30 years, as global economies have developed, manufacturing has become more globally distributed. The clear motivation for this was to find lower cost producers, lower labour costs, labour inputs and lower cost of materials. It was obvious that, for a time, we were all focussed on cost reduction. We’ve done a great job of capturing that opportunity but now it’s time to shift our focus.

Now, we need to focus on how procurement and supply chain can impact the top line. The answer appears to be through the innovation that lies within our supply bases.

A major change in the way that companies are doing business today is in the way they are organised. Today’s firms aren’t vertically integrated any more. If you’re going to get innovation in a modern business, it’s going to come from your supply base.

Some companies still do it the old fashioned way, but the new model is – we are a marketing company – we’ve got a brand and we don’t manufacture anything – we outsource manufacturing.

In this model, innovation really does have to come from the supply base. To that end, there needs to be a shift away from beating-up suppliers on cost – towards working with them on generating innovation and growth.

Procurious: Now looking to the future, what is it that most excites you about the procurement and supply chain profession? Where do you think our opportunities lie?

Tom: If I was 25 again, I couldn’t think of a field that I would personally find more fascinating than a corporate career in procurement and supply chain.

Here’s an opportunity to be based in almost any region you choose. You’ll learn new cultures and dramatically impact the success of the business that you work for. You’ll be working on some of the most interesting and creative projects your firm is involved in.

In other professions, like accounting, you have a strong understanding of what you’ll be doing every day. In supply chain, one day you’re going to be making the business case for locating a manufacturing facility in a new location. The next day, you may be dealing with political risk and its impact on operations in a given geography or getting an opportunity to talk to a prospective new supplier with some amazing new technology. So you’re really on the forefront of the business, both in its current positioning and also in the way it plans for the future.

This means that new skills need to be deployed. The level of business acumen has to be much higher than it was historically. You have to understand how markets are moving and what is happening with the commodities you source and the services you buy in a global context. You have to understand the trends of foreign exchange. You have to understand where your company is headed, and what markets you want to compete in in the future and position your company to be able to do that in three to five years.

In the past, procurement and supply chain have been seen as backward looking functions. It was our job to get the most effective pricing put in place to support the existing legacy business processes. Now we are thinking about and acting on the future of our businesses. Business acumen, understanding and strategic planning are three skills that I believe are critical for successful procurement professionals.

Look out for Part 2 of our interview with Tom Derry next week.

The War for Talent – Battleground Asia

The Faculty Roundtable lands in Singapore

The Faculty Roundtable lands in Singapore

The Faculty was in Singapore this week for the launch of its Asian Roundtable Meetings. This series of events brings together a carefully selected group of elite procurement leaders to share experiences and insights within the specific context of the Asian procurement environment.

Wednesday’s inaugural event focused primarily on talent attraction and retention, an area of great debate across the region.

Attendees stressed that competition for talent not only occurs between firms but also within the functions of your own business. “Procurement isn’t always the first choice” said one CPO.

Also addressed, was the need for a shift in the competencies of procurement staff. It’s time to move away from traditional purchasing practices and take a more strategic commercial perspective on our business challenges. The assembled procurement leaders agreed that now the function is being seen as a source of ongoing revenue, there is a requirement to shift our competencies in order to fully realise this opportunity.

Attracting top procurement in Asia

One of the key challenges outlined when it comes to attracting top procurement talent in Asia was the need to appeal to a very broad spectrum of employees. One CPO detailed that his team comprised of ten different nationalities, from Chinese Singaporean nationals through to European expats and that each of the groups present in the workplace had a different set of factors that motivated and drove them to succeed at work. There simply isn’t a single management technique that can be effectively applied to all members of such multinational teams.

Another interesting point raised throughout the day was the reluctance of employees to accept failure. One CPO pointed out that “if innovation and growth are the goal, you have to experiment and experimenting involves failing”. This is not something that sits easily within the context of some Asian cultures.

