Category Archives: Procurious News

The Moment When You Become Your Worst Customer

What happens when the shoe is on the other foot? What can you learn from being the customer?


By Billion Photos / Shutterstock

Recently I found myself buying graphic design services and it was a very interesting and informative experience. From the outset and initial engagement I was clear on the base concept and the output that I needed, but through the design process I found myself to be indecisive and part way through I completely changed track.

I’m sure we can all relate to these customer types that the company PATlive have coined.



  • The Complainer: A business’ greatest ally, this customer has a lot to be unhappy about and you’re going to hear all about it
  • The Overly Agreeable:These types will yes you to death and you never get to the root of their issues
  • The Expert: They know way more about your job than you do. Trust
  • The Pessimist: There’s a dark side to every solution. Well, the pessimist believes that’s true
  • The Staller: Hard to convince and hesitant, the staller can be a major toughie

In my experience, as the customer I became The Staller. It was such an unusual feeling for me and it made me think about communication styles and how we treat our stakeholders.

Stakeholder management

What is a stakeholder? Ultimately it’s someone that you need to work with from another part of the business in order to get things done. But really a stakeholder is just a person and the quickest way to keep things moving in your project, is to understand that person, what makes them tick and what world they operate in. You then need to adapt yourself in order to reach a successful outcome.

As a function, procurement can sometimes be considered a Dictator. Most of us would certainly never treat our customers that way, but, ultimately we are operating within a “rules” environment whether we are public or private sector. No matter how agile, flexible or creative we are, our game is managing risk. This can cause procurement people to put themselves in a position that is above the customer or stakeholder, in the earlier example we become “The Expert” and we expect the business to simply trust us based on our job title, our communication style can sometimes be influenced by this subconscious expert bias.

The mash up

In an information rich world, and information rich sector, overlaying customer types and communication styles can be a helpful way to ensure that we are efficient and effective. There are oodles of four box diagrams of stakeholder management, positioning, market dynamics, the list goes on and while this is interesting to understand categories of spend / suppliers and our business – it is largely academic. Just because a supplier sees your company as a “cash cow”, doesn’t mean that the relationship manager (who may be a “pleaser” type) will be seeking to exploit the contract. I find it much more effect to break down companies, contracts, teams and relationship contact points in to communication and customer types and to be open and receptive in stakeholder meetings

Back to basics

Tips for effective stakeholder meetings:

1. Prep

  • Be clear on what your questions are, what are the gaps that you need to know?
  • Be clear on your recommended way forward but be genuinely open to new ideas
  • Know the patterns of the business unit, the trends, what they’re likely to do and have plans A, B and C ready to go
  • Decide what you’ll concede on and what you will not

2. Chat

  • Meet face to face, or at least on the phone. The more connection the better!
  • Be open, be collaborative
  • But don’t be a pushover

3. Handshake

  • Agree what the actions are in a follow up email. We all know the people that smile and nod in front of you but run off and do the opposite! Take the time to follow up a summary of agreed points.

Learnings

By objectively observing my own recent experience, I was able to deepen empathy and understanding of what is like to go through a process you don’t understand or buy something that you’re not an expert in.

My designer being the super cool professional that she is, had me well and truly covered and had already seen my curve ball coming. Such is the role of any professional, she:

  • Know’s her stuff (technical knowledge)
  • Learned me as a customer
  • Interpreted my future needs to future proof hers
  • Led me through the process in collaboration even though she knew that I would land on the final concept right from the beginning

So what did I learn from this process?

It allowed me to fully understand that customers don’t always deliberately drag the chain, they don’t wake up in morning with the intention to delay the project, or with the sole purpose to throw out my work programme. That dilly dallying is not a sign of weakness. And that sometimes, I simply do not know better than my customer!

Although the above answers are tongue-in-cheek, there is some undercurrent of truth that I think we can all confess to thinking from time to time and so I encourage you in those moments to stop and consider how you would feel as your customer.

Extra for experts

When I was writing this it brought to mind the communication style toolbox “StraightTalk” this company has been around for awhile but for good reason, their communication styles make sense and they present them in a box diagram – procurement folk love a good box diagram!

Take their quiz and see what type you are!

Do You Know What Your Procurement Function Can— And Can’t—Do?

Leaders who know more about their procurement functions are more realistic about what procurement can do—and how much more it can achieve.

By RZ Images/ Shutterstock

For many business leaders, the procurement department may seem to rank low on the list of worries. In many companies, procurement accounts for less than one percent of the total functional budget, so it may not attract the same attention as functions with larger budgets. More importantly, however, we find that executives see procurement as purely a transactional function that executes commands and delivers goods, rather than a potential source of value.

But that myopia has consequences. The Global Procurement Excellence survey, encompassing more than 1,100 organizations worldwide, shows that the best-run procurement organizations have a far more accurate understanding of their own capabilities than other businesses have (Exhibit 1). Procurement followers, by contrast, are especially prone to overestimating their procurement skills.

