Is it acceptable – or not – to send your supplier a letter asking for a discount? You would be surprised…
Here at Procurious, we’re always trying to be progressive, challenge the status quo and push for our profession to be more innovative and value-adding. And in good news, we’re starting to see that many in our community feel the same. How do we know?
In a now-viral post on LinkedIn, our Founder, Tania Seary, posited the question: Is it fair, or not okay, to send your supplier a letter asking for cost cuts? 50,000 views and 60 comments later, we now know this is a hot topic for our community!
It’s something we’ve debated before, but not to this degree. So in times where businesses all over the world are struggling, and there’s more pressure on procurement than ever before to secure discounts and keep organisations moving (or afloat?), is it fair game to demand cost cuts from your suppliers? Here’s a snapshot of what everyone thought … see if you agree.
‘A stuck in the nineties’ approach
The vast majority of people who commented on our post did agree that this year has been a particularly challenging one for businesses and by association, for procurement. One Senior Procurement Director summed it up when he said:
‘Procurement leaders need to be looking for cost reductions to support the strained financial positions of their organisations.’
Yet should those cost reductions come from a demand letter sent to your supplier? Many people did not think it was okay to send your supplier a letter demanding cost cuts, regardless of the organisation’s circumstances. In the main, procurement professionals thought this approach was akin to a ‘power play’ and was a little arrogant, giving off the attitude that a big organisation is simply ‘a big brand, doing it because they can.’
Many procurement professionals recognised that while this tactic may have been appropriate at some other time, it no longer was. In fact, many people made reference to the nineties as a time where this may have been acceptable … but realised that those days were far gone. One person noted:
‘This practice [the practice of demanding reductions] was used at Volkswagen in the 90s under its famous CPO. Though it showed a lot of success at the time, I believe such a practice belongs to the 90s – a lot has changed since then.’
Why doesn’t this approach work?
Beyond the fact that the practice of sending a letter asking for a discount seemed ‘old-school,’ many professionals noted that for at least a few reasons, this tactic doesn’t actually work.
The first reason why people thought this wouldn’t work was because essentially, demanding a discount goes against all the good work that procurement usually does in developing meaningful and strategic supplier relationships. Procurement professionals always need to remember that suppliers exist within a delicate business ecosystem, and it’s best to manage this responsibly:
‘Customers depend on suppliers and vice versa. It’s a big ecosystem, and [we all need to remember that] if you squeeze out small suppliers and competition lessens, costs will inevitably increase.’
Beyond this, though, when making demands of suppliers, procurement professionals need to remember their negotiation training, insomuch as:
‘Blind one-size-fits-all letters are a forced outcome, not a negotiated win-win discussion.’
What’s the alternative?
It seems that within the procurement community, sending letters requesting discounts is absolutely a no-go. But in a time where discounts might, for some companies, be needed more than ever, what is the alternative?
Being the savvy community that it is, procurement professionals had plenty of better options when it came to negotiating a better price.
The most popular suggestion was to employ a process to assess cost saving opportunities in partnership with your supplier. This would lead, according to a few different people, to the supplier further negotiating, and then a potential automatic reduction in expenses for both.
The other option available is to negotiate better terms, a tactic used often, but which should be done through a strategic lens. One person recommended that we all should:
‘Engage with our suppliers and explain what we need in terms of realistic cost savings and the end goal.’
‘You’ve got many tools at your disposal, including SRM and category management, so much so that you need never revert to the dreadful “give me money off or else” letters.’
Do you agree? Or would you still send a letter requesting a discount if you needed it? Let us know in the comments below.
Finding a great mentor can catapult your career – here are the defining attributes of the perfect mentor to look for.
The saying goes that no man is an island, and in a career sense what that really means is: the office can certainly feel like unchartered territory without a mentor. A mentor is something even the most talented people in the world want and need – famously, Larry Summers mentored Sheryl Sandberg, and Maya Angelou mentored Oprah Winfrey. And everyone who has ever had a mentor knows that they can be the shining north star you need to succeed, and can help you navigate everything from difficult decisions to new opportunities. They can even become lifelong friends and sponsors within an organisation, helping oversee your ascension to dizzyingly heights.
Many – if not all – CPOs credit their success to a mentor or two along the way. And this year, with COVID making it one of the most challenging years to date for a lot of us, a mentor is more important than ever to help you navigate the murky waters of leading through and after a pandemic.
But unfortunately, not all mentors are created equal. Some really go above and beyond, yet some are not quite as useful. But how do you know the difference from the outset?
We spoke to two successful senior professionals, Sally Lansbury, Memberships Director at The Faculty Management Consultants and Helen Mackenzie, former CPO and Principal Adviser at Procurious, about how mentors have helped shaped their careers, and what exactly we should all look for in our next mentor:
What should a mentor experience be like?
Sally and Helen both believe that a mentoring experience should be an overwhelmingly positive one, where you get to tap into the wisdom of someone experienced, and use them as a sounding board to navigate challenging situations. Both women said that in their past, they’ve had both formal and informal mentors, and that these mentors have helped their careers in ways they’d never imagined.
Sally found her previous mentors extremely valuable in that she was able to learn about them, as well as use them to help her navigate decisions:
‘For me, I have found a mentoring relationship to be particularly important as I always learn so much from other people’s experiences.’
‘I’ve also found that mentors are great people to bounce ideas off when you’re unsure of something.’
