Tag Archives: procurement

Motivating Procurement for the next level of evolution

How do you motivate your procurement team to reach peak performance? Start by asking the right questions.

Procurement is a highly specialized field in most organizations, one that develops leaders as change agents creating value in literally every space that they touch. With the advent of the digital era, there is a greater need to understand and implement technology to foray into unconventional territories and look for hidden value. Thus, motivating the Procurement teams to look for new ways of creating and driving innovation becomes critical in present times.

As we look at motivating Procurement teams, it is important to analyze how the professionals working in different Procurement jobs think about their roles. The recent Procurement 2030 report, courtesy Procurious & Michael Page pointed out the insight that most Procurement CPOs consider talent development and retention as a key focus area for future. Thus, it is safe to say that motivating teams would be a top priority for talent retention in Procurement. This report also highlighted that the buyers and category managers consider almost half of their work as tactical vs strategic, and that almost half of the work can be automated i.e. it consists of repeatable tasks. These are useful considerations in understanding the current scenario before thinking about the next-level progress.

So what could be the ways of motivating Procurement teams into peak performance?

Organisational structures

Based on my discussion with Procurement colleagues across industries, I have come to believe that the right organizational structure in Procurement is a critical first step towards having a productive and engaged workplace. We have seen many waves of changes in Procurement structure across industries over the last few years. First, there were location focused roles, then the category management roles came into the picture. Slowly, the buyer roles also became more globalized versus being local or regional over time. Thus, the Procurement organization has kept evolving.

(1) Evolution of global category management: Most buyers today realize that category management is the way to be and global structures provide maximum visibility to drive change, thereby it is a welcome change to most of us. However, due to many continuous changes, it seems like there is a tendency for some ambiguity structure wise in many workplaces. I recall a peer from a mid-sized organization who had remarked in a forum that he liked building expertise in the global category manager role but at many times, he felt that he was doing the work which was distracting him from his core priorities of understanding business needs and finding creative solutions with the help of his supply base. It is certainly true that organizational structures were not intended to be a barrier when they were put in place. However, often the buyers at entry and mid-level spend valuable time looking for clarity about what they are supposed to do, as core priorities seem not so core when laden with structural challenges.

(2) One size does not fit all: Some organizations follow one structure strictly i.e. they have either the category management specific or location specific Procurement roles, while some have a mixed structure depending on business and country-specific supply needs. Depending on the size of the organization, there could also be a matrix or a hierarchical structure. It is often noticed that layers of hierarchy also lead to slower alignment and execution, thereby affecting creativity. In the face of further change, it would be good if leaders re-assess the current organizational structure that they have and analyze if it is set up for maximum effectiveness. We think about factors such as our business needs and supply needs while setting up roles, but with time as things change, it is good to re-assess design by deep diving internally into Procurement desk responsibilities.

(3) Internal feedback and self assessment to rescue: In the quest to motivate teams and help them deliver with effectiveness, it would be paramount to see where the teams spend most of their time and make changes that help simplify the structure while driving quicker actions. So look internally and ask yourself- Are your organisational structures distracting your teams? Do your teams think they are spending valuable time and energy on tasks which they should not be doing as they do not add value? Is your organizational complexity weighing them down, rather than helping them focus on business needs and external market evolution? A deep self-assessment and appropriate internal feedback could help provide the right design for the future. This could also be the way to get buyers to go deeper on building internal and external stakeholder relationships and removing some tactical tasks to drive efficacy.

Employee Coaching

The current digital era is the era of employee engagement. We have come a long way from the factory age where work was repeatable and top-down approach worked. Now, the best organizations are the ones where employees can feel understood, valued and trusted. Hence, the role of managers as coaches becomes all the more important.

(1) Coaching by asking right questions: I have often thought that buyers are prone to considering some strategic tasks as tactical because that is how these appear superficially. For example, an area new to Procurement where no one has evaluated the scale before could appear so in some cases. Then, for some time the buyer would only manage it as a low priority tactical item, not realizing the full value it can bring to the table if its potential is realized. When I was buying Facilities for Middle-East and Africa region, it was considered a tactical area until we saw the benefit of leveraging full scale by engaging competitive new players in the changing market landscape. Had we not analyzed this area internally and externally, it would continue to be labeled ‘tactical’. The key thus, is getting the right coaching and input, and being asked the right questions to look deeper rather than scratch the surface.

(2) Coaching by internalizing Maslow’s Hierarchy of needs: Good coaches have an understanding of human behavior and motivation. The oldest model known in understanding human behavior is Abraham Maslow’s hierarchy of needs. This can help managers to understand human behavior in office settings also. Usually, people have basic physiological, safety and belonging needs that would require fulfilment before they can reach self-esteem and finally the self-actualization stage. Of course, the peak performance is something that happens at uppermost levels of Maslow’s hierarchy of needs. This model can help both the coach and the coachee to assess themselves. Moreover, it provides the coach with a framework to understand the team first so that they can find ways to motivate people positively. A good coach can notice performance variations in the light of this model for themselves and the team, and use it to point them in the right direction.

(3) Coaching by understanding Losada line: Losada line is also an interesting principle in organizational behavior which measures the positivity to negativity in a system. What it states is that for any positive change to happen, a ratio of 3 to 6 is required. Lower than 3 would not be optimum for a good performance. To give you an estimate, successful marriages usually have a Losada ratio of 5 or above. This can be used by coaches to provide feedback and nudge the teams towards high performances.