Guest speaker Tom Verghese, who has contributed to the Procurious blog in the past, went into great detail highlighting the importance of cultural sensitivities within the diverse workplaces of Asia.

Tom stressed that procurement bosses need to be cognisant of the affinity bias (selecting employees from a similar background to one’s self) when constructing teams. Operating in a culturally diverse market requires forming opinions based on the inputs of a culturally diverse team.

Mentoring too was highlighted as an area of critical importance for the development of talent within the Asian procurement space. The Faculty has committed to work with the attendees of the Asian Roundtable to establish a mentoring network that will ensure the development of the next generations of Asian procurement leaders.

The Faculty Asian Roundtable will be returning to Singapore in September to kick off its mentoring program and once again connect the region’s brightest procurement minds. To find out how your organisation can get involved get in touch with Max Goonan or Chris Roe at The Faculty.

6 things you need to know before taking a procurement job in Singapore

6 things you need to know before taking a procurement job in Singapore

The chance to live in Singapore as a CM within an IPO for a MNC (Category Manager in an International Procurement Office for a Multi-National Corporation) is flattering and could be the making of your career, but you need to consider the opportunity with your eyes wide open.

Last week, I had the pleasure of attending The Faculty’s first Asia Roundtable Meeting in Singapore. The event was a huge success and a fantastic step in the development of our business in Asia.

Amongst the knowledge sharing and general camaraderie of the event, I had the opportunity to speak with some of the region’s leading procurement minds and understand what it’s like to work in procurement in this great city.

Here are some thoughts you should consider before taking a role in the Lion City: 

  1. This is where it’s all happening. Singapore has long been dubbed the gateway to Asia and when you’re here, you get the distinct feeling that you are on the frontier of global sourcing. Some of the most exciting and experienced procurement professionals in the world are based here. A lot of the future growth and innovation in our profession will pass through this city. 
  1. You’re going to need cash. This is an expensive city, especially if you are chasing the 5 C’s of Singapore – Cash, Credit Card, Condo, Country Club and Car. Cars are expensive, but what’s more expensive is the license/tax to drive it. All up, a 3 Series BMW with an open market value of $32,000 USD will set you back a cool $160,000 USD in Singapore. If you have children, beware… Tuition fees at private international schools can cost up to $35,000 USD a year. Most CPOs I spoke to were not on “ex-pat” packages so these costs were not included as part their salaries. We were also told on this trip that procurement roles in other countries within the region, such as Indonesia or China, are paying 2 to 3 times what the global companies are paying in Singapore… This is certainly something to be considered and negotiated before accepting your new role.
  1. You’re going to need energy. The old adage of work hard, play hard is alive and kicking in Singapore. These professionals are in truly global roles. Working in a global sourcing hub, you’ll be connecting with colleagues and suppliers in all time zones. This means early mornings and late nights on teleconferences. It also means you will be travelling a lot. Which brings me to my next point…
  1. You’re going to need to understand this isn’t a region. Asia-Pac is a diverse group of countries with more than a dozen different cultures many with their own language, beliefs and practices. When you are being “sold” the job from Global HQ, they probably won’t understand the complexity and geographical spread of this ‘region’ – so make sure you do! One CPO today told me it takes 5 hours for him to fly into China or Japan and 12 hours to get to his team in New Zealand – those flight times are like flying between Greenland, Ghana, and Guatemala for a London based CPO. In fact, it takes less time to fly from London to Beijing than it does to fly from Singapore to Auckland.
  1. You’re going to have to learn to keep quiet. One of the things we learnt in our cultural awareness workshop with Dr Tom Verghese, was how people from some Asian cultures have a tendency to be very quiet in meetings/business interactions. This means, those procurement leaders from western cultures need to ensure they actively create an environment of trust and encourage people into the conversation to share their views. One of our Roundtable members highlighted how this presented a real challenge when trying to foster a culture of innovation and experimentation. It was suggested that certain cultures in the region are hesitant to try something new if it may lead to a loss of face.
  1. Have an open mind and learn! Singapore presents a fantastic opportunity to learn how to work with and manage just about every culture in the world – a brilliant training ground for future leaders. The CPOs at the Asia Roundtable were a truly multinational bunch with representation from France, Canada, Britain, Malaysia, Singapore, Australia and Italy. They had lived in just about every country in the world and had managed people from all over Asia and the around globe. What a great opportunity to learn about the nuances and needs of all these cultures!