Helen also felt that her mentors were great sounding boards, but found that they were particularly useful in a different way. When Helen was eyeing the top job (of CPO in the organisation she worked for at the time), she felt that her mentor helped her hone her leadership skills:
‘The mentor I had leading up to my promotion to CPO was exceptional. She helped me understand what leadership skills I needed to take that next step.’
Since changing roles from CPO to consulting, Helen has herself had the experience of being a mentor, a role which she describes as challenging but ultimately rewarding. And in a nod to her leadership capability, Helen now typifies what we all aspire to in a mentor:
‘Right now, I’m mentoring a young man in a leadership role who is trying to navigate how to do this in an inclusive way. It’s been challenging for me to think about issues like diversity and of course gender equality from this perspective.’
‘But that’s the beauty of being a mentor. You always aim to put in so much more than you get back in return.’
What qualities should you look for in a mentor?
So how do you tell the difference between an exceptional mentor and one that might not be as valuable? Sally, who has overseen The Faculty’s Roundtable Mentoring Program, which has, to date, seen over 1000 people receive mentoring, has a good idea of the qualities you should look for. These, she says, are:
‘The ideal mentor should have a growth mindset and a learning attitude. They should have a genuine interest in helping you, and be able to commit real time and energy to it.’
‘That also need to have current and relevant industry knowledge in the area that the mentee wants to develop in.’
Helen agrees that these qualities are important, but she says that you need to put more focus on the person, as opposed to the qualities. Specifically, she describes the ideal mentor as someone who isn’t the same as you:
‘Your mentor should be different from you so they can give you another perspective on the world. We spend a lot of time these days on social media in an echo chamber with people who think the same as us.’
‘A mentor should give you the opportunity to challenge your thinking. But you also need to be able to relate to and trust them, otherwise the relationship won’t work.’
How do you know if your mentor isn’t right for you?
If your mentor doesn’t have all of the above qualities, does it mean they’re not right or worse, that they’re not doing a good job? Not at all, says Sally. In fact, in a mentoring relationship, the ball is absolutely in your court when it comes to making the effort to make the arrangement work for you:
‘With mentoring, you only get out what you put in. As a mentee you need to be organised and be clear on your objectives at all times.’
What kind of experience have you had with mentors? What qualities do you look for in a mentor? Let us know in the comments below.
As you move forward with your career, remember it is not just about the number of connections you have – it is about the quality of your connections. As the old adage goes “ it is about who you know, rather than what you know”.
As the majority of us spend more time working from home in the “new normal” way of working, being connected is more important than ever.
Be connected with your peers from a cross section of industries
Being connected to your peers, not from just your industry but across sectors, is a great way to learn both current and future best practice. You can discuss key topics of the day and benchmark your procurement and supply chain maturity, both as an individual and as an organisation.
I have learnt so much from being a member of The Faculty Roundtable (whilst I lived in Australia) and the Procurious Roundtable (now that I am back in the UK). Not only through the top drawer guest speakers that come and share their knowledge, but through the connections I have made from being a member.
Making the time to attend these events is always a stretch, but the benefits massively outweigh the time required to catch up at work.
Investing the time to listen to the challenges and opportunities that others face, and discussing these in an open forum with your peers, can be truly enlightening. When you have had the fortune to share ideas with the likes of Paul Menzies, Len Blackmore, Naomi Lloyd, Andrew Ordish and Matthew Kay in Sydney or Matt Beddoe, Phil English, Bruce Morrison, Lauren Ferry, Chris Eccleston and Ross Mandiwall in London (or virtually), you know the power of a strong peer network. Learning from professionals with extensive experience in a vast array of industries provides a diversity of thought that helps you improve as a person and enhances your strategic thinking and knowledge.
Be connected and highly engaged with your own team
With an ever-increasing myriad of stakeholders to manage, it is imperative that you create enough time to manage your own team. Whether face to face, by Teams, Skype or Zoom, I try and create enough time for team meetings, one to ones and other connection opportunities.
Building great relationships with your team helps you to build a great team ethos, with everyone pulling in the same direction with no room for mavericks or terrorists. I always remember someone telling me that you need to spend 30% of your time with your people, listening, encouraging and developing them. And they were right.
Also remember it is important to connect with not only your direct reports. Over the last couple of years we have introduced a Procurement Development Group at Murphy. It enables the up-and-coming procurement team members to work on some key topics set by the procurement leadership team. The Procurement Development Group presents their recommendations to the senior team, giving them exposure to people they don’t often come into contact with. This opportunity has been really appreciated by our future leaders and can lead to accelerated career progression. Their work has produced some fantastic results for our organisation – so it has been a win–win for everyone involved.
Be a Mentor and Be Mentored
Mentoring, or being mentored, is another great way of keeping connected. I am big believer that having the right mentor can help with your career progression. Each of the key members of my team are either mentored by a Senior Director at Murphy or by a leading CPO, arranged by Procurious, from an external organisation – and the feedback I receive on this is so positive!
I enjoy mentoring people. I get as much out of the sessions as the mentees. It is great to get different views, hear other’s perspectives and see their careers flourish.
Never be too intimidated to ask someone to mentor you. After all, what is the worst they can say? “No”? And if they say yes, remember that it is you – the mentee – who needs to drive the relationship. As with everything, you only get out what you put in.
Be connected – inside work and out
With the COVID-imposed increased isolation, we are all faced with the challenge of ensuring we are both physically and mentally healthy. A great way of taking your mind off the job is by doing something outside work that you really enjoy and involves interaction with others.
We all need to give something back to society. It provides such fulfilment. So whether it is charitable work or sport, get connected externally and make a difference.