In conclusion, as organizations get serious about leading with purpose and boosting positive collaboration for their employees, coaching and re-assessing organizational structures, on top of the existing mechanisms of training and rewards, could help unearth valuable insights paramount for their transformation into more evolved workplaces. While this happens, all of us in Procurement would need to be open to learning new things and adopting a growth mindset. In the words of Satya Nadella, as stated in his book Hit Refresh – “After all, how we experience the world is through communications and collaboration. If we are interested in machines that work with us, then we can’t ignore the humanistic approach.” We need to continue to bring humans closer by embracing collaboration and removing barriers. Do you think this could apply to your organization? What other strategies have helped in your journey?A

What Procurement Dangers Are Lurking In The Shadows?

Just as the organisation’s CIO has been struggling with “shadow IT” the CPO is now faced with similar challenges as company employees armed with a credit card and a browser can buy almost anything online.

For years the enterprise CIO has been struggling with Shadow IT which has been described as “IT systems or solutions used within an organisation without the approval, or even the knowledge, of corporate IT” . This is often referred to as the consumerisation of IT.

Various IT industry analysts reports state that Shadow IT is somewhere between 30-50 per cent of the total IT spend in large organisations and this is a large number considering that this is IT spend that has not gone through the sanctioned IT function.

Shadow IT has transitioned into Shadow Procurement thanks to the rise of digital cloud marketplaces

The ‘shadow’ problem is no longer confined to the CIO with
the CPO also facing a growing population of enterprise staff
that procure and subscribe to many services in the cloud that havent been through the sanctioned process and often they are not allocated to the correct budget codes.

Thanks to the public cloud there are many new digital marketplaces that have lowered the barrier to entry for the end user for procuring a range of products and services (e.g. Amazon, eBay, Alibaba, Google, Rackspace, Microsoft, even crowd sourcing).

Also of concern is that shadow procurement can also include the teams of people hired by the business to provide various services across the business (often these costs are hidden in project budgets or expense codes and not shown against the correct budget categories).

While the CPO aims for compliance the shadow procurement means a further loss of control

For the CIO the issue of Shadow IT often means they are excluded from the decisions of how the IT services are supported as well as assessing the risks of what is being purchased such as security.

Similalry for the CPO the issue of Shadow Procurement often means that they are excluded from important commercial decisions particulalry when the staff member blindly clicks the “accept terms and conditions” button when buying products and services online. These online terms will always favour the supplier and may not satisfy the commercial appetite or the target price point. Only when things come unstuck will these accepted terms and conditions see the light of day.

The rise of shadow procurement flies in the face of the respected analysis of CPO surveys over recent years that continue to place “Procurement Compliance” as one of the top three challenges that the CPO is focused on addressing*.

When Procurement is seen as beeing a blocker then Shadow Procurement is likely to be, or become, an increasing problem

While I have discussed that the rise of the easily accessible digital marketplace has contributed to the increase in shadow procurement there are likely to be a range of other factors that will also determine the size of the problem in your own organisation:

Business and Procurement mis-alignment

Where procurment is seen as a blocker and the process takes too long then the employees will find a way to work around Procurement to achieve business and project goals

Lack of clear roles and responsibilities and an inneffective governance structure

Where the roles are not clear and the governance is inneffective, or not well understood, then the employees may take this as a green light to hire a shadow team within their project or business unit. In some organisations it can become an unnofficially sanctioned fixture

Many organisations are decentralised and large programs/projects operate separately to the Business-as-usual functions such as Procurement

Because many companies are decentralised and indirect spend is spread across departments and projects, there is typically little input from procurement.

Little or no use of big data analytics to understand the indirect spend occuring as part of the Shadow Procurement problem

  • Indirect spend is often very difficult to understand as the shadow procurement buyers don’t use a formal process in purchasing goods and services for the indirect spend. indirect purchases are often made off contract.
  • Therefore spend data is not effectively leveraged or analysed, or spend data is typically incomplete and not coded by the commodity or category.
  • Instead, spend data is linked to accounting or expense codes, and purchase orders are either not created or if they are created they can be vague or created “after the fact.”

Procurement have not leveraged digital disruption putting themselves in front of employees like their “shadow suppliers” have done

  • If your employees rely on digital and mobility solutions to buy, then you have to have a procurement solution that is mobile-centric and digitally-enabled
  • Automation of a quicker quoting and approval process is just one key factor

The Bottom Line For The CPO

  • Partner with stakeholders to better understand their needs, supplier relationships and processes. Show them that you’re not just trying to find a lower price at the expense of their quality requirements, supplier relationships or the time they have available to move
  • Embed procurement staff into their project teams to bridge the misalignment gaps
  • Adopt an “agile procurement” approach to shorten the time it takes to complete the procurement cycle. An RFP is not always required and there are many opportunities to leverage flexible and agile thinking
  • Invest in big data analytics to understand the company’s indirect spend amount, categories and how many suppliers are currently being used in each category. Leverage consultants spend analysis tools or request data from suppliers to achieve better visibility into your spend data
  • Implement an eSourcing tool to better manage indirect categories supported by automated processes

Food Allergy Deaths Avoidable With Blockchain

The recent cases of tragic deaths caused by food allergies has opened afresh the debate on fully transparent supply chains.

Many of you will have seen or read news reports in the past couple of weeks regarding the tragic deaths of two women due to severe allergic reactions to eating pre-prepared food. In both cases, the food in question was purchased from the same retailer, though the resulting actions from the cases have been markedly different.

The cases have highlighted industry-wide issues regarding food packaging and labelling relating to allergens, as well as reigniting the debate on where the responsibility lies for food content and allergen checks within the supply chain.

Inadequate Labelling and Mis-sold Products

The first incident occurred after a woman ate a pre-prepared baguette that had sesame baked into the product, but had not been listed on the product’s ingredient list on its packaging.

A recent inquest found that the retailer had “inadequately labelled” its products, failing to highlight the presence of sesame in the food. While the organisation agreed with the coroner’s verdict, it has thrown a spotlight on industry packaging requirements, particularly when it comes to listing potential allergens.