Overestimating existing capabilities blinds companies to the need for improvement. And where is that improvement needed most? Certainly, procurement functions need to get the basics right in category management, global sourcing, supplier development, and risk management. But the survey data show that single most important driver of procurement performance isn’t in these “hard” metrics, but in “soft” metrics regarding the people in the procurement department (Exhibit 2).

Talent management is an especially major challenge, showing significant gaps between procurement leaders and followers. Scores were especially low on procurement career paths, consistent with perceptions of procurement as a field with limited advancement potential. Organizations that created selective job-rotation programs within procurement were more likely to be procurement leaders, as were those that made sure that high performers were well rewarded and moved on to other parts of the business.

Exhibit 1

Procurement leaders invest in talent management and set high aspirations

Exhibit 2

Procurement leaders are accurate in their self-assessment while followers fail to see performance gaps

Furthermore, with digital proving just as critical in procurement as in any other part of the organization, talent attraction and retention are becoming even more important for the future. Only by hiring, training, and retaining people with digital skills will procurement be able to deliver in an increasingly disrupted and competitive landscape.

These findings illustrate how important it is for businesses to keep procurement from becoming a backwater. It’s worth management attention, and it’s worth investing in procurement’s people.

This article was written by Riccardo Drentin, an associate partner in McKinsey & Company’s London office and Fabio Russo, an engagement manager in the Milan office.

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Redefining Procurement Excellence At The World Procurement Awards

Earlier this month Procurement Leaders hosted the World Procurement Awards 2019. And the winners are…


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Earlier this month Procurement Leaders hosted the World Procurement Awards 2019. The winners joined the ranks of the trailblazers before them and received the opportunity to proclaim their excellence to the world.

Now in their 13th year, The World Procurement Awards, in association with SAP Ariba, are the most celebrated and sought-after awards in procurement, recognising the most progressive people, projects and organisations across the globe.

The 2019 winners were announced during a prestigious ceremony hosted by Great British Bake Off presenter, Sandi Toksvig at the InterContinental London, The O2. The ceremony brought together 1,000 procurement elite and closed out the inaugural World Procurement Week, following the new Indirect Category Leadership Forum and industry-leading World Procurement Congress.

The independent regional judging panels were highly impressed with the quality of this year’s submissions: “The quality of the submissions is deeply impressive! What comes across clearly in almost all submissions is a
play-to-win mindset. We are fortunate to have that many top-notch procurement organizations across the globe creating real value for their companies.” Thomas Rothe, SVP, Procurement International, Strategy &
Governance, Bayer AG.

“It’s been an honour to serve as a judge for the awards. The process has been eye-opening as to the incredible progress being made by leaders of the function in areas from CSR to digital transformation, and becoming trusted advisors to their business stakeholders.” Howard Richman, CPO, Citrix Systems

All entries endure a thorough three-stage judging process, to ensure complete transparency and guarantee that the winners really are the best of the best. As another judge, Cindy Elliott, VP – Global Strategic Sourcing
at The Clorox Company explains: “To achieve the honour of being on the shortlist of winning entries, your submission is among the best-in-class of procurement being judged by leaders of multiple companies in a rigorous 3-step process! Congratulations!”

Other judges on the 2019 panel included senior representatives from Bugaboo International, Cisco, IBM Corporation, Mondelēz International, Novozymes, Siemens Healthineers, Swiss Re, and many more global leaders.

Congratulations to all winners and finalists and thank you to everyone who took the time to enter. We were overwhelmed with the sheer number of entrants and the evident innovation and passion displayed through these submissions.

World Procurement Awards 2019 Winners

Procurement Consultancy Project Award
Winner – MyBiz Solutions
Highly Commended – PwC

Procurement Technology Award
Winner – GEP
Highly Commended – Scoutbee

P2P Specialist Provider Award
Winner – Ivalua
Highly Commended – BuyerQuest

Corporate Social Responsibility Award, Partnered by EcoVadis
Winner – Mars Incorporated

Innovation Award, Partnered by Ivalua
Winner – Tomorrow Street (joint venture between Vodafone and Technoport)

Cross-Functional Collaboration Award
Winner – Mondelēz International
Highly Commended – GSK

External Collaboration Award, Partnered by Vizibl
Winner – China Mobile

Future Leader Award, Partnered by Capita Procurement Solutions
Winner – Cate Warman-Powell, BT, London

Risk Management Award, Partnered by IntegrityNext
Winner – Clariant

Supply Chain Initiative Award, Partnered by Maistro
Winner – IBM

Talent & Development Award
Winner – Turkcell

The ConnXus Supplier Diversity & Inclusion Award, Partnered by ConnXus
Winner – UNOPS

The GEP Procurement Team Award, Partnered by GEP
Winner – Heineken

The h&z Transformation Award
Transforming External Partnerships
Pioneering business impact Partnered by h&z