If you are interested in learning more about The Faculty Asia Roundtable Meetings held in Singapore, get in touch with Max Goonan at The Faculty. Max.Goonan@thefaculty.com.au

Procurious talks to Kylie Towie – ‘Procurement Leader of the Year’ 2015

Procurement Leaders 'Procurement Leader of the Year' Kylie Towie

They say that Texas is big. If you’ve been to Western Australia (WA) you’ll know that ‘big’ is a relative term. Western Australia’s size is so vast that Texas would fit within its boundaries three times, with still enough room left over for California and Connecticut to come visit. For the Europeans out there, Western Australia is as big as France, Germany, Spain, Poland, Italy, Greece, Portugal and Ireland combined.

It is from this vast part of the world that the 2015 Procurement Leader of the Year hails.

Kylie Towie is the Chief Procurement Officer of WA Health, the government agency responsible for providing health care to this enormous state and was recently awarded the prestigious title of ‘Procurement Leader of the Year’ at the Procurement Leaders Forum in London.

Kylie graciously took some time to catch up with Procurious to discuss her achievement.

Procurious: Kylie, first of all, congratulations. It is a huge honour to have been recognised as the Procurement Leader of the Year. Can you tell us what it means to you to take out this coveted award?

Kylie: Thank you. To be completely honest, it was a huge honour just to be nominated for the award. The other nominees (Kellogg’s, ITV), along with companies in the room such as Kimberley Clark, Unilever and IBM are global industry leaders and to be mentioned in the same breath as such high calibre organisations was a great achievement.

In terms of the award itself, it is a fantastic feeling to know that the work we’ve been doing at WA Health not only positions us as a leader in the Australian public sector (the department has also been recognised for it’s performance domestically), but is seen by the profession globally as something that is contemporary and leading the way in transformational procurement.

Procurious: Can you give us some background to the projects you’ve been working on at WA Health?

Kylie: My tenure at WA Health hasn’t been a long one. I was parachuted in, back in January 2014, to address some identified issues with the department’s procurement processes.

My first task was to establish a picture of the WA Health procurement landscape. Despite an organisational budget in excess of $8 billion (AUD); there wasn’t a clear view of what was happening from a procurement perspective within the organisation.

The department was also in the midst of constructing two new world-class hospital facilities at a cost of seven billion dollars. So procurement and spending was at the front of everyone’s mind.

When you’ve got programs of that magnitude, it clearly puts pressure on the procurement environment. For us, it was a matter of understanding and determining the levers and mechanisms we could utilise, to ensure the business’s strategic goals would be achieved.

Procurious: You’ve just mentioned that you were able to link procurement activities directly to organisational goals; can you expand on that? 

Kylie: At WA Health, we refer to procurement as business leaders and strategy leaders rather than procurement leaders. We aim to act as enablers to ensure the organisation meets its business objectives.

I have found that if you spend too much time ‘talking procurement’ you quickly get labelled as ‘back office’ rather than being viewed as a strategic leader.

The way that I see it, procurement underpins any business decision you make. Any business strategy requires a solid procurement strategy to sit beneath it.

As procurement professionals, it’s our job to lift the conversation up a level. If you start to talk about business levers, value propositions and achieving strategic objectives rather than discussing supply, invoicing and cost savings, you’ll quickly change perspectives about the function and the value it can bring to an organisation. By making simple changes to your dialogue, you’ll find that business partners will see you in a very different light.

Procurious: How did you go about delivering the transformational change program at Western Australian Health?

