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Revealed: 4 Things CFOs Really Want From Procurement

Ever get the feeling you’ve been barking up the wrong tree? Let’s cut out the second-guessing and focus on the four essentials that Chief Financial Officers want from procurement.

Andrew Porter values having a good night’s sleep. As CFO of the Australian Foundation Investment Company (AFIC) and President of the G100, the peak body for Australian CFOs, Porter knows that the presence of dark circles under the eyes of C-level executives are linked directly to how the business is tracking.

“The CFO’s job is to help the CEO – and the Board – to sleep well at night”, he says. This concept also applies to the relationship between CPO and CFO, and the people reporting to the CPO, and so on all the way down the organisation.

“I’ll pay a little bit more for security of supply knowing that our strategic suppliers are happy, reliable, and we’re not going to be exposed as a business with a supplier that feels cheated”, Porter says.  “I want to know where the supplies are coming from, and know that they’re quality, and know that it’s not going to come back and bite the business later on.”

So – what exactly do CFOs want from their CPOs in order to help the business grow?

  1. They want to trust that everything is under control

CFOs, says Porter, worry about keeping three succinct groups happy: investors or shareholders, customers, and employees. It’s a delicate balance, because an initiative that benefits one group can have a detrimental effect on the others unless it’s been carefully thought through. Procurement practitioners have the ability to help maintain this balance, not in the least by keeping customers happy through the timely sourcing of goods and services. “If the job is being done well, it’s one less thing for the CFO to worry about”, says Porter. “But if procurement tries too hard and is seen to be screwing down the supplier, then you’ve undone all that hard work, shifted the balance, and suddenly the investors are unhappy.”

As all CFOs know, you can’t improve margins and grow your business without first being sure that you can rely on your bottom line. “In order to grow, you’ve got to have trust in your subordinates – and that cascades all the way down.”

  1. They want to be kept informed

“What CFOs really want is a crystal ball that works 100% accurately all the time”, says Porter. CFOs need to understand all sectors of the business – what’s firing, what isn’t firing, and (importantly), they need to know about roadblocks and other issues in advance. If procurement becomes aware of an upcoming issue, the CFO, CEO and the Board need to be informed of it before it happens, and be presented with a list of solutions.

“The board doesn’t want to see problems – they want to see solutions”, says Porter. “A good CPO should be putting themselves in the place of the person they’re reporting to. What does he or she need to know? What are the questions they’re going to ask, and how am I going to get those answers to them before they have to ask?”

  1. They want their CPOs to think outside the box

What does disruption actually mean in terms of supply for your organisation? Where will this disruption be coming from? Are there different, innovative ways of sourcing goods and services? Porter comments that although innovation isn’t always an immediate priority, the C-suite will inevitably ask what procurement is doing to drive innovation.

Part of thinking outside the box means broadening your field of vision. “Look globally as well as domestically for best-practice, and ensure you’re part of a good forum where you can share information with your peers.”

  1. They want to see purpose-led strategy

Are the procurement team’s KPIs in accordance with your organisation’s purpose-led strategy?

“A nightmare scenario involves the CPO chasing the wrong KPIs”, says Porter. “Ill-chosen KPIs can sometimes be at odds with the purpose and strategy of the business, and fail to align with the KPIs of the wider organisation. They need to be parallel all the way down. Everyone needs to absolutely understand what their role is in the company.”

But, Porter warns, you need to have sensible targets. “If CFOs start forcing CPOs and their teams into impossible targets, that’s when people get disenfranchised – and suppliers get hurt.”


Andrew Porter is the CFO of Australia’s largest Listed Investment Company, Australian Foundation Investment Company, known as AFIC. He is also CFO for Djerriwarrh Investments Ltd, Mirrabooka Investments Ltd and AMCIL Ltd, all other Listed Investment Companies. He is the current President of the G100, the peak body for CFOs, and the current Chair of ASIC’s Standing Committee on Accounting and Auditing.  He was formerly a non-executive Director of the Royal Victorian Eye & Ear Hospital.

Porter will deliver a keynote presentation at The Asia-Pacific CPO Forum, the region’s premier procurement event dedicated to accelerating commercial leadership at the highest level. Held at Melbourne’s Crown Conference Centre over two days, it is a once-a-year opportunity for leading Chief Procurement Officers to engage with peers and like-minded business leaders in an intimate and interactive setting. Click here to learn more.

4 Ways Diversity Makes A Rock-Solid IMPACT

Cultural diversity – whether it’s racial, ethnic, gender, or sexual – is an increasingly hot topic that shows no signs of slowing down. Let’s examine why diversity in the workplace has gone from a “nice-to-have” to a critical business imperative.

Diversity fail: US Congressman Paul Ryan’s now famous “White Selfie” with Capitol Hill interns.
  1. Diversity leads to a higher market share

While communities are becoming increasingly culturally diverse, businesses need to mimic the communities they serve by bringing together individuals from different backgrounds and experiences. Put simply, people want to engage with companies that employ people similar to them. This enables companies to capture a greater share of the market by marketing more genuinely to diverse communities, communicating effectively with their diverse customers, and understanding their needs.

Looking for proof of the above? Research from McKinsey revealed that companies in the top quartile for racial and ethnic diversity are 35% more likely to have above-average financial returns, while companies in the bottom quartile were less likely to achieve above-average results.