Winner – Vodafone Procurement Company

The h&z Transformation Award
Transforming External Partnerships
Pioneering business impact Partnered by h&z 

Winner – Vodafone Procurement Company

Internal Transformation
Establishing the function Partnered by h&z

Winner – Adidas

Cross-Functional Transformation Developing strong internal relationships Partnered by h&z 
Winner – Save the Children International
Highly Commended – Zalando

The SAP Ariba Procurement Excellence Award, Partnered by SAP Ariba
Winner – Vestas Wind Systems

The Smart Cube Procurement Leader Award, Partnered by The Smart Cube
Winner – Gary Foster, Highmark Health

Lifetime Achievement Award
Winner – Robert Monczka

Is Artificial Intelligence Destroying Your Job?

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.

By Leremy / Shutterstock

On 11 February this year, President Trump signed an executive order directing US government agencies to prioritise investments in Artificial Intelligence (AI) research and development. There isn’t any detail on how the AI Leadership executive order will be paid for, but as a statement of intent right from the top, it’s pretty powerful.  So, is this something you need to worry about?  Will robots be taking your job next Tuesday?  Probably not, but the answer is not as reassuring as it sounds.

When we think of AI, we probably think of Skynet (the evil computer that hunts humans in the Terminator films) or the similar tricked-up calculator that is the meanie in the Matrix films.  But real AI is a little more mundane.  It is more likely to be making sure your car headlights are on when you need them (and not on when you don’t), sending a nuisance spam call to your voice-mail or suggesting the next thing to watch on Netflix.  AI is the catchall term for software that can solve problems based on rules rather than a linear set of fixed instructions.  Really advanced AI can modify the rules based on how things turned out the last time or patterns that it detects in the environment.

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.  In recent decades we have seen this kind of automation steadily eat away at assembly line jobs as increasingly AI driven robots replace workers performing limited and repetitive functions.  A robot can sort big apples from small oranges more efficiently than a human and it never needs to take a break (or be paid). 

As the technology advances, it’s starting to creep into areas we might have thought of as immune from automation.  Medical diagnosis is increasingly the target for deep learning AI, the kind that recognises patterns and makes predictions based on those patterns.  During their career a doctor might see a few thousand x-rays or MRI images and get better at noticing patterns.  But AI software can review every x-ray ever made before the doctor has finished her morning coffee. 

A recent study, for example, compared the diagnostic precision of AI software with that of teams of specialist doctors from all over China.  The AI software was 87 per cent accurate in diagnosing brain tumours in 15 minutes.  The doctors could only diagnose 67 per cent and needed twice as much time to do it.  The AI increased precision and saved time because it was able to learn from a much larger base of experience than any individual doctor or team of doctors ever could. It uses like this that are why AI is predicted to add $15 trillion to the global economy by 2030.

President Trump joined the 18 other countries that have announced AI strategies since March 2017, because he wants the US to be a leader in AI rather than a follower.  And it is why investment in AI based startups jumped 72 per cent to almost $10 billion in 2018 alone.  

And even though some analysts are predicting 1.8 million jobs will be lost to AI in 2019 alone, those same analysts are predicting that the AI industry will create 2.3 million jobs in the same timeframe.  You can’t buy buggy whips now because the industry that created them was destroyed by Henry Ford, but there are many more jobs in the automobile industry he created than there ever were in the one he killed.

When analysts from McKinsey looked at the employment impact of AI in five sectors last year, they concluded that jobs which use basic cognitive skills, such as data input, manipulation and processing will likely decline, while demand for higher cognitive, social and emotional, and advanced technological skills should grow, as will the number of jobs that require customer and staff interaction and management.

If your job could be classified as administrative support then the future does not look bright.  And even if it requires you to do years of training so you can manipulate or recognise patterns in data, like those Chinese doctors, a financial analyst or a military strategist then AI will be coming to a workstation near you within the foreseeable future.  Humans are still a little too messy and unpredictable for the average AI bot.  So, if your job needs you to interact with humans and please them, such as in direct sales, management or counselling, then you are probably safe, for now.  And of course, if you are writing the programs that drive the AI then your career is assured.

AI is rapidly changing the face of the modern workplace.  And while nothing much will change by the end of the year, by the end of the decade, most jobs will be unrecognisable.  You’ve been warned. It’s time to transform yourself from a data geek to a people-person, before your computer takes your job.

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

7 Ways For Procurement To Drive Innovation 

How can procurement professionals drive innovation within their organisation, by working closely under the CEO.

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 “Conformity to the present is invisibility to the future.”  