Kylie: Stakeholder engagement was critical. Doctors, nurses and clinicians are rightfully concerned with one thing: Better patient outcomes. At times, business and procurement processes can be seen as a burden or a roadblock to health professionals getting what they need to do their jobs. Obviously in health, the ability to get the right equipment or product at the right time has the potential to save lives. It was critical, that in order to be seen as enabler, rather than a roadblock, we engaged closely with these practitioners.

At the beginning of the transformation process, I met with a number of the most senior clinicians from across the state to discuss their problems and determine how, with smart procurement, we could help to solve them.

I found that by shifting our conversations back to the patient, I got immediate buy-in. Everyone at WA Health is working towards better patient outcomes and a healthier Western Australia, that’s our modus operandi. So now, as a procurement function, every time we make a decision, we ask ourselves “how does this serve our patients and our community?”

By asking these questions we are immediately aligning ourselves with our organisations goals and our community’s expectations.

Once we had an overview of what needed to be done, I set out to instil four fundamental procurement pillars that would guide our team through the transformation. The pillars we revolved our operations around were, governance, capability and capacity, training and education, and monitoring and evaluation. I have used the same framework to great effect in every procurement transformation I’ve run.

Off the back of these pillars, we identified 24 strategic recommendations, which resulted in 62 separate procurement improvement projects. We took a systemic approach to addressing these projects and finally delivered all 62 by the 19th of July this year (a remarkable 12 month turn around).

The transformation process means that WA Health now has a very robust foundation for procurement processes and activities with clearly defined roles and responsibilities. It’s also helped us improve our relationships with our providers and vendors.

Procurious: How is Procurement now perceived within WA Health?

Kylie: I think the critical success factor here is that we now have a seat at the executive table and are viewed as essential in the strategic planning of the organisation. This shows that we’ve earned the trust of the organisation. We earned this trust by pointing out where the department was exposed from a legislative point of view, but more importantly, by pointing out the holes in their fiscal buckets and, providing value through robust strategic business advice through procurement solutions that meet our organisations goals.

We were quickly able to point out where financial leakages were occurring. But more than that, we were able to suggest minor changes that stopped these leakages. We also quantified the dollar impact that implementing the changes had made to the organisation. Needless to say, after this, we found that we very quickly got the buy-in we needed.

As I mentioned earlier, another critical factor that lifted our perception was changing the way we spoke about our work. We’ve lifted the level of our conversations up to a point where we are now addressing real business problems faced by the department. By speaking their language, we’ve earned their trust. The procurement department is now seen as a trusted business partner at WA Health.

Kylie, once again, we would like to congratulate you again on this fantastic achievement and thank you for taking the time to share your story with Procurious. This there anything else you’d like to add?

Kylie: I would like to give some praise to my team here at WA Health. They have been remarkable; there is no other word for it.

We are only a small team, but they are the most outstanding, passionate, committed, driven group of individuals you are ever likely to meet. You simply can’t achieve things like this alone; you need people who share your passion and your drive. I really can’t speak highly enough of them.

Why are CPO’s scared of Social Media?

Why are CPOs scared of social media?

Noel Gallagher, he of Oasis fame, said earlier this year that musicians are “S**t scared of social media”. I think CPO’s are too.

This morning I carried out some rudimental research into the Twitter presence of the CPO’s of the world’s ‘market leading” brands. The results were telling. I searched Twitter for the CPO’s (or equivalent) at Apple, Procter and Gamble, Unilever, Coca Cola, GlaxoSmithKline, LG, Reed Elsevier and Shell and couldn’t find a Twitter account for any of them.

Its not just CPO’s either, it seems the whole C-suite really don’t care for social media. Research conducted by CEO.com and DOMO suggests that only 8 per cent of CEOs have a Twitter account and that a staggering 68 per cent of CEO’s have no social media presence at all! A CEO without so much as a LinkedIn account? Are you kidding?