The second death was as a result of a severe allergic reaction to the presence of dairy protein in a pre-packaged sandwich. However, unlike in the first case, the retailer has pointed the finger of blame squarely at one of its second-tier suppliers, claiming it was mis-sold a guaranteed dairy-free yoghurt.

The supplier in question, with whom the retailer has since ended its relationship, has rejected the claim that its product was to blame. They had their own supply chain issue in February 2018 when they were forced to recall some of its products due to undeclared milk, resulting in it ending a relationship with a third-party supplier. The supplier has denied that the recalled product is the same product as caused the allergic reaction, though the retailer and two independent authorities have conducted tests showing that the yoghurt in question had levels of contamination.

Where the fault lies for the contamination will be established in due course. And though this ultimately pales in comparison to the tragic loss of life, it does raise a couple of serious questions: Where does responsibility lie for ensuring product quality in the supply chain? And what can organisations AND suppliers do to ensure full supply chain transparency?

Introducing Blockchain to the Food Industry

The debate on the first question will continue to rumble on. In reality, the responsibility lies with every party, irrespective of which tier they are in the supply chain. That said, the buck ultimately stops with the end user, retailer or seller to ensure products are fully labelled and they are satisfied they are selling a quality (and safe) product.

The answer to the second question may be closer than you think, however. Blockchain has been discussed at length on Procurious and its applications in the supply chain are well documented.

Plus it helps that the world’s largest retailer, Walmart, has just unveiled its new food industry blockchain ambitions in China. The retailer plans to use the existing, proven, technology to ‘overlay’ the supply chains in the notoriously complex industry.

And with major producers such as Dole, Nestle and Unilever on board, as well as IBM as a technology development partner, this does have the signs of being the first step on a (long) road to success.

Success that could usher in new processes for how food information is obtained, stored and shared, allowing all parties to track the provenance of food from farm to table. This will give all levels of the supply chain the transparency required to know products are both safe and of the highest quality.

With what has been in the new recently, with impacts that none of us can predict and that potentially extend further than any of us know, this may also represent the first step to ensuring the similar tragedies don’t happen again.

Read more on Walmart’s food industry blockchain ambitions here.

6 Principles of Persuasion Explained With Propaganda Posters

Learn how to persuade your colleagues and suppliers with 6 tips from 20th-century propaganda masters. Guest post from Invaluable.com.

“Make Great Strides in Studying Daqing, Strive to Make New Contributions in Agriculture.” Original vintage Chinese propaganda poster, via Antikbar.

Since their introduction in 1984, Dr. Robert Cialdini’s six principles of persuasion have become the framework for understanding the science of influence. Each principle is distinct and outlines different methods for effective persuasion.

Mastering the art of persuasion has become a major “soft skill” in the modern corporate world. The ability to influence others is key to developing strong relationships with suppliers, employees and end-users. Persuasion can help to convince others that we are credible, trustworthy leaders worth following and allows us to manipulate the psychological processes of others to our benefit to achieve better results.

In the procurement profession specifically, strong persuasion skills can help to convince your organisation to be more strategic in managing money and can also be a key factor in your fight to minimise maverick spend.

Learning from the propaganda masters

Before the rise of the social media influencer, advertising and propaganda posters were some of the most powerful persuasion tools available. Propaganda posters have been used for decades to inspire, educate, and galvanize the public. Whether you are selling a product, a war, or an idea, advertising can be a powerful tool to inform and persuade your audience. Propaganda posters from the 19th and 20th centuries addressed topics ranging from patriotism to healthcare to feminism.

This article, originally from Invaluable, takes Dr. Cialdini’s six principles of persuasion and applies them to famous propaganda posters used throughout history to wield influence and power over their audiences. With their striking imagery and bold messages, these posters are superb examples of each principle and perfectly illustrate the mechanics behind persuasion.

1. Reciprocity

“Remember Your First Thrill of American Liberty,” 1917. [Records of the U.S. Food Administration]
The first principle, reciprocity, is based on the idea that people often feel obliged to match or repay the behaviors and gifts they receive from others. When using the principle of reciprocity for persuasion, look for opportunities to be the first to give, and make your token unexpected and personal whenever possible. This tactic facilitates a relationship in which the recipient feels appreciative of your contributions and is likely to be more open to the message you share or the favor you ask for.

The propaganda poster “Remember Your First Thrill of American Liberty” is an example of reciprocity in action. This poster was created by the Food and Drug Administration in 1917 to encourage immigrants to the United States to invest in the war effort by purchasing Liberty Bonds, which were a crucial source of funding for the war effort.

By highlighting the benefits and opportunities that the United States had given to immigrants, the poster called upon its audience to invest in the country’s war effort in return. The poster also strategically included the Statue of Liberty as a metaphor for the opportunities available in the United States and to remind immigrants of the emotional experience of arriving in the U.S. for the first time. The artist’s powerful illustrations and the poster’s authoritative call-to-action prompted Americans to recall their debt to their country, which ultimately proved persuasive in raising money for the war effort. This poster remains a powerful example of the way reciprocity persuades us to act.

2. Scarcity

“Doctors Are Scarce,” 1943. [San Jacinto Museum]
The second principle of persuasion, scarcity, refers to the idea that when people have less of something, they want it more. Scarcity speaks to our human nature to place greater value on things that are less readily available. To use this principle, incite people to act, agree, or buy your product by demonstrating how they can benefit from it, what’s unique about your offering, and what they could potentially lose out on.

In the poster “Doctors are Scarce, Learn First Aid and Home Nursing,” the artist used the scarcity principle to promote basic at-home care. By making it clear that good medical care would be hard to come by, the poster instilled fear and communicated the importance of individuals learning to manage their own minor health concerns. The poster was created to communicate people’s need to learn to handle their own injuries and illnesses since many doctors were oversees fighting in the war effort.