Stefan Molyneux

Innovation is anything but business as usual. As procurement professionals, we are responsible for thinking of new ways of creating value, thereby bringing innovation into our organisations. We also have access to the most internal functional stakeholder teams and often act as a bridge between different departments on communicating key strategies. We have access to the outside world via our external supplier database. This puts us in a unique position to drive innovation even for new product development or ideas, in addition to bringing in supplier driven innovation

Have you read the fascinating fable centered around innovation called “How Stella saved the farm”? It is loosely inspired by the George Orwell classic, ‘Animal Farm’. It illustrates a framework of not just thinking about innovation, but also implementing it. Innovation is not a person or a department. It is a mindset. The approach outlined in the book can be replicated across any organisation that is willing to learn by doing.  In the book, the CEO, Dierdre appoints a horse called Mav as the ‘Innovation Leader’. As per a recent data from Entrepreneur magazine, 61 per cent of CEOs consider innovation a top priority and describe a lack of resources and a structured process as top challenges. I could not help but wonder if procurement can help organisations overcome these challenges due to the extended role we play as a “harbinger of innovation”.

The fable is about a mare called Dierdre who inherits her father’s profitable animal farm as the CEO and must find breakthrough new business idea to survive beyond the next few years. She is chosen to run the farm by her father over “The Bull” who learnt everything from her father and worked exactly like him. The Bull is naturally dissatisfied at not being chosen to run the farm. Stella is the bright, young sheep who travels the world and brings a new idea of running luxury wool (derived from Peruvian alpaca) business to the farm. Thus, begins the journey of implementing this idea with the help and expertise of all animals in the farm.

Here is my hypothesis on how Procurement can drive this process in the organisation, by working closely under the organisation’s CEO.

1) Need for Innovation:  In the words of Albert Einstein,” If you always do what you always did, you will always get what you always got.” The first step in the process of implementing innovation is the realization and honest acceptance that you need it. This understanding must be reflected unanimously across the organization.

2) Process for getting a breakthrough idea: The second stage is obviously pitching for “breakthrough” ideas to unleash creativity without defining restricted metrics. And what better way to get it than from your team and key internal stakeholders who know what a breakthrough can be, with the least effort and investment. Here, it can be procurement’s job to engage all departments. This exercise should lead to a creative dialogue to evaluate the ideas holistically and end with the selection of the right best idea to focus collective organisation energy on.

3) Communication to the right channels at the right time: As they say, ‘Finding the right idea is only the beginning’, so an organisation working on a new idea would allocate resources towards it and communicate the priorities to the different departments and across the hierarchy. This is easier said than done, as many changes will occur during the project and the communication on changed priorities will often end up making teams confused on what roles they need to play for the idea. Procurement can ensure that changes are articulated clearly and explained to everyone throughout the idea execution so that everyone is involved in playing their roles. Thus, leveraging our project management skills and providing stewardship.

4) Flexible organisation structure to facilitate new areas: During innovation, it becomes important that organisation structure is not set in stone and can change as you discover the bottlenecks in the implementation. Procurement can be proactive in identifying these bottlenecks by working across departments and suggesting corrective changes. 

5) Facing Reality of what the customer wants: Sounds like the most obvious one, though it could be an acid test to know if you are producing what you can, or are you producing exactly what the customer wants you to produce. At the time of idea testing, procurement can engage its external resources to do a deep dive on the customer need and provide concrete data on the idea. If the data suggests that the idea should be modified or changed to meet market requirement, then procurement would need to influence a change in strategy in line with customer needs.

6) Organisation culture issues: These are bound to happen for an organisation trying to embrace change. It would involve “letting go of control” for some team members and it is one of the most difficult tasks to do in the way of change to make an inclusive environment. Procurement’s role could be to team up closely with CEO and HR to resolve these issues timely.

7) Measuring the Innovation:  Procurement pros need to work on defining metrics for measuring innovation such as defining a clear hypothesis, identifying most critical unknowns while planning, analysing results and deciphering the lessons learnt. These will help drive innovation culture within the organisation in the long term.

Organisations can reflect on below questions more objectively during a new idea development or innovation process- 

Is our idea a breakthrough idea? Are we making something that the customer wants? Do we have the right team structure? Are we communicating enough and well? Are we learning to innovate? Are we measuring innovation in the right way?

They would often discover that what they assume to be a fault with the idea, is sometimes more a fault with the execution. This is where giving clear ownership to procurement as ‘Innovation Leaders’ would help as procurement brings in its existing skills and develops further its skills of cross-company collaboration, communication and influence.  

What do you think about procurement playing the role of ‘Innovation Leaders’ for new products or ideas in your organisations?  What could be the challenges we face if we take up this role? How do you think we can overcome those challenges?

The Three Keys To Building More Influence

How are you letting perfection get in the way of offering an important (and influential) contribution?  

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Have you ever wondered why some people are able to lead and influence those around them while others are left out in the cold?

They may be less charismatic, a poor presenter or frightfully timid, yet they influenced the other party enough to move them through to a decision where perhaps you couldn’t?