My great passion, in addition to my family, is rugby. It has given me so many amazing experiences and memories over the years. When I was asked to become Chairman at the Club I played at for 20 years, there was only one answer!
I am now in my second season. This opportunity has given me a host of new challenges and learning experiences, which I am thoroughly enjoying. It has also afforded me the chance to meet and work with some more amazing people, keeping me ever more connected.
As you move forward with your career, remember it is not just about the number of connections you have: it is about the quality of your connections. As the old adage goes “it is about who you know, rather than what you know”.
It is much more important to maximise the value you get from a few, quality connections and making sure you deliver value to your connections.
COVID-19 has created a significant opportunity for generation next to lead, grow and advance. Here are five steps to break through.
Are you satisfied with your current position, or are you eager to break out and change the game?
Do same-old, status quo procurement and supply chain strategies work for you, or are you ready to rewrite the playbook for the modern era?
Procurement’s impressive performance during COVID-19, and the critical role the function plays in the ongoing recovery, has created significant opportunity for generation next.
Are you going to take advantage?
The doors are wide open. And the rewards are substantial. Think promotions, increased comp, resources, access to emerging tech, leadership opportunities, validation and trust from the c-suite, and much more.
But the doors won’t stay open forever. Now is the time to hustle and own your opportunity. If you’re not entirely sure where to begin, consider these five key steps to break through in today’s market.
1. Want more attention? Make your mark where it matters.
The fastest way to get noticed: push forward the strategic, board-level objectives of your organisation.
What tops your CEO’s agenda right now? If you don’t know, request an immediate alignment meeting with your CPO or team lead. Our research found that the c-suite’s top three focus areas today are mitigating supply chain risk, containing costs, and driving business continuity.
These three areas are your golden ticket. Get creative and be bold with your recommendations. Leadership is looking for fresh and modern ideas, not a repeat of yesterday’s strategy. Don’t hesitate to share, even if your recommendations represent a new approach for your team.
Start by thinking outside the box: Is there a use case for AI, blockchain or predictive analytics? What about partnering with a peer or competitor to solve the problem? If you can drive the results the company needs faster and more effectively than in the past, the recognition will follow.
2. Market your success like crazy.
It’s always a team game, but if you don’t advocate for yourself, who will?
Keep track of your wins and benchmark performance over time to demonstrate improvement. And report with data, not anecdotes.
Be sure to communicate like an executive when sharing your success up the ladder. The TL;DR (too long, didn’t read) phenomenon is a very real trap. Lead with the headline, back it up with data and close with how you plan to take it up to another level.
Remember, you, and you alone, are responsible for your career growth.
3. Champion digitisation and emerging tech.
COVID-19 rapidly accelerated the enterprise digitisation journey and eliminated all the old excuses associated with delayed tech transformation projects.
Every executive is looking to increase resilience, productivity and performance. Digitisation and emerging tech – like AI and machine learning – delivers on all fronts. Those who proactively adapt and modernise are best positioned to lead today and in the future.
If your department is not equipped with the right technology, take a stand and champion the digitisation effort. Executives will take notice. Our research shows that 93% of organisations are investing to enable procurement’s success. There are three primary areas that companies are focusing on to propel procurement forward:
Data and analytics
Development of existing talent
Two of the three are directly tied to digital transformation. For many companies, September marks the start of the 2021 budgeting season. If you see an opportunity, the time to make a move is now. Make the business case abundantly clear by connecting your requests to what matters most for the organisation right now: cash, resiliency, and business continuity.
4. Learn, develop and then learn some more
Fifty-seven percent of organisations are investing in talent development to propel procurement forward, according to our survey research. That number needs to be higher… and you need to make sure you get your fair share of the investment.
Your job: Put forward your personal business case for investment. Identify the skills that you and your team need to survive and thrive tomorrow. And take ownership of your own development.
There are ample opportunities to improve and develop. Our recent survey uncovered five primary talent gaps facing the function today.
Mastering these five areas will push you forward in a big way. Breaking them down, there are three key themes. The first is analytics – leaders that can analyze data, uncover trends and use insights to make fast and informed decisions will remain in high-demand. This should be area number one for professional development and training. The second centers around tech digitisation and modernisation, which we touched on earlier. The last bucket represents the soft skills necessary to be a great leader – emotional intelligence, relationships, and human connection.
Be the leader you want to follow
As you grow, get promoted and gain more influence, prioritize being a great leader. Make it one of the most important things you do every day.
Your leadership approach can either crack the foundation of your team or launch everyone forward. In fact, Gallup says managers account for at least 70% of the variance in team engagement.
But remember, future success requires practice today. According to research from HBR, there are six key areas every aspiring leader should practice right now:
Creating an exciting and challenging vision
Translating the vision into a clear strategy and roadmap
Team management: recruiting, developing and rewarding great people to execute on your strategy
Focusing on measurable results
Fostering an environment of team innovation and learning
Leading yourself — “know yourself, improve yourself, and manage the appropriate balance in your own life.”
If you wait to start practicing these skills until after you get the promotion, it may be too late. As HBR’s Ron Ashkenas and Brook Manville write: “No matter where you are in your career, you can find opportunities to practice these six skills. You’ll have varying degrees of success, which is normal. But by reflecting on your successes and failures at every step, and getting feedback from colleagues and mentors, you’ll keep making positive adjustments and find more opportunities to learn.”
The Clock is Ticking: It’s your time to lead.
For current and aspiring procurement leaders, there’s never been a better opportunity. More than 60% of procurement professionals have seen executive trust increase in the past three months. Similarly, more procurement leaders report having a seat at the executive table today than they did in May.