  1. Diversity supercharges problem-solving

Institute for Supply Management CEO Tom Derry told Procurious that cultural inclusiveness is no longer an idea, but an expectation. “Your team needs to be diverse – in fact, you’ll look impoverished if you don’t have that. The benefits include being able to tap into a diversity of experience and opinion to solve challenges. This creates a truly attractive environment for top talent.”

If you lived in a dystopic Brave New World scenario where every member of your workforce had identical cultural backgrounds, education and work experience, it’s highly likely that each individual would come up with an identical set of solutions when presented with a problem. That’s why it’s imperative that any group includes people with culturally diverse backgrounds and highly varied work experience who can bring entirely different schools of thought to the table, and hence a wide variety of innovative solutions.

  1. Diversity in the workplace helps you become a more effective global professional

Supply management professionals are increasingly working within the global supply chain, which is why being about to communicate effectively in different parts of the world is a must-have skillset. Having high cultural intelligence (CQ) means knowing how to create relationships, understand cultural nuances and adapt your approach to suit cultural differences in foreign countries.

Shelley Stewart, CPO and VP, DuPont, told Procurious that “A diverse workplace provides a wealth of varied experiences that are crucial for supply management organisations to operate even more effectively in the global economy.”

How? Because an inclusive and diverse business will increase the empathy (and CQ) of all employees as cultural tunnel-vision is reduced. In short, everyone benefits from a higher appreciation of different outlooks and an increased understanding of others. Armed with these skills, a supply management professional is much less likely to suffer culture shock or put a foot wrong when interacting internationally.

  1. Diversity will help you attract and retain the best talent

If your company has built a solid reputation as an organisation with a truly diverse and vibrant workforce, it will attract the very best and brightest in the market. Companies that fail to recognise this are missing out on top talent, as potential candidates may have the perception that your company simply doesn’t tend to hire people from their cultural background. To state the obvious, companies should be making every effort to widen, rather than shrink, the talent pool.

There’s evidence that businesses which fail to foster inclusive, diverse workforces suffer from higher turnover rates, as a hostile work environment forces employees to leave. High turnover leads to avoidable costs, which is another reason why cultural diversity positively impacts your organisation’s bottom line.

More resources on Diversity from ISM:

Love learning about Diversity? ISM IMPACT2018, The ISM Diversity Conference, will take place on February 21-23, 2018 in Washington, D.C. and will feature industry leaders including Craig Reed (CPO, DowDuPont), Walter Charles (CPO, Biogen), Apollon Fanzeres (CPO, Laureate), and Sid Johnson (CPO, Aptiv). Click here to learn more.

How to Make Sure You’re Not Being Sold Smoke And Mirrors

Can you spot the difference between theoretical and real ROI? Basware’s Eric Wilson gives the run-down on preventing value leakage in Purchase-to Pay. 

Register now free of charge as a digital delegate for Big Ideas Chicago!

Buying enterprise software is no easy undertaking – there’s a lot of factors to consider, multiple stakeholders to please and a lot of due diligence that must happen to ensure you can get the ROI that is being promised. Unfortunately, in the world of Purchase to Pay (P2P), most systems available today cannot truly deliver the ROI that is being touted across marketing channels and promised by sales reps because of inherent limitations in the solution.

So, how can you be sure that you are looking at real numbers when comparing P2P solutions and not some fabricated figure that is only attainable on paper?

Ask these two questions

There are two primary questions you should ask when reviewing solutions and providers:

  1. Is the ROI real, or is it fabricated?

Often what happens in the solution seeking process is that a business case is written, either by an internal person, or a consultant, or a solution provider.  The business case includes all kinds of detail about the cost savings and efficiencies the company will achieve by implementing the solution. In the case of P2P, these cost savings are in things like reducing off-contract spend, negotiating better pricing, taking advantage of terms discounts, eliminating paper from the process, reducing or redeploying accounts payable (AP) processing headcount, and similar cost efficiencies. But there are real obstacles to achieving the level of savings being promised, and organisations need to choose a provider that can meet those challenges with real answers (more on overcoming these obstacles later).

2. Will the solution continue providing value in the future, or will it be a short-term win that sends you searching for a replacement system in a few short years?

Too often we are only looking five inches in front of our face when making a technology investment decision. The organisation is only looking at the current problem, not the long-term value. Little functional enhancements in P2P may offer some incremental value, but are not what the future of P2P is about. The future of P2P is all about deriving more value from centrally capturing and leveraging all that transactional data, all those POs and invoices, across millions of organisations. The future of P2P (and even today to a large extent) is about using applications sitting on top of that transactional data to create a competitive advantage. Apps like these will empower you to answer questions like: How am I doing against industry benchmarks? Are there opportunities for better leveraging spend in buying groups to get better pricing? Can I fund company growth initiatives through working capital optimization solutions?

Find out if the solution can process 100% of your transactions

Back to the obstacles we mention above – where do those come from and how can you overcome these challenges? Obstacles arise because of one simple factor: all the cost efficiencies in the business plan are assuming you get 100% of your purchasing and accounts payable (AP) transactions running through the system, and most P2P systems cannot accomplish that level of automation.