In many cases, the element that stood them apart from the crowd was nothing more than trust – trust that that person was genuine, capable and had the integrity to stand by their word.

Confucius said: “Better a diamond with a flaw than a pebble without”. Voltaire wrote: “Perfect is the enemy of good”.

In decades past, huge fortunes were made by organisations that understood this. Companies like General Electric, Westinghouse and Ford Motor Company all dominated their respective fields through this principle.

Very little has changed since those days – despite the increasing sophistication of advertising and corporate shine. The Nielsen Global Online Consumer Survey claims that only 33% of people now trust brands, while 90% of people trust service or individual recommendations directly from people they ‘feel’ they know.

I want you to pay attention to that last part – ‘feel they know’. What does it take to feel you know someone?

In my world that’s called influence. It involves sharing enough of yourself so that I trust your intent. It involves stepping out and letting your voice be heard. Having the courage to leave the jargon behind – and share real insights, predictions and opportunities based on the hard yards of your experience.

Those who can build this level of connection – either online or in your organisation – generate more engagement, have a greater impact on decision-making, a more frequent seat at the table and face less opposition when it comes to implementing change.

So how do we do it?

More process, less perfect

If the average social media feed – or corporate presentation – were to be believed, just about every single one of us would look like we’re a) getting the perfect results b) enjoying an endless cycle of tropical beach holidays, or c) tucking into the world’s best meal in the fanciest restaurant in town.

If we’re looking to create real engagement, a ‘polished and perfect’ image just won’t cut it.

It takes courage to show vulnerability and let people know that our results and lives aren’t always perfect (and therefore we aren’t always perfect). And yet – here’s the irony. That’s exactly the most impactful thing we can reveal.

Show me a mistake you made – and I will know you have the courage to pick yourself back up when things go wrong – the curiosity to get to the bottom of what doesn’t work – and the tenacity to keep going until a better solution is found.

Tell me about a question you haven’t been able to answer yet – and I will feel invited to contribute – impressed by your determination to always get better – and connected in the shared vulnerability of not knowing it all.

Essentially – I will feel something. As opposed to the disconnection we are often left with when only someone’s ‘best moments’ are shared.

Be intentional and capable

While we don’t want to portray a picture-perfect image, that doesn’t mean that we should be showing up looking tired, unprofessional or underprepared either.

If our goal is to build trust and influence others then it’s far more effective to be intentional, and to reveal those intentions to our target audience, rather than flounder around without direction.

We need to show that we’re capable of handling the challenges that are thrown at us. We might make mistakes along the way, but we also need to make it crystal clear that we have a clear direction about how we will move forward despite setbacks.

Talking about what is important to us, the ideas behind our intentions, the experiences that led us to those ideas and our goals for the future – these are the traits of trusted leaders.

Take us on a journey

If you’ve been working on your project for weeks and had to scrap the whole concept and start again with a new approach, write about it!

Create a monthly update for your team or stakeholders. Start a blog. Let your audience know that you are there to out-contribute everyone else in your field. That you’re willing to share what you’ve learnt, and as a result the future trends, opportunities or challenges you see coming in your field.

They’ll appreciate the fact that you’re letting them follow your journey – and will value the end result infinitely more if they know your history and feel involved in the process along the way.

It also gives them more exposure to you as a person, and the longer they keep you in their lives, the more likely they are to trust you.

Many project managers make the mistake of keeping their project under wraps until it’s 100% complete – and ready to reveal to their organisation with a big fanfare.

The problem with that plan is that the audience hasn’t been taken along on the journey – so the end-product they’re presented with fails to get any attention. A little like watching the final five minutes of a movie and trying to care about the characters or plot!

So – what’s the bottom line?

I want you to take a step back from any place where perfection is currently holding you back. From engagement, from sharing your mastery, experience or insights. From essentially stepping out and actually being seen.

Then I want you to ask yourself these questions – what passionately imperfect contribution could I make here? How am I hiding behind technical language and not revealing the real story or opportunity? How can I invite others to contribute and engage with the outcome?

Do those things – and I promise you will significantly increase your influence (and results) in all the places where it counts. J

Procurement Across Borders – Looking Into The Cultural Mirror

A useful tool for developing cultural intelligence is the Cultural Mirror, which plots culture across nine dimensions…

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As part of our ongoing article series on Cultural intelligence (CQ) we are discussing each of the four individual components of CQ and how they can be applied to effectively work across cultures. In earlier articles we discussed what Cultural Intelligence is and CQ Drive, which is the motivation that individuals have in approaching and interacting with different cultures. Now we move onto the next component which is CQ Knowledge.

CQ Knowledge refers to your own personal knowledge and understanding of other cultures. Differences and similarities between cultures can be assessed in terms of core values, beliefs, norms and behaviour.