This poster is historically significant because it is one of the many examples of ways Americans on the home front were forced to ration supplies and services to aid in the wartime effort. Its message drove Americans to act and remains a powerful reminder of the scarcity principle and its ability to influence.

3. Authority

“Christ Guerilla,” 1969. [Antikbar]
The third principle of persuasion is authority. This principle says audiences are much more likely to listen to messages from sources they respect or view as experts. Whether you are explaining your point of view or selling a product or service, showcasing your credentials will help your chances of success. No matter what your message is, it will be better received if it is packaged in a way that makes it seem authoritative.

When using authority, the source doesn’t always need to be yourself. When someone else points to your credentials the message can be just as powerful or even more effective. In the propaganda poster “Christ Guerilla,” Jesus was portrayed as a guerilla fighter. The poster was created by the Organisation of Solidarity with the People of Asia, Africa, and Latin America based on a quote from the Colombian priest Camilo Torres who said, “If Jesus were alive today, he would be a guerrillero.”

The poster called on the authority behind the Christian religion to convince audiences that being a guerilla fighter was a noble cause. This piece of propaganda was created in Cuba during the 1970s as part of a political movement to fight imperialism and defend human rights. Its message was clear: guerilla fighting was noble, necessary, and moral. Because the poster called upon the authority of Jesus to deliver its message, its theme was especially resonant for its audience.

4. Consistency

J. Howard Miller, “We Can Do It!,” 1942. [Smithsonian]
The consistency principle refers to the idea that people like to remain resolute with the things they have said or done in the past. If someone already agrees with some of your message, or if you are able to get your audience to buy into your point of view in a small way, you’re much more likely to convince them to take further action.

The “We Can Do It!” poster used the consistency principle to encourage women who were already working in factories to work harder. While today this poster is considered one of the most iconic U.S. propaganda posters of all time, it was not widely circulated during World War II when it first appeared. The poster was made in 1943 by J. Howard Miller for Westinghouse Electric, and was part of a broader effort to encourage both male and female workers to work harder due to the high demand for manufacturing generated by the war effort.

The poster resonated with women in its original context in the 1940s and continues to serve as an icon of feminism today. When it was first created, the poster used the consistency principle to remind women of the importance of committing to their factory jobs while encouraging them to work harder and stay motivated. The likeness of Rosie the Riveter still resonates, and the poster has become a rallying cry for recognition of equality.

5. Liking

“Women of Britain Say ‘Go,’” 1914. [British Library]
It’s commonly accepted that people are more likely to agree with the opinions of someone they like. The fifth principle of persuasion, liking, is based on this idea. This principle notes that people agree with those who are similar to them, those who pay them compliments, and those who cooperate with them. If you know your audience already likes you, you have a leg up for persuasion, but incorporating these three factors into your communication efforts can go a long way towards making your audience receptive to your message. Before making your case, consider spending a few moments with your audience to build rapport and likeability.

The poster “Women of Britain Say ‘Go’” incorporated the liking tactic to encourage the men of Britain to buy into the government’s request to join the war effort. During World War I, posters were one of the most important mediums for conveying a message. Women were used in these posters to spread ideas of morality, innocence, and justice in the face of danger.

While this poster was intended to remind the women of Britain to encourage their men to enlist, it also clearly communicated to British men that they’d be spurned by their loved ones if they refused the call to serve. Using the opinions of their families as advocates proved to be an effective persuasion tactic in getting men to enlist.

6. Consensus

“Let’s Fulfill the Plan of Great Works,” 1930. [Polish Greatness]
The sixth principle, consensus, is the idea that people are likely to agree with something if it is in line with what the broader group believes. To get others to believe in your message or your product, point to what those similar to your audience believe and do. When people are unsure of how to act, they look to the behaviors of others they identify with to determine their own beliefs. By highlighting what your audience’s larger social group thinks, you are more likely to get their buy-in.

The title of the poster roughly translates to “Let’s Fulfill the Plan of Great Works,” and shows clear parallels to the consensus principle. The tiny hands fill up a larger hand to communicate to the viewer that all of Russia is working together to reach a common goal. The poster was created in 1930 by Gustav Klutsis, a popular poster artist during this time period who was a popular designer for the Soviet government. This piece was created in the Constructivist style, which originated in Russia in 1919.

Klutsis was associated with the Communist party and created propaganda art for the organization, especially when the party was under the control of Stalin. The hand in this poster is Klutsis’ own hand, but it was used in the poster to represent the workers who were crucial to achieving the Communist party’s goals. The artist incorporated the faces of the workers directly into the poster’s design so they appeared not as individuals, but as a collective mass united around the same goal.

Sources

Canva | Influence at Work | Conversion XL | Docs Teach | University of Pennsylvania | How Stuff Works | Huffington Post | Gettysburg College Projects | International Institute of Social History | World Digital Library | Smithsonian | Buzzfeed | San Jacinto Museum

Procurement In 7 Memes

They say a picture tells a thousand words. How about a procurement meme?

Okay, millennials. Strap yourselves in, because I’m going to attempt to meme. Is meme even a verb? Perhaps not, but that isn’t going to stop me.

For older readers who don’t really know (or care) what memes are, don’t worry – I’ve got you covered. Whether it’s Bad Luck Brian, Kermit Sipping Tea, or King Leonidas screaming “SPARTA”, I’ll attempt to add a bit of context around the meme before applying a Procurement gripe to each.

1. Boromir Demurs

Rivendell; Middle Earth. The mood is tense. Gandalf has brought together a motley crew of humans, elves, dwarves and hobbits to discuss how best to destroy the One Ring, which has to that point proven impervious to both magical and physical force. A solution is put forward – take the ring to the enemy realm of Mordor and throw it into the volcanic fires of Mount Doom. At this point, the human warrior Boromir makes his most famous speech of the film, beginning with the words “One does not simply walk into Mordor…”

Since The Fellowship of the Ring, Boromir (Sean Bean) has become a meme, trotted out as a retort whenever someone suggests something that’s impractical, unrealistic, or simply a bad idea.