You must choose a provider that can help you achieve:

  • 100% Supplier On-Boarding

First, you have to get all of your suppliers connected to your P2P system.  If you don’t, you can’t access all available terms discounts; you can’t truly eliminate paper; you can’t achieve all of the supply chain efficiencies from the business case. Most P2P systems are only designed to connect to the sophisticated suppliers, who can send XML or EDI transactions. What about that long tail of mid-size and small suppliers, who aren’t that technologically advanced? What about those suppliers that still send paper invoices? You must have a solution for connecting them to your P2P system, and it has to be easy for them to do so.

  • 100% User Adoption

Secondly, all your procurement must be processed through the P2P solution, which means the end users have to use it – not just some of the end users, or most of the end users, but truly all of your end users have to be putting 100% of their purchasing through the system. You can’t achieve that status by mandating it, and you can’t even achieve it by having a procurement system that is “user friendly.” The P2P system has to actually be designed to fit seamlessly into the way that end user is already doing their job. In other words, employees use the procurement system because it is truly the easiest way to get the stuff they need, not because it’s been mandated by the procurement department.

  • 100% Spend Visibility

Lastly, all your invoices – for both direct and indirect spend – must be running through the P2P system. This is very rare in the reality of most P2P systems. Most P2P systems are only good at automating the invoices that originated from the indirect procurement solution. What about all your direct invoices? What about all your non-PO invoices, facilities invoices, invoices generated from manufacturing? If the P2P system can’t effectively handle 100% of your invoicing transactions, your ROI just got reduced tremendously, or perhaps even eliminated. The AP side of the P2P system must be a true AP transaction hub for all your invoices, regardless of type of invoice.

So, what does all of this culminate to in the end? One word: data. If the system you choose can deliver real ROI, you begin building a critical asset – a data set of all your financial data in one single location. Then, you can begin using innovative add-ons, like predictive/prescriptive analytics, robotics, artificial intelligence, etc. and see that ROI multiply.

Interested in getting started with Basware? Register for our weekly demo to see how Basware can help you build the business case for real ROI.

Register now  as a digital delegate for The Big Ideas Summit Chicago!

Is the era of the fence-sitting corporation over?

Corporate CEOs have historically remained silent on politically divisive issues to avoid a potential backlash from consumers and their own employees. Last week, this rule was turned on its head.

Three high-profile advisory councils were disbanded by U.S. President Donald Trump last week after a cascade of CEO resignations over his response to the Charlottesville “Unite the Right” rally.

Mr Trump dissolved the American Manufacturing Council and the Strategic and Policy Forum after it was leaked that the remaining members of the two councils were planning a press announcement on Wednesday 16th August about disbanding the groups. High-profile resignations up to that point included Kenneth Frazier (Merck CEO), Under Armour CEO Kevin Plank, Intel Chief Executive Brian Krzanich, ADL-CIO’s Richard Trumka and Thea Lee, the Alliance for American Manufacturing president Scott Paul, Campbell Soup’s Denise Morrison and 3M’s Inge Thulin.

A similar revolt in the President’s Committee on the Arts and Humanities took place two days later, with 16 out of the 17 members quitting, leading to the White House stating that the committee’s executive order would not be renewed.

Is the line between politics and business dissolving?

Michael Maslansky, the head of a language strategy firm that advises major companies, told the BBC last week that “the era of the fence-sitting corporation is over”.

In an unprecedented situation, the moral compass has now been placed in the hands of business leaders, who are coming under increasing pressure to comment on political events. Donald Trump’s tweet about “pressure on the businesspeople of the [councils]” gets this absolutely correct.

Many of the CEOs who resigned from the advisory councils made statements along the lines of having “no choice” about the matter. In other words, Trump’s response to Charlottesville put them in a situation where their connection with the president contradicted their company’s corporate positions on race, diversity and equality.

Even CEOs without a formal position on an advisory board, including Apple’s Tim Cook, spoke out in condemnation last week. In the past, it was seen as safer to remain silent, or risk the wrath of customers (and employees) from the other side of the political spectrum.

Why is this happening? “If you’re silent about an issue, then each side will assume you’re on the wrong side. You end up really having to choose”, says Maslansky. Another sentiment that was frequently expressed after Charlottesville was the idea that silence in the face of injustice (including racism) is tantamount to complicity.

Ideally, every company would have a Values Statement which would dictate the CEO’s response to any relevant issue. This means the “choice” doesn’t come down to the personal whim or leaning of any individual business leader.

Where will this end? With political divisions only increasing, will we see consumers do business only with companies that reflect their political views? This is already happening on the fringes, with regular calls going out from both sides to boycott various companies (think #DeleteUber, or #AnywherebutTarget). Terms for this include “dollar voting”, “ethical consumerism” and “moral boycotting”.

For procurement and supply managers, daily buying decisions could become so fraught with larger implications that it will become hard to keep track. But if the end customer expects organisations to make purchasing decisions that are in line with their own values, this is certainly a space to watch.

As for CEOs, the era of carefully-worded, politically-neutral statements may be over. When a new CEO steps into a role, their customers, their employees and the Board will want to know where they stand politically and how this will influence the corporate culture.

To quote a meme that’s currently doing the rounds on social media: sitting on the fence only gets you one thing: splinters.