A useful tool for developing CQ Knowledge is the Cultural Mirror, which plots a culture on nine dimensions. These dimensions are based on the work of anthropologist Geert Hofstede, Fons Trompenaars and Asma Abdullah that I amalgamated. The Nine Dimensions of Culture provides us with a continuum of values and by exploring each of these and where a culture sits on the continuum, we are able to gain insight into the culture itself and how it operates. It is critical to firstly appreciate where you sit on the cultural mirror yourself.

Here is the Cultural mirror and the Nine dimensions:

We will look at the first three dimensions in this article and understand what they are, how they are applicable and provide some tips on how to navigate these cultural differences.

Dimension One: Relationships – Task

In some cultures around the world the focus in the early stages of interactions is on building the relationship. In these cultures, getting to know the people and establishing trust is much more important than simply achieving the task. Examples of countries on the relationship end of the continuum are Saudi Arabia and Brazil. In other cultures the initial priority is on getting the task done. This is not to say that the relationship is not important, however the focus is primarily on getting the task done before building the relationship. Examples of countries that are on this end of the continuum would be Australia, Germany and Finland. In both situations, the outcome is to get the task done but the approaches are different.

Tips for those coming from a relationship oriented culture working with a task oriented culture:

  • Be focused and clear on outcomes
  • Give clear instructions about the task

Tips for those coming from a task oriented culture working with a relationship oriented culture:

  • Spend time initially building the relationship
  • Invest in small talk to make people feel more comfortable

Dimension Two: Harmony – Control

This is the view of how humans deal with the environment, nature and with people around us. People from harmony based cultures believe we need to live in harmony with nature and have an external locus of control. They believe in concepts such as yin and yang, fate, destiny and karma. Countries which are more on the harmony end of the continuum include Pakistan and China. Conversely, people from control based cultures believe that you are the master of your own destiny. You are in control of your life and you need to control the environment. Countries more towardes the control  continuum  are the USA and Switzerland.

Tips for those coming from a Harmony based culture working with a Control Culture:

  • Be aware that rigorous debate maybe encouraged
  • Be conscious of delivering on timelines

Tips for those coming from a Control based culture working with a Harmony Culture:

  • Be mindful that open conflict is likely to be avoided
  • Learn how to disagree in a polite manner

Dimension Three: Shame – Guilt

 In shame orientated cultures, avoiding a ‘loss of face’ is important. Thus, what others think of you and how they judge you is a strong motivator. Examples of countries which are more on the shame end of the continuum are India and Japan. Conversely, in guilt based cultures, it is more about up to the individual to judge themselves on their conduct. Guilt based cultures include Italy and Argentina.

Tips for those coming from a shame based culture working with those from a Guilt Culture:

  • Allow time for experimentation and brainstorming of ideas
  • Appreciate that candour may be present and encouraged in discussions

Tips for those coming from a Guilt based culture working with a Shame Culture:

  • Encourage participation through group based tasks to remove attention from individuals which may cause “loss of face”.
  • Do not expect public or rigorous debate

For the three dimensions we have discussed, please consider where your cultural preferences are and how that influences your interactions with others from different cultures?

Is Employee Turnover Killing Your Profits?

It’s a good idea to get the bottom of why employee turnover happens and how to limit it.

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Employee turnover costs US businesses more than one Trillion (1,000 Billion) US dollars a year.  That represents about 10 per cent of all US corporate profits, so it is nothing to be sneezed at.  It is therefore probably a good idea to get the bottom of why it happens and how to limit it.

According to the latest statistics from the US Bureau of Labor Statistics, the average US business turned over 44 per cent of its employees in 2018 and in some industries it was significantly higher.  It was 87 per cent in the Arts and entertainment and 75 per cent in accommodation and food services. At just under 15 per cent, Federal government agencies experience the lowest turnover.

Gallup research suggests each employee loss costs the business 150 per cent of their salary.  Deloitte Consulting partner Josh Bersin says his research shows that, depending on the position,  it could be as high as 200 per cent by the time you account for hiring, on boarding, training, ramp time to peak productivity, the loss of engagement from others due to high turnover, higher business error rates, and general culture impacts.

Besides those obvious cost cascades there are some less obvious, but no less important costs.  The significant direct costs put real time pressure on an organisation to hire a replacement and get them trained, settled and productive quickly.  The pressured hiring process can often lead to the new hire not being a good fit for the job and leaving (or being let go) within a year, thus compounding the costs.

The Harvard Business Review says that as much as 80 per cent of employee turnover is due to bad hiring decisions.  Similarly Leadership IQ’s Global Management Survey reported that 46 per cent of new employees turn out to be a bad hire within 18 months and only 19 per cent will turn out to be an unequivocal success.  When it came to teasing out the factors behind the failure they found  a lack of technical skills explains only 11 per cent of new hire failures, whereas coach-ability (the ability to accept feedback from bosses) accounted for 26 per cent of failures. 