Here’s my procurement take:

Amirite? (Am I right?) This is Procurement 101 stuff – a company that selects its suppliers based solely on the cheapest quote will inevitably run into risk and quality issues. And besides, if that’s the strategy, then you might as well set up an e-auction system that automatically selects the cheapest bidder, then dispense with the procurement function altogether. Which brings us to…

2. Bad Luck Brian

Poor Brian. This high-schooler in his plaid vest and braces never gets a break. The meme generally follows the formula “[Brian does something positive … something terrible happens”]. For example:

“Spends all night studying … sleeps through exam”

“Only Facebook friend is mum …. cyberbullied”

“Wins a free cruise … on the Titanic”

From a procurement viewpoint:

Procurement professionals LOVE robotic process automation. Think of all those humans doing repetitive tasks at your organisation that could just as well be done by a robot. It’s a cost-saving no-brainer, right? Bring in the bots! Great idea – until it happens to you.

3. American Chopper Argument

Stills of row between father and son from the reality show American Chopper have recently become internet hits. The meme format lends itself well to any internet argument – whether it’s a discussion about the best pizza toppings, or a protracted “debate” in an academic journal.

For my text, I’ve taken an excellent debate from the Procurious Discussion section about reporting on Cost Avoidance. Check it out:


4. More American Chopper

I could do this all day … here’s another debate from the Discussion section, this time on Decentralised vs Centre-Led Procurement:


5. Distracted Boyfriend

This has to be my favourite meme of all due to its simplicity. A man walking down the street turns to leer after a woman walking past while his girlfriend stares at him with an appalled look on her face.

In procurement land:

We’re about more than cost savings!! Really!

I’ve heard this sad story again and again. Procurement professionals are eager to show their organisations that they’re more than a one-trick pony. We talk about how we can improve operational efficiency, bring in CSR & social procurement initiatives such as fighting modern slavery, and even generate top-line growth, but it’s incredibly disheartening when the boss (usually a CFO) only cares about one thing… cost savings.

 

6. Leonidas Goes Nuts

The film 300, a retelling of the Battle of Thermopylae in the Persian Wars, contains a gem of a scene where the Spartan King Leonidas loses his patience after being threatened and insulted by a Persian envoy. The envoy, suddenly in fear of his life, says “This is madness” before Leonidas responds with: “This is SPARTA” – and kicks him down a well. It’s an intense moment, as the Spartans know that the murder of the envoy makes war inevitable.

I’m really not advocating the murder of suppliers, but there are moments when you do have to remind them of the terms of a contract.

 

7. Kermit The Frog looks smug

This meme is particularly useful if you want to be facetious. Kermit the frog, calmly sipping a glass of Lipton tea, has lent himself to many a captioned meme ending with the phrase “… but that’s none of my business”.

As procurement professionals continue to wage their endless struggle against maverick spend, we inevitably have a lot of “I told you so” moments when an unapproved supplier turns out to be a disaster. Along comes Kermit…


How To Deal With The Office Timewaster In 4 Videos

There are few thing more frustrating in life than a workplace timewaster. And the worst thing? They come in all different shapes and sizes, which makes them harder to spot!

ESB Professional/Shutterstock.com

Colleague: “Hey there buddy, did you have a good weekend?”

Me: “Sure did! But I’ll have to tell you about it later because I’ve got such a busy …”

Colleague: [Sits on the desk] “Great, great… let me tell you about my weekend. Let’s see, now. It all started to kick off on Friday, just after our last conversation…”

Sound familiar? We’ve all encountered chronic timewasters at work, which is why I’ve created this quick and easy video guide on how to shut them down so you can Get Sh#t Done.

Let’s start by working out what type of timewaster you’re dealing with.

1. The Chatter

Some of us like to keep our work life and social life separate. For others, their work life is their social life. Of course there should be a fun, chatty environment at work, but again, there’s always one person who doesn’t understand the limits. So, next time you find yourself making sympathetic noises while your colleague is telling you about their various cats’ medical histories, consider the fact that it will be your neck on the line when a deadline is missed.

How to shut down a chatter: Put a cap on their time – tell them before they begin that you’ve literally only got two minutes to spare. If you really want to drive home the point, get your phone out and set a countdown timer and place it on the table between you.

2.The Delegator

I’ve worked in the past for line managers who are guilty of this, although you’ll often come across colleagues working at the same level who think it’s okay to handball mundane tasks your way.  Specifically, my beef is with people who basically treat you like a search engine. For example:

“Mate, would you mind telling me the time difference between here and Beijing?”

“How much is that converted into Euros?”

“How long will it take me to drive to head office?”

Here’s why it’s frustrating – firstly, they’re really undervaluing your skill set. You were hired for your education, your experience and your intelligence, not your ability to type words into a box. Secondly, they’re just being lazy! I’ve rolled my eyes in the past when I’ve received an emailed question (like the above) which would have been answered straight away if my boss had simply typed it into Google instead of sending it to me.

But luckily, there’s a handy tool for just this situation.

How to shut down a Delegator: Six words: Let Me Google That For You. This tool is a brilliant way to answer a question that should have been googled. It generates a short, tongue-in-cheek tutorial about how to use a search engine (starting with “This is the internet”) and finishes with the answer to the original question. Check it out.

3. The sounding-boarder

Extrovert: “Man, I LOVE open-plan offices! They’re so great for bouncing ideas off people!”

Me: “Yes. Every single idea you’ve ever had.”