You have everything we need to step up, lead and earn more recognition and trust. The doors are open: are you going to walk or run through?Interested in learning more about procurement leadership? Get more insights, advice and best practices from our latest report: Procurement’s Time to Lead.
“The international trips that we’ve all been on where we’ve flown over to Europe for a two-hour meeting and flown back…does nothing but beat you up, and you’d certainly be much better accommodated over a video call,” Bastian said.
“But it’s going to be trips that are focused on relationship building or interacting – whether it’s with your customers, conventions, new contacts, reviewing performance on a global scale – those are going to stay.”
There are many ways hackers steal data, but two of the most common are exploiting IT system weakness and employee error.
Why do hackers launch cyber-attacks?
By far the biggest motivation is money. Criminals steal your information and use it to:
· sell on to other criminals
· steal your identity (credit card info, etc)
· blackmail you by controlling your computer, demanding a ransom
These criminals are looking for the quickest and easiest ways to make money. Much like a thief that checks all the doors in a neighbourhood trying to find one that’s unlocked, says security expert Lillian Ablon.
“These [cybercrime] markets are dispersed, diverse, and segmented—rapidly growing, constantly changing, and innovating to keep pace with consumer trends and prevent law enforcement and security vendors from understanding them,” Ablon explained.
“They come in many forms.”
Who are these hackers?
Forget the stereotype of a lone hacker in their mother’s basement; these criminals operate a highly-sophisticated business structure.
They often work in a coordinated pyramid, from the top-dog administrators through to brokers and mules.
There are even vendors so you can buy criminal applications as-a-service. That means the end-buyer doesn’t have to be a tech genius to exploit companies and individuals.
“Cybercriminals are always looking for exotic ways to use or monetise stolen data in ways that law enforcement and security vendors are not looking for or have not yet figured out,” Ablon said.
And they’re only getting sneakier, which is why you need to make sure your drawbridge isn’t lowered.
What happens when your company is cyber-attacked?
Cyber security attacks in procurement generally result in one of two outcomes, says Nigel Morris, Director of Technology Advisory Services at accountancy firm BDO.
“A full or partial shutdown of systems resulting in an organisation being unable to operate as normal, or a hacker gaining access to corporate or personal data,” Morris says.
“Examples of the former are customers and suppliers being unable to process orders, shipping lines being unable to move containers and logistics service providers being unable to manage warehouses and distribution,” Morris says.
He explains the most frequent cause of the system shutdowns is data being encrypted or erased. Then the systems have to be rebuilt by reinstalling applications and restoring data from backups.
And stealing data can include the “loss of customer or supplier bank or credit card details, leading to fraudulent financial activity,” Morris says.
That’s why he encourages organisations to use cybersecurity best practice, ensuring software is kept up to date, anti-virus/malware tools are deployed, data is encrypted, and staff are consistently trained to recognise and avoid cybersecurity threats.
How do you know if you’ve had a cyber-attack?
It’s really hard to tell if you’ve had an attack. In fact, it’s not uncommon for attacks to go unnoticed for months, says Robert Schifreen, an IT security consultant.
As an ‘ethical’ hacker, Schifreen kindly told the email provider about their security blunder – only to be arrested and sent to court.
His trial led to the first ever UK law against hacking. Now Schifreen helps companies prevent and detect attacks.
“If you’re lucky, there will be tell-tale signs,” Schifreen says.
“I always tell my clients that the ideal sort of hack is when someone defaces the front of your web site and fills it with something offensive. Because you’re going to find out about it within seconds of it happening. You then simply wipe the server, restore from backup, change all your passwords, and job’s done.”
But often, it’s a lot more subtle. “It might be months before you notice it as part of a routine audit,” Schifreen says. “There probably won’t be any signs on the server that this has happened, unless you look carefully.”
He says your IT team should be monitoring key files on your servers, looking for unsuccessful attempts to log in. They should also revoke user passwords when a staff member leaves the company.
What to do if you discover a security breach
If you realise your company has experienced a security breach, there are a few actions to take immediately.
NadiaKadhim, a legal advisor and co-founder of cybersecurity company Naq Cyber recommends these steps:
– Contact relevant law enforcement
– Tell senior leadership and staff what happened, the suspected cause, and any other relevant information
– Let customers and other external people like suppliers know if they could be affected
– Analyse what happened
– Contain the spread
Kadhim also says when a potential data breach occurs, you should immediately start collecting data. Not only is this important for your own records, but you might need it if you’re legally required to tell authorities about the breach.
“You have to create a report that analyses the situation and really sets out in detail what has happened, what the possible cause is, what you’ve done to contain it, solve it, and prevent it for future reference,” Kadhim explains.
“On the basis of this you have to decide whether you will have to report externally. After that, you will do an in-depth (technical) analysis and put that into the final report, but for the external reporting, you have to act quick, so you can’t wait for this.”
How to avoid future attacks
It’s impossible to fully protect against an invasion, even with all the best technology defences in place.
As legal advisor Nadia Kadhim says, companies often focus too much on the tech and not enough on the people.
“Most cyber-attacks happen because of human behaviour; whether it is reusing passwords, leaving laptops unlocked, sending and storing personal data through and in email, clicking on dangerous links, or visiting “those” websites,” Kadhim says.
“Only when awareness is created throughout the entire company, and is combined with the necessary technical measures and legal safeguards and documentation, [companies] can really protect themselves and [minimise] legal repercussions following cyber-attacks,” Kadhim says.