Interestingly, Mark Zuckerberg is the only CEO in the Fortune 500 who is present across the five leading social media platforms, Twitter, LinkedIn, Google+, Facebook and Instagram (given he owns the last two, I guess he had a head start).

So why are CPO’s so anti-social (media)?

Sure, social media is a generational thing. Younger people ‘get it’ because they grew up with it and older people tend to struggle to understand it. Now let’s be honest, most CPO’s fall on the older end of the youth spectrum and hence are operating from a disadvantaged position. This however, is no excuse to ignore social media.

Like it or lump it, social media has become a critical part of our social fabric. It’s where we go to interact with people, inform ourselves and most importantly for businesses, it’s where we go to make our judgements and voice our opinions on brands.

We are judging you

While a traditional procurement leader may not see it, people are forming opinions based on their social media activity (or rather, lack thereof).

In the same way that recruiters will look at a candidate’s Facebook page to get an understanding of who they are; employees, suppliers, customers and shareholders are researching corporate executives to determine if they’ll make a good boss, business partner or are worthy of investment. Those that are not present on social media, miss the opportunity to put their best foot forward.

In the case of the companies I listed above, I’ve already established an opinion (a negative one) about them based on the fact that they don’t have a socially active CPO. In all likelihood, the opinion I have formed is incorrect and uninformed, but the lack of social presence has led me to subconsciously make certain assumptions about those departments and businesses.

The importance of socially connected leaders

To state the bleeding obvious, the business world has changed. Gone are the days of unknown senior executives ‘connecting’ with people through ads in local newspapers. The modern business environment is hyper-connected and driven by information.

Business executives are now seen as celebrities and the advent of social media has led people to expect access to celebrities. Richard Branson, Tim Cook and Mark Zuckerberg are the faces of their brands. The fact that their celebrity shines so bright also means they are incredibly effective marketing vehicles.

A company’s brand, as well as its understanding of its customer base and the market it operates in, now depend on its social presence. Put bluntly, there is an expectation, from customers, shareholders and the press that leaders will be active and accessible on social media.

Socially active leaders are better leaders

Not only is there an expectation that leaders will be active on social media, there is strong research to suggest that socially active leaders are better at their jobs. Brandfrog, a professional branding company, released a study in 2014 highlighting the importance of social media in the perception of company leaders. Below are some of the high level findings.

  • 75 per cent of US respondents agreed that CEO participation in social media leads to better leadership. This figure is up from only 45 per cent in the previous year.
  • 77 per cent of US respondents agreed that C-Suite executives that actively engage on social media create more transparency for the brand.
  • 83 per cent of US respondents agreed that leaders who actively participate in social media build better connections with customers, employees and investors.
  • 82 per cent of US respondents agreed that executive use of social media establishes brand awareness.
  • This one is particularly relevant to my Twitter research this morning; 77 per cent of US respondents believe that social media is a powerful tool for building thought leadership and enhancing the credibility of C-Suite executives with stakeholders.

The report lists many more stats, similar to these, that clearly spell out the case for CPO’s and others in the C-suite to start interacting on social media.

Get involved already!

Social Media won’t be optional in the near future – it’s not a passing trend. CPOs need to understand that in order to gain the respect of their clients, their industry and their staff, they simply must be present and active on social media. The good news is that the bar for CPO social media participation has been set so low that there is a huge opportunity to get in early and capitalise!

So here is my call out to the CPO’s – Sign up! Twitter, LinkedIn, Procurious, Google+, Facebook, Instagram. Who knows, you might even enjoy it, everyone else does!

5 Things Procurement Organisations Should Start Doing Now

By Kay Ree Lee, The Hackett Group 

Stop paying lip-service to your internal customers: Here are five things Procurement organisations should start doing now to meet and exceed internal customer requirements.