Okay, it’s true. Open plan offices, and even collaborative online workspaces like Slack, are ideal for airing and sharing ideas. But some people take the concept of the “sounding board” too far. This might involve a colleague regularly reading aloud emails that they’ve crafted before hitting send, or running stuff past you that really doesn’t require your input or opinion.

How to shut down a Sounding-Boarder:

  • Invest in a pair of noise-cancelling headphones and pretend you’re on an important call whenever your colleague gets that “sounding-board” look in their eye.
  • Give them a very short list of high-level areas where you feel you can add value.
  • Give them a taste of their own medicine by sitting them down and reading aloud the longest, dullest report you can find.

4. The Meeter

Me: “Oh, hey, just a reminder that we’ve got that client meeting tomorrow. Everything is under control, and I’ve sent you all the information you’ll need.”

Colleague: “Let’s have a meeting about that.”

Me: “Why? WHY?”

How much time and resources will corporates keep pouring into unnecessary meetings before they see the light?  Unnecessary meetings are so despised that they’ve become a meme. They’re a regular feature in Dilbert, and you can even buy a coffee mug that says “I survived another meeting that should have been an email”.

How to shut Meeters down: Insist that the person gives you some good reasons for the meeting. This includes a stated purpose, a start and end time, and a valid reason for each person to be there.

Do you know any other types of timewasters in the office? Leave a comment below!

Procurement Pudding (It’s A Trifle Complicated)

Nothing says Procurement quite like a classic trifle; it’s intricate, it’s complicated, but if you get it right… everyone wants a piece of it!

As the holidays descend upon us, it’s time to start winding down the gears to relax and – inevitably – reflect on the year that was!

Time with family and friends for me is synonymous with food! Because I almost always spend this time of year in the southern hemisphere, it’s a summer menu. It’s more about prawns and pavlova than pork and pancetta (although the latter does make it onto table anyway!) But, of course, that other p … the “p” we all love – procurement – is never far from mind and always on the menu for discussion!

During the year I have been fortunate to speak to procurement and supply chain audiences around the world about the trends we are seeing on Procurious and the impending impact of Industry 4.0 on our profession. In order to provide a framework for thinking through all the challenges and opportunities, I have been sharing a rather quirky analogy by comparing the well-loved English pudding – the trifle – to procurement and supply chain today. Putting up a giant image of a pudding on the big screen at a conference is also a great way to get your audience’s attention!

For the uninitiated, constructing an English trifle involves carefully layering sponge, jelly, custard, fruit, cream, and often garnishing with a heavy sprinkling of nuts.

Yet each layer remains distinct, and that’s how I think of procurement today – a series of self-supporting layers that feed into and out of each other. To manage our roles, we need to understand the strengths and weaknesses or the “setting points”, of those layers if we’re to stay ahead.

Let’s think through some of those layers.

Navigating the Nuts

Let’s start with the top layer of nuts. A generous sprinkling of the unexpected! This is how I think about the Black Swan events that seem to occur with alarming regularity these days. We need to be thinking about these unthinkables – hurricanes like Harvey that de-commission whole cities, man-made catastrophes like the Tianjin port disaster, not to mention recent terrorist attacks. If we can’t predict them, we can at least prepare for the unexpected, take pre-emptive action against disasters that could destroy our supply chains and analyse areas of high-risk.

Geopolitical jelly

Brexit is just one example of how our supply chain forward planning can become somewhat suspended by macroeconomic and geopolitical changes. In Europe, the UK’s decision to activate Brexit is having clear ramifications including a rise in nationalism that’s reflected across Europe. Currency fluctuation and workforce migration also impact procurement and supply chain. The costs to import goods within supply chains will increase; there could be a loss in freedom of movement both in goods and services for UK and EU businesses, and procurement talent could also be considerably affected if the talent pool is reduced.

The Fruits of Progress

We all have front row seats at the parade of new and exciting technologies that are driving the 4th industrial revolution. The rise of the Internet of Things, robotics, blockchain and artificial intelligence will create what we are calling Procurement 4.0.

Cognitive procurement & supply chains are the most exciting developments to happen during my 20-year career. These innovations will enthuse a whole new generation of procurement professionals to join our ranks, but we need to be flexible, agile and able to foster a culture of continuous invention to stay on the leading edge and avoid extinction.

The Foundation Layer

Finally there’s the layer in which we hold the power: Procurement.

Procurement is the sponge at the bottom of the trifle. No matter how many unstable layers of fruit and jelly and custard are piled on top of us, we remain intact. We successfully juggle with the events and changes over which our stakeholders and suppliers have only limited control.

Fortunately, social media helps. I don’t know about you, but when my phone is pinging through the night with texts and emails from the other side of the globe, I’m often tempted to turn it off. But I don’t, because for all the downsides of being constantly online, the benefits of being connected are immense.

Three out of four of our respondents to our Gen Next Survey believed that being well-connected online actually improved on-the-job performance. By using resources like Procurious, not only can we maintain the layers of our trifle by staying aware of these constant changes, but we can also gain access to an enormous diversity of ideas and enthuse the next generation of procurement talent.

The Cream of Procurement Talent

To meet the challenge posed by the top layers of the trifle – unthinkable events, geopolitical earthquakes and disruptive technology – attracting the best and brightest to the profession is vital to our success.

To do that, we need to think hard about how we are bringing on Generation Next, and giving them every opportunity so their impact is not just local, but global.

While we’re talking about talent, here’s another “unthinkable” to ponder – our Gen Next survey also discovered that over 70% of our 500+ survey takers intend to leave their organisation within the next five years. How can we respond to this? The worst thing to do is to keep up the pretense that every member of your team will be sitting at the same desk in ten years’ time. Instead, it’s time to throw away the retention plan and accept the reality that today’s workforce is increasingly mobile.