Part of staff awareness is knowing the sudden jump in remote working makes companies more vulnerable.
Nigel Morris, from accountancy firm BDO, says: “There is no doubt that remote working increases the cyber-attack surface area; put simply, there is more technology for a hacker to attack.”
If employees are often the weak link, what do your teams need to know?
– Do not open attachments from unknown sources or follow links to unknown websites. Doing so will frequently activate malware (software designed to damage your computer).
– Be aware of the various forms of phishing (when you’re sent an email or text that looks like it’s from a legitimate, well-known company, but it’s actually from a criminal trying to persuade you to hand over personal info like log-in details). More on how to spot phishing.
– If in ANY doubt, don’t click the link or open the attachment. Contact your IT team who can check the validity of the email content.
The crimes don’t always happen on your own soil.
Employee accounts can be compromised by huge data breaches at other global companies. Like the infamous 2017 Equifax hack where criminals stole personal details from 147 million Americans and 15 million British citizens.
That’s why your employees should change passwords often.
Put simply, your company is a target because it stores valuable information that criminals want. They don’t care if you’re a big company or small.
One cyber-attack could be enough to shut down your operations until you get to the bottom of it.
That’s why it’s so important to guard your information, says Michael Rösch, Senior Vice President of Customer Engagement Europe at procurement software provider JAGGAER.
“In procurement, price information could be very valuable if you as a supplier participate in an online auction for a multi-million euro deal in the automotive sector,” says Rösch.
On the other hand, commodity products like pencils, notebooks and other office supplies aren’t of interest so the information isn’t as sensitive, Rösch adds. He recommends classifying data carefully and protecting accordingly.
Procurement teams are responsible to defend against attacks by understanding weaknesses across the supply chain, says Jon Hansen of the Procurement Insights Blog.
These criminals are relying on the same old methods of stealing information (like phishing and malware). The only real difference is criminals swapping disguises – shifting to imitate a World Health Organisation official instead of a Nigerian prince for example.
Stay vigilant, educate staff on these common tactics, and you’ll have the best possible defences for your procurement kingdom.
Gone phishing – how to spot a fake email
Phishing is a common tactic used by cyber criminals to steal your personal information.
They send you a fake email or text that appears to be from a legitimate company. Then ask you to ‘confirm’ details like account numbers, passwords, etc
Even though these scams are becoming more sophisticated, it’s usually easily to spot a fake if you know what you’re looking for.
Kate Bevan, from UK consumer advocate site Which?, says there are common red flags in these phishing messages.
1)Urgency: A phishing email will usually have an urgent tone. It says things like “you must fill in your details/confirm your account/whatever immediately to avoid losing access to your account/to pay an outstanding bill/complete a failed payment.”
They are absolutely designed to get the pulse racing, so don’t fall for that. Check your account with the provider the email claims to be from by going to the website and signing in by typing the address into the browser: do not click a link in the email.
2)Not personalised: It almost certainly won’t address you by name. Instead, it’ll say “Dear Customer,” or something generic. A genuine email from a service provider will address you by name.
3)Bad grammar: Watch out for the language and how it’s written: a lot of these are written by people who don’t have English as their first language. Watch out for odd phrasing, poor spelling, and poor punctuation.
4)Weird links: Look at the link they want you to click. Ignore the text in the hyperlink; hover your mouse over it and see where it’s really taking you.
5)Leave it: If in doubt, don’t take any action. If it’s genuine the organisation will follow up.
What to do if you fall victim to a phishing scam
If you think you’ve given away your details to a phisher, change your password immediately and if you use that password on any other website, change it on those, too, Bevan suggests.
Based on our research, here are five ways that procurement professionals can generate more social value from their next construction project
Many governments around the world, including the UK, are focussing on construction-led recovery post-COVID.
Here are 5 ways Procurement can play a key role in re-shaping not only our buildings and the way we live, but also our communities through the way we buy during the construction process.
1.Have a clear social value strategy and framework
There needs to be a clear, transparent and needs-based social value strategy and framework for both procurers and bidders which is embedded at all stages. Procurement frameworks, with required levels of social value commitments, can bring efficiency and good practice application across public sector contracts. They can provide suppliers with more clarity on what is required for social value and how this will be recorded. Procurement services that guarantee work once suppliers are on the framework can incentivise well-considered social value commitments for both SMEs and larger organisations.
2.Prioritise outcomes in monitoring and evaluation
There is fragmented market of tools and metrics used in both procurement and evaluation. Most do not take into account geographic disparities in their monetisation, nor include negative effects of development to arrive at the final value. A focus on ‘tick box’ outputs like number of people trained, or number of apprenticeships started, can lead to more aware suppliers knowing how to score well on social value weightings in the tender process, as discussed previously. By procuring outcomes instead of outputs, the procurement profession can open up the doors for innovation and creativity in bid responses, and evaluate bidders on the impact they will achieve, rather than bums on seats.
3.Consistency and holding to account
There are different procurement frameworks, regional models, and different sector frameworks, adding to the confusion in this area, and sometimes a ‘buy local’ requirement as well – there is no homogeneity in the procurement landscape. Given that Social Value typically accounts for anywhere between 2%-25% on tender scores, it is a key part of the procurement process. Having consistent, appropriate, clear goals at all stages, engaging in more pre-tender dialogue with bidders, and stating the evaluation methodology or tool to be used, will help achieve greater outcomes. Most importantly, hold suppliers to account for their contractual outcomes. Our research showed that rigorous monitoring and enforcement of contracted social value activities was very variable and inconsistent. With the high value of contracts in construction, ensuring that what may have secured a major win is actually delivered on the ground is imperative.