The vanishing line between business and politics will be one of the topics under discussion at the Chicago Big Ideas Summit on Thursday 28th September. If you’re a CPO and located in or near the Chicago area, there are still some seats available (limited to 50 attendees). If you’re not quite CPO-level (yet) or based on the other side of the globe, don’t worry – we’ve got you covered. Simply register for free as a digital delegate on Procurious, and we’ll bring all the Big Ideas from Chicago to you! Click here to find out more.


 In other news this week:

Australia to develop anti-slavery legislation

  • Australia’s Turnbull government will soon require companies with an annual turnover of at least $100 million to publish “Modern Slavery Statements” on a publicly accessible central repository.
  • The statements will include measures companies are taking in their supply chains to combat modern slavery, including human trafficking, debt bondage and forced labour.
  • The government is also considering drafting a Modern Slavery Act and an independent anti-slavery watchdog to investigate complaints and educate businesses.

Read more in The Age.

 The City of Los Angeles is looking for a CPO

  • The city of LA is seeking a CPO to fill a newly-created position created as part of a wider local government remodelling.
  • The new CPO “will be responsible for the development of a plan to strategically leverage the city’s spend, identify cost savings, employ long-range operational policies and procedures that align with industry best practices, increase transparency, and reduce time to contract with the city”.

Read more at Supply Chain Digital.

IBM Global Procurement’s Radical Transformation

Transformation has become the new norm as organisations respond to an onslaught of shocks. But is there a best-practice way to go about transforming a procurement function? We interviewed Procurious Partner, IBM Global Procurement, to discover why they’ve been recognised on the global stage for their approach to the challenge.

If you were to stop any procurement professional on the street and ask what their function is currently up to, you’re unlikely to hear the reply, “Oh, you know – business as usual”. Instead, you can expect to hear a description of some sort of transformation. Whether it’s enterprise-wide or procurement-led, everybody’s doing it. In fact, you could argue that the process of transformation itself has become business as usual, especially if you’ve ever worked in a company where one transformation follows another, ad nauseum.

Where once your organisation may have needed to reinvent itself every few decades, today, an onslaught of shocks – technological, cultural, economic, and regulatory – is forcing companies to transform every few years. Five to ten years ago, your CEO might have become a business icon through a single transformation. The minimum requirement now is being able to execute multiple transformations, while success today is measured in your ability to foster a culture of continuous reinvention.

Showing how it’s done

IBM Global Procurement recognised the need to transform as market dynamics put increased pressure on its customers, which consist of internal IBM business units and external clients. Graham Wright, Vice President, Global Procurement and IBM Procurement Services, described some of these pressures. “We realised that our internal and external clients needed less complexity, more transparency, consistent processes executed with speed, and new solutions. The challenge was to find new ways to stay relevant and be successful – that’s why we launched a radical transformation not only to address the needs of the business but to keep pace with smaller, more agile competition and remain an industry leader”.

The team went about this by ramping up activity across three key areas:

1.Innovation: Leveraging strategic partnerships and key relationships to drive innovation.

The team unlocked the value of supplier innovation by implementing a state-of-the-art Supplier Enabled Innovation (SEI) program and using new, engaging tools, including cognition. The SEI initiative included 3rd-party ‘Voice of the Supplier’ surveys, supplier incentives including annual awards, and clear performance metrics.

2. Engagement: Delivering simple, engaging user experiences.

After identifying key client pain points around complexity, slow execution and delayed problem resolution, IBM Global Procurement followed a mantra of speed and simplicity to improve visibility, enhance workflows and reduce cycle times. Innovative engagement solutions, such as an “Ask Procurement” chat function for clients, have contributed to an impressive improvement in client satisfaction. The chat application is highly intuitive – it suggests self-service solutions for users, and provides direct access to live agents who can answer questions simply and quickly.

3. Analytics & Cognitive: Capitalising on foundational analytics and cognitive solutions.

No mention of IBM Global Procurement would be complete without a reference to its not-so-secret weapon – the Watson Cognitive Platform. Through catalog data enrichment and cognitive procurement solutions which provide users with refined real-time data for risk mitigation, market and supplier insights, pricing information and recommendations, the team realised significant efficiencies including hand-free POs and greatly improved process compliance.

As an extremely positive side-effect of this transformational effort, Wright reports that the team’s efforts are being recognised within the wider organisation. “The transformation has helped change the perception of procurement evolving from a cost centre to a value centre.”

While internal recognition of the procurement team’s value is gratifying, the Global Procurement Team was even more delighted to see their efforts celebrated at Procurement Leader’s World Procurement Awards, where the team won the award for “Transforming External Partnerships (Pioneering Business Impact)”. The team’s submission went through a rigorous 3-stage judging process including online judging, peer review and a face-to-face regional debate.

And that’s not all – amongst 350 submissions across 15 categories, IBM Procurement was short-listed for each of the 6 entries it entered a submission for, and picked up 2 major awards – the Transformation award, and another for Risk Mitigation.

Procurious is working with our Knowledge Partner, IBM, over the next 12 months to promote cognitive procurement to our global community. To learn more about IBM Global Procurement, click here.

Trump Has Exposed Corporate America to a Carbon Tariff

Putting aside the issue of catastrophic global warming for a minute, let’s look at a very possible consequence of the U.S. withdrawal from the Paris Agreement – retaliatory measures from other nations in the form of a carbon tariff on American products.