But this doesn’t mean giving up on developing your team. If you’re known as a supportive manager who gives others the opportunity to go on to a stellar career, you’ll become a talent magnet in the profession. Just image the level of superstar talent that you’ll attract if you develop a reputation as someone who produces future CPOs!

Cutting Through The Complexity

Change management is such an integral part of every senior procurement professionals’ role, and often involves driving change within your organisation and amongst suppliers on a global scale.

The good news is that we’re exactly the right people for the job. Procurement’s position as the conduit of supplier intelligence, our ever-growing level of influence in our organisations, and our keenly-honed negotiation and communication skills make us natural change-management gurus.

Remember that trifle?

The challenge for today’s procurement leaders to deftly cut through all those quivering layers of economic, social, political and technological complexity to serve up a slice of procurement solutions in such a way that your audience will devour your change agenda with gusto! 

Bon Appétit!

Meet the James Bond of Procurement

Looking for some holiday reading? We review Christopher Hepworth’s “The Last Oracle”, a fast-paced thriller starring Sam Jardine, the world’s greatest negotiator – and a procurement professional!

As a series of bizarre climate-related events occur across our planet, it seems the world is edging towards a catastrophic tipping point.

Rex Daingerfield is the owner of a giant fracking company that seeks to exploit a rich seam of gas in the environmentally sensitive Greenland ice shelf. But Daingerfield has a nemesis – his daughter. Born to an Egyptian mother, she is inducted as the Oracle of the Temple of Sekhmet. Her role is to protect the earth from the likes of her father.

The Oracle recruits the world’s greatest negotiator, Sam Jardine, to convince her father to change his destructive business model. But a secret society of the rich and powerful stands to profit from the chaos that has gripped the world. Led by an errant priest from the Temple of Sekhmet, they will do anything to stop Jardine.

As the planet edges closer to disaster, Jardine is confronted by politicians, lobbyists, vested interests – even his own radicalised half-brother – all of whom stand to gain from the mayhem about to be unleashed.

Sounds exciting, doesn’t it? Here’s what we enjoyed about this book.

A procurement hero

Sam Jardine is a procurement professional who is sent all over the world on special projects when his incredible powers of negotiation are required.

He is described in some of the advertising around The Last Oracle as “the new James Bond”. There are certainly some similarities – he keeps his cool in the novel’s many action scenes, he loves fast (solar-powered) cars, and he wins the heart of at least two female characters. But in many ways, his character has more depth than Bond. Jardine isn’t always sure of himself, and one of the strongest themes running through the book is his internal conflict between loyalty (and fear of) his oil-industry employer, his own conscience and his knowledge of impending climate catastrophe. He’s also very fallible – he makes mistakes, he gets severely injured on more than one occasion, and he doesn’t always “get the girl” despite his good looks and charm.

Jardine is also described as the world’s greatest negotiator – and this holds true, with arguably the best scenes in the novel being negotiations. Jardine leverages his cultural intelligence when negotiating with an African tribal chief, thinks fast to save his job in an interview with his furious CEO, negotiates for his life before a vengeful Egyptian goddess, locks horns with Washington lobbyists and politicians, and even extracts a multi-million dollar family secret from a drunken uncle in an English pub for the price of two pints of ale and a packet of crisps. The back-and-forth dialogue in these scenes is spot-on, and Jardine frequently wins the day by taking a risk that his opponents (and the reader) doesn’t expect.

The characters

Although there are some characters in the novel who have more scope for development, such as the ruthless fracking tycoon Rex Daingerfield, the bullish oilman Chuck Crawford, and even some radicalised Islamic terrorists, there are a handful of characters that are gratifyingly complex. We’ve already mentioned the hero Jardine’s internal struggles. Daingerfield’s mysterious daughter, Sienna, is one of three strong, intelligent female characters that Jardine interacts with, and faces a schizophrenic struggle between her identity as a holy oracle of an ancient Egyptian goddess, her filial duty to her father, and her mission to prevent an environmental holocaust. This conflict eventually lands her in psychiatric care. The theme of mental health is also present in Jardine’s younger brother Jack, whose internal demons and severe lack of judgement makes him an easy recruit for the aforementioned terrorists. 

The author is a CPO!

To let you in on a secret, “Christopher Hepworth” is actually a pseudonym. The author is head of procurement in their country for one of the world’s leading insurers, and therefore knows a thing or two about negotiation.

The world needs more procurement heroes, including fictional ones, to help raise the profile of the profession. Five stars!

The Last Oracle is the third Sam Jardine Thriller from author Christopher Hepworth. Read more reviews and purchase your copy on Amazon.

I’d Like To Purchase Some Expert Advice

Obtaining access to high quality consultancy services can often be the crucial factor in the success of a project. But buying advice is also one of the most confusing challenges for procurement. How can we overcome this?

Despite some consolidation in the financial consultancy sector, the overall market for consultancy services continues to grow, with the global consulting market valued at $250 billion.

While technology consultancy is leading the continued growth curve, other sectors including HR, operations and strategy are making strong contributions to overall value. For those seeking consultancy services, the market however can be complex. Is there a way to simplify the complexity of procuring consultancy services?

Why are consultancy services so confusing for buyers?

Much has to do with the breadth and depth on offer. Consultancy services are available in just about every industry possible and the sector continues to grow. The broad reach and sheer volume of suppliers can make it difficult to identify the best consultant for your needs. Take ‘Digital Transformation’ consultancy services as an example. It was barely recognised a sector just a few years ago, now it’s worth over $23billion and represented over 15% of the global consultancy market last year.

Consultancy services are provided by organisations large and small,- from multinational organisations and specialist niche providers to freelance independent consultants – often with much crossover in between. Many of the companies started life offering a single specialism but have grown and added additional services to their portfolios as their sector and market experience has developed.