Employee turnover is very real and very costly, so doing anything at all about it, no matter how small the impact, is likely to be a good investment.  The research suggests that there are some especially important factors that are key to retaining employees (that you want to retain).

Obviously the first rule is don’t rush.  It is important to ease a potential new hire into a job.  Ensure they have a good sense of who they will be working with and what the expectations are well before they are signed on.  This means going beyond the standard probation period clause and pro-actively ensuring compatibility with your culture and team preferably before they start.  Throwing a new hire in the deep end and hoping for the best is likely to be a bad idea.

Pay is also obviously a factor but the research shows that if the only thing you do is throw money at them, you are unlikely to be able to stop a valued employee leaving. While being paid too little for the role will definitely motivate churn, overpaying will not make up for an unhappy workplace.  A workplace survey by Equifax for example found that 44 per cent of workers who leave within a year take a pay cut. They want to get out so bad, the pay is not enough to keep them there. 

Pay does have an effect but it is relatively small. According to Glassdoor surveys, every 10 per cent increase in pay only reduces the likelihood of an employee leaving by 1.5 per cent.  So if you double their pay they are still 85 percent likely to leave. 

On the other hand opportunities for advancement and training are significant factors in employee retention.  Humans like to feel they are getting somewhere. Research repeated shows that role stagnation leads to turnover.  Glassdoor have even put a number on this, saying that every 10 months at an unchanged role increases the likelihood of an employee leaving by 1 per cent. 

According to exit surveys conducted by Gallup, more than half of all exiting managers say that in the 3 months before they left, no one in the organisation spoke to them about how they were feeling about their job or their future with the organisation.  If no-one is talking about your future with the company, it’s easy to come to the conclusion you don’t have one.

Gallup recommend proactive engagement about an employee’s opportunities for growth are key to retaining valuable employees.  They suggest you know the employee’s long term personal goals, allow them opportunities in roles bigger than their past experience and help them to acquire new skills to advance their careers.  In short, treat them as you yourself would like to be treated.  Let’s call that the Golden Rule for Employee Retention.  You could so a lot worse than applying it in your business.


Supply Chain Pros: Could AI Save Your Day Job?

Supply chain leaders know AI is a game-changer, a technology that will allow them to optimise their supply chain for competitive advantage. But just how much will it impact your profession?

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Today, business leaders are looking to their supply chains to create differentiation and they recognise that data is a key driver. Having said that, only a small fraction of supply chain data is effectively used, and most companies are virtually blind to data that is unstructured – for instance, from social, weather and IoT sources. With limited visibility it’s difficult to optimize supply chain operations, leaving the business exposed to unnecessary disruptions, delays and risks, as well as increased costs. In fact, 87 per cent of Chief Supply Chain Officers say it is extremely difficult to predict and manage disruptions.

Supply chain leaders know AI is a game-changer, a technology that will allow them to optimise their supply chain for competitive advantage. They understand and have relied on descriptive analytics – using massive volumes of data within the enterprise to understand better what has happened in the past and what is happening today. They’re now ready to explore how to use AI to see beyond the four walls of their business; understand how potential disruptions in the environment could impact the supply chain; and act quickly to seize opportunities or mitigate risk.

A new era of AI in the supply chain

Already, AI capabilities in IBM Watson Supply Chain Solutions are moving from descriptive analytics to predictive insights. We’re helping clients look ahead of supply chain events and see likely delays, demand spikes, supply changes and stockouts with new capabilities, such as anomaly detection in supply chain processes and leveraging conversational analytics for response management. Going even further, we are showing clients the power of prescriptive analytics, where Watson evaluates several dynamic parameters associated with a supply chain scenario and in near real time suggests the best actions and can even automatically create supply chain playbooks.

But this is not the end of the journey. We are also creating a plan where Watson adapts on its own, learning what matters to you and developing the capability to show you where to focus your attention to mitigate disruptions and take advantage of opportunities.

Here are some new capabilities available today (and some that are still to come!) :

  • Expanding data sources for Watson – IBM Supply Chain Insights allows us to add new data sources specific to each client’s challenges in as little as five weeks, accelerating the content that Watson draws from to gain intelligence, from basic ontology and supply chain terminology to weather and now many more external data sources. 
  • Anomaly detection – This new capability in IBM Business Transaction Intelligence for Supply Chain Business Network tracks supply chain transactions, spots anomalies and provides early warning signals so you can discover potential problems and take corrective action sooner. 
  • Optimising order and response management – IBM Order Management software uses AI to select the best location to fulfill an order, adjust availability promises and safety stock levels, and empower customer service reps to make more informed decisions and answer questions with greater accuracy and speed.
  • What’s next for AI – In the future, Watson Supply Chain capabilities will include predicting supply chain cycle times, to new frontiers where Watson adapts to your supply chain and users and learns about trends, issues, actions and behaviors to make recommendations. 

Could AI save your day job?