Well, there goes the planet.

Trump’s withdrawal from the Paris Agreement has dominated the headlines all weekend, and rightly so – it’s regarded by many as the most devastating decision of his presidency so far.

Rather than dwelling on what has already been covered – the diminishment of U.S. moral leadership, short-termism, isolationism and the rejection of science – let’s examine the very real threat of economic countermeasures from other nations.

The idea of a carbon tariff was first suggested by former French President Nicholas Sarkozy in November last year. “[If Trump] won’t respect the conclusions of the Paris climate agreement … I will demand that Europe put in place a carbon tax at its border, a tax of 1-3 per cent, for all products coming from the United States, if the United States doesn’t apply environmental rules that we are imposing on our companies.”

Writing for Forbes last week, London Business School’s Ioannis Ioannou suggested a similar course of action:

“Countries and transnational institutions should seriously consider and carefully evaluate potential sanctions or economic countermeasures. A tax or import tariff on U.S. made products and services would account for carbon emissions used in the manufacturing process or, more ambitiously, incentivise leading companies to move parts of their business out of the U.S.”

Leading U.S. CEOs alarmed

As part of a last-ditch plea from Corporate America to dissuade Trump from his decision, an open letter was published last week in Washington, D.C. newspapers and signed by companies including Apple, Google, Facebook, Microsoft and Unilever. Amongst the warnings listed in the one-pager, the risk of retaliation was called out:

Withdrawing from the agreement will limit our access to [clean technology markets] and could expose us to retaliatory measures.”

It’s not just the dot coms who have come out in support of the Paris Agreement. Oil giants ExxonMobil and ConocoPhillips made the case that the U.S. would be much better served by having a seat at the table to “safeguard its economic and environmental best interests” – i.e. retain a veto – in future climate negotiations.

The fairness argument

Trump used the word “fair” and “unfair” multiple times in his speech:

“The bottom line is that the Paris Accord is very unfair at the highest level to the United States.”

“…Negotiate our way back into Paris under the terms that are fair to the United States and its workers.”

“…Under a framework that is fair and where the burdens and responsibilities are equally shared …

“We want fair treatment for its citizens and we want fair treatment for our taxpayers.”

The decision to withdraw, however, means the U.S. will have the fairness argument thrown back at it. As trade partners including Canada, Mexico, China and the EU implement carbon trading systems and caps, resentment is likely to grow towards the world’s second-largest emitter of carbon dioxide. For countries looking to address this disadvantage, a carbon tariff would serve to level the playing field.

Dirk Forrister, International Emissions Trading Organisation president and CEO, made the point that the Paris Agreement was designed to avoid this situation from occurring:

“The notion of a trade battle over climate change is something everyone’s tried to avoid for two or three decades. That’s why we have an international agreement to put everyone in the same frame.”

Here’s the good news

Trump wants to renegotiate his way back in. While Trump’s apparent willingness to re-enter the Paris Agreement on American terms shows some promise, it may not be possible. Christiana Figueres, the former UN official who led the negotiations, said this isn’t how international agreements work. “You cannot renegotiate individually,” she said. “It’s a multilateral agreement. No one country can unilaterally change the conditions.”

Other nations are rallying: There has been some commentary after Trump’s announcement that the Paris Agreement is actually stronger without U.S. participation. While many of the arguments inevitably read like sour grapes, two points ring true: firstly, the announcement appears to have strengthened the resolve of other nations to meet their targets. International leaders are lining up to not only condemn Trump’s decision, but to reaffirm their commitment to the Agreement.

Secondly, the Trump Administration’s rollback of domestic climate policies, including gutting the Green Climate Fund and hobbling the EPA, means that the U.S. was highly unlikely to meet its climate targets anyway. Australian International Relations and Environmental Policy export Luke Kemp argues that this would have set a poor example: “Other countries [would have been] more likely to delay or free-ride on their pledges if they [saw] the US miss its target.”

U.S. states, cities and corporate leaders are embracing a low-carbon economy, despite (or to spite) Trump. Examples include Californian leadership in reducing emissions, and the Mayors of 61 cities across the U.S. pledging on Thursday to meet commitments agreed to under the international accord.

The transition to the renewable economy is gathering pace. The economics of higher energy efficiency, falling renewable energy prices, abundant natural gas, and the rise of electric vehicles and smart grids will continue to displace coal and oil.

November 3rd, 2020: The rollback of the Paris Agreement and other climate initiatives will take years, as will any retaliatory measures (such as tariffs) put in place by other nations. Could the 2020 election become a referendum on the Paris Agreement?

Image: Shutterstock

Colin Powell Talks Security, Trade and Trump at #ISM2017

While many attendees at #ISM2017 were waiting to hear what General Colin Powell would say about President Trump, the former Secretary of State also provided some valuable insights into supply management.

“An army marches on its stomach,” says Powell to a packed ballroom at #ISM2017. “It’s the logistics that allows you to face an enemy.”

Powell draws on his experience in the Vietnamese jungle 55 years ago to illustrate how dramatically the military supply chain has improved. “We just didn’t have efficient supply systems then.” The young Powell was eating plain rice 21 times a fortnight with the occasional slaughtered pig thrown in, because the supply chopper would only come once every two weeks.