Consultants often use a variety of language and definitions to describe who they are and what they deliver. With no single regulatory body on board to help define the market, its no wonder that buyers can find drawing comparisons a challenge.

As procurement budgets decrease globally, the lack of resourcing and specialisms often means that in-house buyers are generalists not specialists. As a result they may not have the insights into specific markets to be able to evaluate different consultancies meaningfully.

As a professional buying organisation, ESPO’s recent experience in building its largest ever public sector consultancy services framework highlights just how crowded and complex the marketplace is. It received a record number of tenders from suppliers – evaluating over 240 tenders before awarding 135 to the framework. As part of the process ESPO found that the marketplace is so complex that public sector buyers often remain with the same consultancy provider for years to avoid going through the procurement process again, putting budgets at risk.

Top things to consider when buying consultancy services

Utilising a team of 12 procurement experts with cross sector experience drawn from across the organisation and externally, ESPO was able to effectively evaluate the tenders before awarding the successful organisations a place on the framework. Here are its top considerations for buying consultancy services:

  1. Closely define your outcomes or objectives. By identifying the outcomes, procurement teams can work backwards from the end goal to define the exact service required.
  2. Request case studies. This will help you understand the process for delivery and ensure that the consultant has the right experience.
  3. Review technical capabilities. Whether you’re buying financial, waste disposal or even logistical advice, ensure that the consultants are specialists with the technical capabilities needed to deliver. This may mean that you are required to use a different provider for each project.
  4. Consider using a specialist framework for complex service procurement needs. Framework providers operate under strict due diligence rules and processes so you’re assured of the suppliers’ capabilities.   

Sheena Kocherhans is Category Manager for Professional Services at ESPO

Is Marketing A Procurement Blind Spot?

If your marketing expertise is a little below par, don’t despair! Marketers need your help and luckily there’s a lot procurement can do…

How much do you know about ATL, BTL and TTL? Learning marketing speak is the first step in gaining support of your colleagues over the fence and establishing your credibility.

The marketing services category has always been complex one and a bit of a blind spot for procurement. The learning curve is not only steep, it’s also a moving target. We have to invest considerable time in understanding their issues and concerns before we can provide any meaningful assistance. Category managers need to continuously build and refresh internal relationships at all levels; this requires perseverance, patience and stamina. Procurement veterans are fully aware of stakeholder expectations and the importance of having rock-solid relationships with marketing professionals before launching any sourcing projects.

Problems in sourcing marketing services

  • The decision makers may have entrenched relationships with advertising agencies and media houses, with or without formal contracts
  • There are often too many suppliers for the same or similar services and purchasing outside contracts is commonplace.
  • There may be little focus on achieving value for money or measuring effectiveness of the use of their limited budget.
  • Negotiation skills may be in short supply
  • Pricing models are less than transparent. Traditional agencies have pricing structures that would test the analytical skills of the best procurement professional.   

Some good news

On the upside, there is increased pressure on marketing departments to do more with less budget and they need procurement’s help, especially getting better value for money and formalising supply arrangements.

CMOs are becoming increasingly aware of the need to competitively source suppliers periodically, even if their main objective is to generate new and innovative ideas, rather than make cost savings.

Advertising agencies in their traditional form are disappearing; integrated marketing agencies are offering full-service solutions for all marketing requirements including strategy, brand management, advertising, media buying and the full range of digital and social media services. This is a real opportunity for procurement.

Where procurement can add value

Procurement is advised to pick its battles carefully, working from a firm factual base. The basic principles of spend analysis apply: collect and analyse all the data and know the landscape before tackling your target areas

Benchmarking

  • Develop a skills benchmark for each type of service. Establish what sets of skills are needed and determine fair rates for each
  • Apply supply market intelligence to determine the financial competitiveness of existing suppliers. Evaluate their rate cards and pricing against the market. Are they competitive?

Review existing supplier relationships

  • Identify incentives to improve relationships with incumbent marketing suppliers, and consolidate the supply base
  • Negotiate and improve unsuitable contractual terms and conditions, adjust pricing models and rates in line with benchmarks

Pricing of services

Many agencies use the tried-and-tested approach of consultants: billing is based on time-plus-expenses also erroneously called cost-plus. This is an open-ended billing system based on rate cards that apply hourly or daily rates per each skill level. Problems occur when lower skills are applied to the job while higher rates are billed. Where the scope of work is unclear or subject to change it can work but a cap should be set with only a small percentage  overrun of the budget allowed. Beware scope creep.

It is crucial to gain an understanding of other fees and mark-ups such as media commissions, margins on production costs and printing costs.   Where do rebates end up?

Measuring supplier performance

Managing supplier relationships with marketing firms needs to be focused on minimising bad behaviours and rewarding and incentivising those who deliver as per pre-defined requirements. Marketing departments may not necessarily have targets for upholding quality, reducing costs and measuring process improvements, procurement teams certainly do.

5 Top tips for getting along with marketing

  1. Understand important marketing concepts and terminology and recognize how marketing decisions support the company’s objectives.
  2. Invest time in building relationships and understanding the day-to-day challenges. Category managers should reassure marketing teams that they understand the value of strong relationships with creative agencies.
  3. Pick your battles. Identify areas that procurement can really influence
  4. Know your stuff – drill down into the data and understand the detail so that you can discuss issues intelligently
  5. Procurement should share stories of how they helped other functions in the business in ways that Marketing can relate to. Find ways to translate sourcing ideas into their language.

The ability to tactfully handle supplier/marketing/procurement relationships is the key to success. There are no secret tricks, just applying sourcing and contracting best practices will pay off provided that you prioritise service and performance standards over cost savings.

Do you want to be embraced warmly by marketing?   Know your numbers, respect their skills and ideas and work together to develop solutions that will work for both functions. Many marketing functions trundle along with little or no support from procurement.

Whose fault is that?