Five things Procurement organizations should start doing now to meet and exceed internal customer requirements

“Procurement needs to be more proactive versus the Business initiating projects”

“Procurement needs to be an integral part of the team”

“Consult the Business before implementing any process improvement”

“Procurement needs to issue the POs in a timely manner. Waiting 3 days on a PO is unacceptable”

These are some comments we’ve recently heard when conducting a Stakeholder Survey (Voice of the Customer) as part of a broader Procurement benchmark for different clients. We often hear that Procurement is focused on meeting and exceeding customer requirements, but benchmarks from Hackett’s Procurement database shows otherwise.

The chart below shares that 30 per cent of Non-World-Class (Non-WC) organisations rated Procurement as an Administrator while only 15 per cent of Non-WC organisations rated Procurement as a Valued Business Partner. So, if this is the stakeholder’s perception of the Procurement organisation, what are some things you can do quickly to change this perception?

What is the Current role of Procurement in supporting business success in your area?

Other than changes to the organisation structure, there are five things that we believe Procurement can quickly do to improve internal customer perception and exceed internal customer requirements:

  1. All Procurement resources should be customer focused and empowered
  2. Dedicate specific Procurement resources to Help Desk activities
  3. Start conducting monthly training to educate internal customers
  4. Create a monthly/quarterly newsletter and share recent projects, success stories and upcoming projects
  5. Create an internal website to share Procurement information: FAQs, contact information, approved suppliers, success stories, process documents, etc.

1. All Procurement resources should be customer focused and empowered

We often hear the comment that perception is reality – unfortunately, there is some truth in this. As Procurement resources are typically focused on assisting end-users with different processes in Procurement, all Procurement individuals (whether they are internal client-facing or not) should be customer focused which means being helpful in problem solving and troubleshooting, being proactive, being a good listener, and feeling empowered to fix processes that are broken.

The term ‘fit-for-purpose’ or ‘fit-for-risk’ comes to mind when addressing broken processes. As Procurement works to address issues identified by its internal customers, it should determine whether the process is adequate or overkill for what the internal customer is trying to accomplish based on the value and appropriate risk appetite of the organisation.

2. Dedicate specific Procurement resources to Help Desk activities

Procurement activities are a complex string of processes. As such, we should expect our internal customers to have plenty of questions related to the process, status of transactions, etc. Dedicating specific Procurement resources to answer questions from internal customers is one of many ways Procurement can help address and resolve questions in a timely fashion. However, it is important to note that the more knowledge the Help Desk resources have about the usage of Procurement technology, status of sourcing events, process for sourcing, and a broad understanding of Procurement, the better they will be at being able to provide first-contact resolution.

3. Start conducting monthly training to educate internal customers.

Conducting monthly/ongoing training to internal customers will help provide them with the knowledge and latest information to perform their jobs. Ultimately, this will also help Procurement. There are various types of training that can be provided to include:

  • How to create transactions
  • How to create spend analysis reports
  • How to identify approved suppliers
  • How to use e-catalogs
  • How to manoeuvre the ERP maze

During these sessions, it would also be helpful to document the various issues that each of the internal customers faces. By addressing these issues, Procurement will be able to 1) ensure that internal customer requirements are met and 2) improve internal processes.

4. Create a monthly/quarterly newsletter and share recent projects, success stories and upcoming projects

Most of Procurement’s work goes behind the scenes and rarely do we share our success stories for one reason or another. However, creating a monthly/quarterly newsletter will help provide our Internal Customers with additional information on how the Procurement organisation is able to assist, help identify new projects and bring to light creative ideas from previous projects. In addition, it is also a way of demonstrating value that Procurement organisations bring along with some shameless self-promotion.

5. Create an internal website

While the monthly newsletter is focused on sharing the latest news, an internal website is another way of allowing our Internal Customers to perform self-service. There are various reasons to create an internal website including:

  • Sharing of information with our internal customers
  • Providing them a portal to log issues
  • Providing them ability to self-diagnose and resolve issues

As a member of the Procurement organisation, our role is to help support internal customers by listening, understanding, meeting and exceeding their expectations. Being front and center to our internal customers is important. Hopefully, these 5 activities can quickly help your Procurement organisation change your internal customers’ perception.