4.Enable straightforward comparisons of value
We recommend that environmental components are separately weighted in procurement, and that ‘normal or good business practices’ e.g. internal diversity/inclusion initiatives, prompt payment codes, training of existing supply chains, modern slavery, managing noise or disruption, should be considered as a given. Social value has to go beyond ‘business as usual’. Activities which may be commercially beneficial to the supplier, such as apprenticeships and educational visits, could be considered as social value if they were supported by a robust needs analysis in the area that this is going to make a difference. Even so, focusing on apprenticeship completions rather than starts would be a step in the right direction.
5.Guard against potential for disconnect
Our research suggests that a procurement framework approach may provide a further layer of disconnect between local beneficiaries and the provision of social value. The delivery of a locally responsive approach, which links to and utilises community groups and organisations, requires greater clarity. There could be an opportunity for procuring organisations to identify initiatives and local organisations in the tender documentation, embedding local knowledge and understanding of need into the brief, rather than leaving suppliers to try to work this out or to ‘reinvent the wheel’ during the process. Procurers could also consider requiring the upskilling of the voluntary and community sector, as well as the enabling of local businesses not in their supply chains to become fit to supply, which would leave a more enduring legacy.
The construction sector is the sixth largest source of employment in the UK, contributes nearly 7% of the UK’s GDP and is a major recipient of public spending – it is critical for placemaking, economic development and job creation, all of which highlight its importance to Boris Johnson’s ‘New Deal’ and post Covid-19 recovery.
With construction spend estimated to be £500 billion by the end of this decade there is also a need to make sure that every one of those pounds delivers additional tangible social impact, and makes a major contribution to addressing the significant inequalities faced by our most disadvantaged citizens and left-behind communities.
The Social Value Act, published in 2013, requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits. Before they start the procurement process, commissioners must therefore determine how they can secure maximum benefits at all stages of the project for their local communities.
“No common definition of social value”
Given the significance of construction to our economy, we undertook research to support greater understanding of what ‘good practice’ social value looks like, and to find and share examples where innovative, replicable and impactful social value has been delivered at all levels of place-based interventions as a result.
Our final report,From the Ground Up – Improving the Delivery of Social Value in Construction, finds that we are a very long way from the social value nirvana we desire. The barriers are significant, and whilst social value plays an increasing part in the procurement process, there are some pretty hefty challenges running across procurement, definitions, activities, partnerships, monitoring and evaluation.
There is no common, comprehensive definition of what counts as social value, to frame understanding, benchmarking or reporting, and aid comparison of tenders and to determine best practice. This has given rise to significant disparities in what counts as social value activities, and no requirement to focus on improving the wellbeing of the most disadvantaged.
Current examples include attracting/retaining staff, prompt payment codes, internal equality and diversity programmes, fair pay, training of the supply chain, ethical/low carbon sourcing, managing risk/noise, and increasing awareness of the construction sector as a career for young people. So there is a high risk of social value lacking focus and becoming too diffuse.
We also found that projects spanning geographies have multiple project stakeholders often competing for social value outputs, different frameworks with differing social value requirements, and a real lack of alignment around desired benefits and outcomes. There was clear consensus on one of the biggest barriers – the lack of understanding of what social value is – and that substantial improvements need to be made in its monitoring and evaluation.
“Procurement must be a much more effective tool for change”
As covered previously, social value procurement must be a much more effective tool for change. This means putting people at the centre of place-based development, engaging and working with them to understand their needs and wants, so that the development happens with them, not to them. We need to change how we measure the value of our place interventions to take into account what matters to the stakeholders in them, and move from outputs to considering how we can achieve an improvement in wellbeing outcomes as an important deliverable.
In our report, you will see we have made five recommendations in response to our key findings. You can also view our report launch. To join us in the next phase of our discussions for driving change, please email me at [email protected].
Bev Hurley CBE is Chair of the Institute of Economic Development, the UK’s leading independent professional body representing economic development and regeneration practitioners working for local and regional communities.
Should you ask for a raise during a pandemic? It depends on how well you perform, and how your company is doing.
You consistently deliver, you always exceed your targets, and your boss is thrilled.
Does that mean now the right time to ask for a raise – despite everything going on in the world?
Actually, now could be the perfect time.
It might seem counterintuitive, but economic downturns often mean steady wages, says Dr Michael Gravier, Professor of Marketing and Global Supply Chain Management at Bryant University.
“Layoffs and workforce reductions are done partly to preserve the salaries of remaining workers, and companies know that they must keep up the morale of remaining workers,” Professor Gravier says.
Since recessions don’t last forever, businesses have an incentive to make sure their best employees stick around to ride out the economic storm.
“Companies that are most well prepared tend to come out of economic downturns stronger than competitors,” adds Gravier.
“This means that workers who haven’t been furloughed are, on average, well-positioned to request reasonable pay raises, especially if they’ve shown a talent for doing more with less or improving operations or succeeding despite the odds during these difficult times.”
Where to start
Are you a high performer? Then it sounds like you’re ideally placed to ask for a raise.
Start by understanding how well your company is doing, and its priorities for the next several months.
And don’t be put off by reports that overall wage growth is weaker now. Professor Gravier points out that supply chain industry wages have remained fairly robust.
Bottom line: go get that raise.