On 30th April I’ll be taking part in a new Procurious webinar: “How AI Saved My Day Job – Confessions from a Supply Chain Pro.” We’ll be exploring the real-life applications of AI in workplaces today and the problems it can solve for supply chain professionals.

How AI Saved My Day Job – Confessions from a Supply Chain Pro will go-live on 30th April 2019. Sign up here (it’s free) to join the Supply Chain Pros group on Procurious and gain access to this webinar.

7 Tips On Mentoring Your Reports In The Art Of Negotiation

We spoke to seven procurement experts to hear their advice on mentoring junior professionals on the art of negotiation…

By Jacob Lund/ Shutterstock

For any junior buyer, going head to head with an experienced negotiator can be especially intimidating. In many cases they are thrown into the deep end without enough preparation and guidance by their colleagues and superiors. For this piece, Giuseppe Conti, Founder and Managing Partner of Conti Advanced Business Learning interviewed seven procurement experts and leaders in their respective industries to find out their advice on teaching direct reports the art of negotiation.

1. Access to training and development programs

Over the 35-years that I have been in the procurement and supply function, I have found the following three approaches in coaching for the preparation of negotiations to be critical in order to become a respected and effective functional leader and a consistently successful negotiator:

The first is to coach “win-win” outcomes in business negotiations, aiming for partnerships with suppliers instead of taking the “arm’s length” approach to relationships that are so common. Secondly, to provide access to training and development programs that genuinely help individuals to strengthen their potential for success in negotiations; not just from a functional or technical perspective, but equally in soft skills. Lastly, to mentor and encourage the development of emotional intelligence (EQ) in how we are perceived in our professional engagements and how this can be leveraged or disable our ability to deliver successful negotiation outcomes. 

Les Ball, Chief Procurement Officer, ABB Motors and Generators

2. Exposure to more complex negotiations lead by experienced sourcing professionals

I use a three-faceted approach when mentoring direct reports to negotiate. Firstly, I make sure that all ‘on-the-job’ elements of negotiation preparation are available, this includes understanding market forces, supplier/buyer strengths and weaknesses, leverage tool kit, leading post negotiation assessments to name a few. Secondly, I want to ensure my more junior direct reports are exposed to more complex negotiations led by experienced sourcing professionals and over time, provide more opportunities in real negotiations to improve their skills in the field. Finally, it is a must to provide high-quality external training to keep learning new negotiation techniques and strategies.

Elodie Cramer, Associate Director of Biogen

3. Negotiating together

I believe in learning by doing. The best way to help and improve the negotiation skills of direct reports is to undertake a negotiation together. Use these opportunities to provide feedback and reflect on what went well and what didn’t. I also believe that after any important negotiation you should have a post-mortem review. Younger negotiators need to have an internal, or external, coach to guide them in preparing and delivering a negotiation. This includes a rehearsal before a big negotiation, which is not often done by buyers.

Guillaume Leopold, Procurement Advisory Partner, Ernst & Young

4. Scenario planning

Scenario planning and role playing can really help accelerate a person’s ability to negotiate. Do they know who is coming and what their expectations are? How are they going to open the negotiation and present their needs? Have they considered what the responses may be to their arguments and how to counter them? Additionally, coaching in other facets such as learning to actively listen and what topics or words not to say are just as important as rehearsing the key arguments. 

Jon Hatfield, Director Global Supply Management, PPG

5. Joint preparation

Spending time with them during the preparation phase gives direct reports more assurance. This is especially evident for complex negotiations, for instance when suppliers may also be customers. Consequently, collaboration becomes an absolute necessity.  As a group, we organise simulations and role plays in order to practice, exchange, discuss, review the negotiations and our performance in them. This team element ensures that they can learn from me and I can learn from them.

Christophe Schmitt, Head of Strategic Supplies, Omya

6. Sharing of current negotiations as a team

I like to set up regular physical meetings with all my direct reports to share and think collectively in a secure environment. By creating a friendly and open-minded atmosphere, we can share our current negotiations, the techniques we used and the challenges we faced. We would discuss the approaches, the outcomes and brainstorm on any alternative ways.

Olivier Cachat Chief Procurement Officer, IWG

7. Role playing acting as the supplier

Role playing is my favourite method. Specifically, I would ask my buyer to brief me on their strategy then, when we role play, I take the role of the buyer and get my colleague to experience how the supplier may feel and react to their argument and proposals.

Giuseppe Conti, Founder and Managing Partner, Conti Advanced Business Learning

The following answers were collected by Giuseppe Conti, Founder and Managing Partner of Conti Advanced Business Learning (www.cabl.ch), a consulting firm that specialises in negotiation & influencing. This article is part of a series aimed at collecting real-life negotiation experiences from Procurement executives.

Check out the other articles in this series:

Part One – Seven Negotiation Fails We’ve All Experienced

Part Two – Seven Negotiation Tricks Procurement Procurement Professionals Must Know