Fast-forward to Operation Desert Shield and Desert Storm, the biggest military operation since the Normandy landing. “We realised that it was logistics that would matter. We had to change some rules of behaviour.” Powell talks about some of the creative solutions to logistical challenges in the Gulf, including sourcing trucks from Egypt to move American tanks, early adoption of bar-code tech and using GPS to track those trucks (“we cleaned out every Radio Shack in America”), water scarcity and a vast amount of mail for 425,000 troops that had to be flown in: “I had to get three extra C5A’s, just for the mail.”

Powell believes there’s a lot the military and commercial worlds can learn from each other. “Both sides have to learn what’s going on the world today in terms of speed, service, quality of product and keeping up with the information revolution.” 

On Global Security

“America is not facing existential risk to our existence as it was in the Cold War,” says Powell. “There are problems that are real, but they’re overplayed and blown up.”

Powell gives North Korea as an example. After noting the poor state of their missile technology, he says there simply isn’t going to be an attack. “Give me a strategic reason why North Korea would shoot a missile at Honolulu or San Francisco. What would that achieve apart from ensuring the destruction [of Pyongyang] the following day? All that counts there is the preservation of the regime.”

Similarly, Powell believes concerns around China are overblown. “China won’t be an enemy. They won’t block the routes … It’s a nation that’s extremely important on the world stage. They want to create more influence around the world, [and they’re doing so by] building train systems in Africa, Latin America, the third world. They’re building because they want influence.”

Powell also points out that China is holding a trillion dollars of US paper. “It’s a complex country, but we have to welcome their products and an open, fair trading relationship. China has brought 400 million people out of poverty, not by raising taxes or invading people – they did it by selling stuff. Predictably, as people became more wealthy, they want more. Chinese labour costs will rise.”

On Trump

“I think what Mr Trump has to do now is reverse some of the campaign promises he made that frankly could never have been implemented, such as declaring China a currency manipulator,” says Powell, noting that Trump is maturing in his understanding of these issues.

“It’s in our interest to see him do well. Countries around the world [are] waiting for stability and clarity,  and for these campaign promises to settle down. The rest of the world wants to see coherence and consistency over time in what we say and do.”

Responding to a question about the political and economic impacts of withdrawing from the TPP, Powell says it was an unfortunate decision. “It was in our interest and would have benefited us over time.”

Powell says that the real beneficiaries now will be the Chinese, who are putting together their own trade agreement. “All our [trade] allies are joining China, and we’re standing aside.”

“The world is globalised. I’ve watched our factories going up in China – that’s just the nature of it. Success [can be had] by playing in that game, not wishing it would go away.” Speaking of globalisation in general and NAFTA in particular, Powell says that being mad about problems with trade doesn’t get you anywhere. “Fix it, but don’t throw it away.”

On Generation Next

“I have faith in the millennials and faith in the kids coming afterwards,” Powell says. “I do a lot of work with youth. I can’t change the past, I can [only] watch the present, but I can influence the future through the hearts and minds of young people.”

Networking No-Nos

You only get one opportunity to make a first impression, so don’t blow your chance to make a positive contribution to your personal brand equity by making some classic mistakes at your next procurement networking event.

The way you approach networking in a crowded room depends upon your personality. Is it your first time at the event? Do you stride in like a confident extrovert, or work your way quietly through the room more like an introvert? Does your style of greeting make people feel comfortable, or is it as alien as Mr. Spock’s Vulcan salute from Star Trek?

Throughout my career, I’ve seen some career-limiting moves at the dozens of procurement conferences and events I’ve both organised and attended. Fortunately I’ve learnt a thing or two, which has helped me build a very large, healthy network.

So, what are the protocols for attending a procurement networking event? From my experience, you can’t go too far astray, so long as you avoid eight networking no-nos : 

  1. Don’t waste time

Whether you’re at a cocktail party or a two-day conference, every minute counts.  Don’t let yourself get stuck in a bad session or a non-productive conversation. Stay focussed on your end-game and be ruthless with managing your time. Time wasted indulging in idle chat is time best spent elsewhere.

  1. Don’t hang out with people you know

As comforting as it is to hang out with people already in your network, try to resist the temptation! You can have lunch with your colleague any day of the week, but you can’t meet your next employer or source of important market intelligence in the company canteen.

You have made the considerable effort to get into a room with a whole lot of new people, so challenge yourself!  Push outside of your comfort zone and reap the benefits of engaging with someone new.

  1. Don’t be invisible

After listening to an interesting speaker, make sure you ask an impressive question. Don’t be shy – you can bet there’s someone else in the room that is pondering the same question. Make sure you’re the one with the courage to speak up. Remember to start with your name, title and company when you ask a question to ensure everyone in the room knows who you are. It may prompt someone who wants to meet you to come over and introduce themselves.

  1. Don’t shirk suppliers

Great CPOs make sure they work the Supplier Exhibit Hall. Let’s face it; great conferences wouldn’t exist without the investment of these companies. More importantly, suppliers are an important part of your network. If you want to be across the latest market intelligence and product developments, you need to know what these guys are offering. This doesn’t mean you need to spend hours trawling through supplier stands. Research prior to the event will make sure you are purposeful and efficient.