Build your case
Start by assembling proof that you deserve a raise. Remember, the topic of your paycheck might be deeply personal and sensitive to you, but it isn’t to your boss. All they want are hard facts that prove you meet and exceed expectations.
For that reason, it’s smart to get in the habit of jotting down this evidence regularly. For example, Professor Gravier set aside time every Friday to write about what had happened during the week, and how key performance metrics were going.
‘“You must first know thyself,” as the old saying goes,” Gravier says. “If workers cannot justify their performance, clearly there is not much need to entertain their request [for a raise].”
So what sort of accomplishments should you record? Anything that proves how valuable you are, says Scott Dance, Director of Hays Procurement & Supply Chain.
“[W]rite down all the things that you’ve achieved individually or contributed to significantly as part of a team, [and] back up these achievements with real, measurable evidence,” Dance says.
“Your fundamental objective is to prove that you’re an asset to the business and that you have made a significant contribution during what has been a particularly challenging time for many organisations.”
Know your market value
The next piece of evidence you need is your market value, says Jacqui Paterson, Director of Supply Chain and Procurement at UK recruitment agency Drummond Bridge.
“I would advise [employees] to look at all of the factors associated with their current role, [like] ease of location, job satisfaction, working conditions and then research what the current market rate would equate to for the role they deliver,” Paterson says.
Paterson also recommends asking yourself questions like:
How long ago was my last pay rise given?
Can my company accommodate a rise right now?
Are my skills in high demand?
It’s all about doing your homework first so you’re prepared, professional, and ready to make a strong case.
Choose your timing
People often ask for a raise during a performance review. But that’s a mistake because many other employees are asking for a raise then too, Paterson says.
When is a better time, then? Paterson advises to “time the conversation strategically – perhaps after a series of successful, valuable contributions have been delivered.”
And don’t forget to approach your discussion diplomatically. “A confrontational or “expectant” pay rise conversation doesn’t usually end positively,” Paterson warns.
What if they say no?
Even if you make a convincing case, you might still get rejected.
What should you do next? Find out why you were turned down, says Paterson. “No to a pay rise just now does not mean never.”
“If the [employee] is generally happy where they are, this can be the trigger to initiate conversations in writing that if certain savings, KPIs etc are met that the raise will be reviewed after a three-month period.”
After all, “[n]ot all businesses can afford to consider a salary rise in the current market conditions, or they may want to review how business is moving when the economy shows signs of improving before committing to any salary rises,” Paterson adds.
Another possibility is your boss can’t give you a raise, but they can sweeten the deal by giving you other benefits.
These could include a job title change, extra time off, or the ability to work from home permanently.
So before your conversation, you should consider if you’ll only accept more money, or if you could be satisfied with recognition in other ways.
Is it time to leave?
Only you can decide if you’re happy sticking around without a pay raise. If your top priority is a bigger salary, leaving may be your only route.
“If your current employer can’t meet your requirements in terms of salary or otherwise, it’s certainly worth testing the waters and seeing what you could be getting elsewhere,” says Scott Dance from Hays.
“Despite ongoing uncertainty, there’s no reason why you should hold off looking to the future and considering how you can make your professional ambitions a reality.”
Dance advises updating your CV/ resume with any new skills or expertise you might have learned over the last few months of lockdown.
“Refreshing your CV might open up new avenues which you thought weren’t possible before,” Dance says. That’s why you should be open to trying something new.
“The long-term reality of the Covid-19 crisis may mean that we see surges in demand, industry shifts and emerging trends that impact the jobs market,” Dance adds.
“Being flexible and open-minded about your career may help you secure that pay rise you’re after and take your career in an exciting new direction.”
Do you have any tried-and-true advice? Share your thoughts in the comments below.
A new survey of 500+ professionals reveals where procurement must focus to establish leadership and earn executive trust.
Procurement: it’s your time to lead. New research from Procurious and Coupa, released today, reveals that nearly two thirds of professionals have seen trust increase with the c-suite over the past three months. Similarly, more procurement leaders report having a seat at the executive table today compared to May, when we asked the same question as part of our Supply Chain Confidence Index.
“Procurement leaders continue to step up and executives are taking notice,” said Tania Seary, Founding Chairman of Procurious. “Procurement plays a critical role in navigating the uncertainty we face today. The function’s stellar performance opens the door for more – more recognition, trust, and opportunities to lead. It’s time to take advantage.”
Procurious and Coupa surveyed over 500 procurement and supply chain professionals in July to assess the state of the function and what’s on tap for the second half of 2020. Reflecting on procurement’s strategic position within the organisation, just one-fifth (21%) report that they are still being viewed tactically internally. While that number is still higher than we’d like, most would agree that for a function that’s historically struggled to stand out and get the recognition it deserves, we’re moving in the right direction – in a big way. Consider that over the past three months, only 7% said they did not see trust increase between procurement and the c-suite.
“Procurement today has a clear opportunity to capture our seat at the table. The findings of this survey highlight how important it is for us to think strategically and ensure our objectives are aligned to the board and our peers in the c-suite,” said Michael Van-Keulen, CPO, Coupa. “We must step up to help our organizations not only control costs, but also mitigate risk, maximize value, and increase the agility needed in today’s business environment.”
These results build off Procurious’ research findings from earlier this year. “In June, we uncovered clear indicators that the c-suite was paying more attention to procurement and supply chain. This trend is accelerating as executives recognise procurement’s unique and essential position in the ongoing recovery,” said Seary.