  1. Don’t have a social media vacation

You might be working it hard with your face-to-face networking, but that doesn’t give you an excuse to avoid social media!  Posting your thoughts, comments and relevant articles will ensure you become more visible at the event. Your posts or tweets may also be re-posted or re-tweeted by the people you tag, which will amplify your presence. Event Apps, for example, are a fantastic networking aid and the most comprehensive place to find out about fellow attendees – and for them to learn about you! Once they know you’re in attendance, people will hopefully reach out to meet up.

  1. Don’t eat alone!

Event organisers serve food to help grease the networking wheels, not just to feed you!  Pluck up the courage to walk up to a new group and introduce yourself. I always politely request to join a group before quickly insisting. “Please, continue your conversation! I’ll listen while I eat.”  With this approach, you’re not rudely interrupting a conversation.  You will learn more by listening and asking a few select questions. If you’re really keen to make the most of the networking event, you may decide not to eat at all! This keeps your hands free for handshakes and your mouth free for answering questions – not to mention some of those embarrassing food moments where you have something hanging out of your mouth, or drop on your freshly-cleaned suit!

  1. Don’t forget your nametag…or your personality! 

So many times I have turned up at a conference, only to find that I’ve left my nametag in my hotel room, which leaves people questioning me all day: “Sorry, who are you?”

One thing I have never left behind is my personality, but so many people do! They feel like they have to put on a mask and act differently in their professional lives. You’ll look far more approachable if you look interesting and interested.  Smile, laugh, enjoy yourself, have a joke but, a word of caution…

  1. …Don’t fake it

My number one networking tip is to network from the heart and be authentic.

The bottom line to all these networking no-nos is to not be shy. Have the courage to throw yourself into those uncomfortable and nerve-racking situations. Introduce yourself, start a conversation, ask that question and find a new buddy! Who knows, you might even start enjoying yourself!

Getting The Biggest Bang For Your Buck At A Procurement Conference

Game-on! There’s a right way – and a wrong way – to approach a major procurement conference. With your company making a significant investment to have you there, here are five tips to help you demonstrate an impressive ROI. 

 

You’ve arrived at a major procurement and supply management conference. Let’s imagine, for a minute, that you’ve hit the fast-forward button and find yourself on the other side – bags packed, standing outside your hotel and waiting for a cab.

How do you feel? Exhausted but satisfied that you’ve made the most of every minute? Or a little bit … guilty? As your taxi pulls away and heads for the airport, will you wonder whether you should have spoken to just a few more people? You’ve attended plenty of sessions, but why didn’t you take more notes?

I know the feeling. It’s so easy to snooze your way through a conference, but it’s crucial that you don’t!

Whether it’s through attending the best of the best speaker sessions, or through networking like a champion, I’m going to show you five ways to get the most bang for you buck.

It’s not a vacation

Remember the glory days when going to a work conference was, essentially, a bit of a treat? Sure, you had to attend a number of presentations but, in exchange, you were gifted a few days out of the office, possibly at a semi-exotic location, and a few cocktails at the bar with your peers.

Today it’s considered an absolute, and rare, privilege to be selected to represent your company at a major professional-development event. Budgets and headcounts are increasingly slashed, which means getting the approval to attend a conference borders on the extraordinary. As such, you can bet you’ll need to demonstrate a pretty sizeable ROI.

But you’ll only make the most of it if you’ve prepared well in advance and bring your A-game to the event itself.

  1. Have a plan

It’s absolutely crucial to understand your key conference objectives in advance. What do you, and your organisation, want to achieve? Maybe your employer is keen for you to find new suppliers, gain market intelligence, or benchmark information? You might have some personal objectives such as finding a mentor or even a new job, or want to use the opportunity to position yourself as a thought leader.

The crucial point is that these events are no longer just about the individual attending.  Attendees need to multiply the investment and make sure that everyone in the team benefits from their learning from this event. This is why it is important for you to “amplify” what you learn back into your team. 

  1. Familiarise yourself with the agenda

Depending on the conference’s size, there could be dozens of sessions, many of which will happen in tandem. Take some time to constructively assess the schedule with your own objectives in mind. Select topics and sessions that are most relevant to you, and think about what will be relevant to your company, too.

Prioritise and plan your itinerary, but don’t overdo it! Be realistic about how much you can achieve, how many sessions you can logistically make it to – and how much information you can actually absorb.

  1. Become a social-media anthropologist

Nothing says “conference efficiency” quite like an advance perusal of the speakers and attendees list. It might seem extremely forward, but an invitation to connect ahead of the event via LinkedIn, Twitter or Procurious is actually pretty flattering. And, if you’ve got the courage to go one step further and send a personal message, you’ve got a great conversation starter when you eventually meet in person.

If online meet-and-greets aren’t your style, you can still benefit from researching the backgrounds and careers of attendees or speakers. This will help you to decide who you are most keen to talk to and if attending certain sessions will be worth your while.

Make sure you upload your full biography and a fabulous profile picture onto the conference App so people can find, and reach out to, you too!

  1. What’s your end game?

You started with the end in mind, you arrived at the conference armed with your objectives and a commendable knowledge of the agenda and speakers. Now you need to decide what sort of report you’re going to present back to your team.  A PowerPoint? Notes?  It’s useful to have an idea of this before the conference kicks off so you can simply fill in the gaps because,  let’s face it,  if you promptly present a comprehensive report to your peers after the event, you’re far more likely to be selected to represent the team going forward.

So, armed with this “straw-man” of your report, attend your sessions of choice and take notes. Engage with your peers to learn their views and insights, and include those in your report too. Go directly to speakers and suppliers and ask them for material that you can incorporate.

If there are media professionals  reporting on the conference, keep an eye out for blog articles with insights from the event, and catch the news from sessions that you weren’t able to attend.

  1. Share Your Learnings

Use Twitter, Procurious and LinkedIn to share key learnings live from the event. Live updates and posts from the event can make you really popular back at the office and ensure that your whole team benefits from your attendance. Don’t forget the hashtag!

 

Don’t Bore The Board

Struggling to get business leaders interested in procurement? You’re doing it wrong! 

The dashboard that Lara Nichols built in her first weeks as SVP of Procurement at NFP was, she thought, a masterpiece. It had everything a procurement professional could wish for – sourcing strategies, savings programs, vendor and risk management targets, governance plans – but it simply wasn’t getting the cut-through she expected outside of the procurement team.

“I’d find that people simply didn’t want to have procurement conversations with me – nobody cared about the typical procurement metrics I was focusing on. I realised that I needed to change my approach to my work to become less of a procurement professional, and more of a businessperson with procurement expertise.”

Now, Nichols’ dashboard is built around what she calls meaningful business drivers. “The underlying data is the same, but I’ve had to re-jig how I talked about it.”

How do you identify your organisation’s business drivers? For Nichols, she took a dual approach:

Connect with the team operating at the heart of the business: “This will be different in every industry, but in insurance brokerage and in many financial services companies, the top-line team is the lead force in our business. I made an effort to become tightly connected with the business development team. We have a huge sales force, so I’ve deliberately familiarised myself with their sales strategy and focused on finding ways to provide support for what they do.”

“My advice is to seek out the people that deliver on the heartbeat of the company’s success, and connect yourself with that team.”

Connect with the CFO: “There’s a reason the CFO is always in the top three roles of a company. Finance influences the whole organisation in so many ways”, says Nichols. “I’ve spent a lot of time with the entire finance team, including my CFO, which has helped me re-align procurement’s contribution in the context of NFP’s numbers, and not the other way around.”

Nichols says that strong financial know-how is therefore vital to any CPO’s success. “The ability to influence the numbers equates to company performance. Procurement and Finance should build a deep and mutually beneficial relationship to truly delivery value we all know is intrinsically there.”

Getting involved in ISM2017

Nichols is Chair of the ISM2017 Conference Leadership Committee, and co-leads the Bottom Line Learning Track.

“Personally, I’m excited to attend the Signature Session run by Amazon Business, called Is Your Tail Spend Putting You In A Tailspin. It’s an important topic. Another session I’m looking forward to will be run by Brooks Brothers, featuring a conversation between a CFO and CPO on How Does the P&L Work, Anyway. It will provide the grounding in Finance that’s so important for success in our profession.”

Nichols is proud of the fact that the Committee has built a program with a diverse range of speakers. “We challenge ourselves to recruit first-time speakers, people who have never had an opportunity to present. Brooks Brothers, for example, have never attended an ISM conference before, but we’re expecting some very valuable insights from their session. On the other end of the spectrum, you have your solid contributors who have been attending and supporting ISM for a long time. They bring an incredible level of insight, experience and wisdom to the conference.

Network, network, network

Two of Nichols’ last three appointments were made possible with the help of her personal network. “In both cases, friends of mine knew the hiring managers. There’d been a discussion at some point about what the business was looking for, and my connection has said ‘That sounds like something Lara would like to do – would you like me to introduce her?’ In both cases, I was hired into an exciting, newly-created role.”

Outside of moving roles, Nichols’ network is invaluable when dealing with what she describes as “wicked problems”. “I ask myself who can I talk to in my network who would have some insights into my problem. The network sustains me – usually it starts with an instant message, which leads to a phone call where we explore ideas and – eventually – the solution presents itself.”

Plan ahead to get the most out of ISM2017

There’s so much choice at ISM’s major event of the year that it can be overwhelming, particularly for first time attendees. Nichols says that this will be the case particularly for people who haven’t prepared.

“Chart a course through the sessions. Read ahead, and think about how to spend your time. Plan it out like you would do before going on vacation! If you’ve done some pre-planning, you’ll have filters in place to help you pick well when you’re presented with a choice.”

ISM has provided plenty of tips to guide attendees through the maze of session, including the Learning Tracks, information on how each session is aligned to certain competencies in the Mastery Model, and proficiencies based on years of experience.

“Be present” says Nichols. “Don’t skip the social activities such as the receptions and networking events. That’s where the real magic happens. Visit the Exhibit Hall – that’s where you can access new information and innovation that you can take back to your office.”

There’s still time to register for ISM2017, taking place in Orlando, Florida from May 21-24.

Planning to attend ISM2017? Don’t miss out on Procurious Founder and CEO Tania Seary’s tips on how to Network Your Way To The Top on Tuesday May 23rd, 3.45pm.