Procurement leaders looking to capitalise on this newfound opportunity should focus on delivering results that increase resiliency and continuity, and improve the bottom line. According to our research, the top three areas the c-suite wants procurement to contribute to are mitigating supply risk (70%), containing costs (69%) and driving business continuity (64%).
“At first glance, we’re seeing a back-to-the-basics approach for procurement teams, with a laser focus on savings, spend visibility, resilience and risk mitigation. However, when you step back you quickly realise this approach is anything but traditional. The desired outcomes may be similar, but companies are investing more strategically, aggressively and intentionally,” commented Seary.
Second Half Procurement Priorities: Controlling Costs and Risk
Procurement’s top three priorities for the second half of 2020 are similar to what we referenced above: containing costs, mitigating supply chain risk, and supplying the products and services needed to maintain operations.
Naturally, managing supply chain risk remains front and center for organisations across the world. But risk takes on many different forms. What are executive teams most concerned about right now? The top five areas, in order of concern, are:
· Operational risk
· Supplier Risk
· Business environment risk
· Reputational risk
· Cyber risk
Interestingly, the most prominent risk differs geographically. In North America and Asia Pacific, executives are most concerned about cyber. In Europe, the primary concern is operational risk. Either way, stronger investments in supply chain risk management will undoubtedly become one of the lasting marks of COVID-19. Mature procurement teams will never take supplier health, collaboration and risk lightly again.
When it comes to business risk, there’s often more than meets the eye. The survey also found that more than 80% of organisations have significant gaps in spend visibility, which is its own risk. This finding poses an important question: How can procurement teams lead and control supplier risk if they lack full visibility into where money is being spent?
Equipping Procurement to Lead and Thrive
Looking at the next 6 – 12 months, economic uncertainty was the number one concern for survey respondents, followed by cash and risk. Given the stakes – and procurement’s proven ability to add value in business-critical areas, including risk, resiliency, and cost containment – the majority of organisations (93%) are investing big to propel procurement forward. The top three investments organisations are making in procurement leadership are:
· Data and analytics
· Talent development
“COVID-19 continues to act as an accelerant for procurement transformation. The business case is right in front of us, and organisations are investing accordingly.” said Seary.
While organisations are finally stepping up to fund procurement initiatives, the function still has an important role to play to shape the future.
“We need to ensure the investments are strategic, and not tactical. We need to set the agenda, and ensure the c-suite’s vision for procurement is aligned with what we know is possible. It’s our time to lead, and we need to do it right,” said Seary.For more insights – including details on procurement priorities, operational gaps, investment strategy, supply chain risk and more, join Procurious and get the full report:Procurement’s Time to Lead.
The best way to build a strong network is being helpful.
If you post useful, interesting information, you can positively influence the way you’re perceived.
To put it another way, it allows you to build your personal brand.
But what does that actually mean? Jeff Bezos, CEO of Amazon, is credited with saying: “Personal branding is the story people tell about you when you’re not in the room.”
Why is it important to build your personal brand? In short, future opportunities, says Andy Moore, Digital Marketing Manager atProcurious.
“Social media has become a staple in society,” Moore says. “And in the world of getting hired, having an online profile has become essential in the last few years.
“So it’s important for professionals to first understand the ‘why’ of building their personal brand – it can help with future connections and can generate better leads.”
But where do you start, especially if you haven’t done much networking online?
It’s as easy as posting an article you find interesting. Or sharing your opinion on an industry hot topic. Or asking your network’s opinions.
The important thing is to show up consistently and make a contribution, Moore adds.
“People want to hang out with the ‘life of the party,’” says Moore. “This is the same for social media. People want to be connected with those who have a voice and get involved.”
That includes liking, sharing, and commenting on other people’s posts. Everyone loves a bit of validation, and your network will appreciate your support.
Keep in mind that a strong digital network won’t happen overnight, especially if you don’t have much of an online presence right now.
Like any other relationship, networks require consistency over time.
But it’s worth the effort, says Mark Holyoake, Managing Director of supply chain recruitment firm Holyoake Search.
“I’ve long been a proponent of personal branding,” Holyoake says. “Technology has made this easier than ever, and with conferences and networking opportunities still all virtual for the time being, it has never been more important.”
You get what you put in
Your success at building your online network will largely depend on your attitude.
After all, few things kill a relationship quicker than self-centredness. So don’t view your network as a group of people who only exist to get you a job.
Instead, approach them as a worthwhile group of your colleagues and peers. What would they like to know from you? What is interesting to them? What can you share that will make their lives better or easier?
Likewise, think of people in your network that you could introduce to each other, knowing that both will benefit from the connection.
There are lots of ways to add value to your network.
Where to network
There are plenty of social platforms to choose from. Where should you invest your time? The simple answer is where your professional associations hang out.
And you don’t need to be on every platform. Why put time into building an Instagram profile when your network spends all their time on LinkedIn?
You should also join and contribute to online groups that are specific to your professional interests.
Procurious is a great example of this, where you can find groups dedicated to any aspect of procurement.
CPOs in Scotland, supply chain sustainability, and Indian procurement professionals – you name it. And don’t worry if you can’t find your tribe. Just start your own group!
There are 40,000 procurement professionals from all over the world on Procurious, and they want to build their networks too.
So get involved in the groups and the discussion boards. You’ve got answers and experience that people are looking for right now.
“Procurement professionals are united by the need to be agile, to be savvy, to be bold,” Seary says. “We can do that alone, but we can do it even better by reaching out to colleagues and contacts to fill the gaps.”
Networking is about watering the seeds of possibility, nurturing existing relationships, and growing the best you can from each encounter, Seary adds.