Tag Archives: trust

Three Reasons Why Procurement Has A Beautiful Future

Why should you be excited about procurement’s future? Three experts weigh in as we close out 2020 and look forward to a new year.


Now is the perfect time to be in procurement.

Think about it – when have we ever enjoyed so much trust, influence, and freedom to make changes?

We asked three experts why they’re excited about procurement’s future.

We can protect our companies 

Procurement is finally shedding its image as a support function. Now the c-suite is learning how much strategic value we can add.

Just ask Dr. Jonnie Penn, an artificial intelligence expert at the University of Cambridge and keynote speaker at the 2020 Big Ideas Summit.

He says the last 40 years of supply chain management were characterised by a push for efficiency.

“We see now that that’s too fragile a metric amid deglobalisation,” Penn says. 

“You need to start to incorporate other measures that give you security in the resilience of your system. 

“In the past you might have made a push for weekly or monthly planning. We’re now looking at a shift to continuous planning.” 

That puts supply chain management forward strategic leaders, able to prevent future disruption.

And the c-suite desperately needs that help.

Just look at one pharmaceutical CEO, who predicts the industry will move from global supply chains to more localised providers.

You have the opportunity to use data in a similar way to improve resilience.

But you might have to think about the way you see data, says Penn.

Great data meets three criteria:

  • Real-time
  • Structured in a way that’s easy to consolidate
  • Combines information from lots of different areas

Penn calls this ‘thick’ data, “which means that as opposed to just hiring let’s say a data scientist to crunch your numbers you’re also bringing in remote sensor engineers or ethnographers, sociologists.”

Those different perspectives are crucial to finding the best solutions.

We can drive innovation  

And that includes collaborating with your suppliers. 

Just look at Apple.

When Steve Jobs unveiled the first iPhone in 2007, the screen was plastic.

Yet the next day, Jobs noticed the screen was covered in scratches and called his VP of Operations, Jeff Williams, demanding a glass screen for the official release.

Williams said it couldn’t be done in just six months. Every glass prototype they tried had smashed, and it would take years to create a shatter-resistant, thin glass.

But Jobs insisted.

So Williams worked with speciality manufacturing company Corning to create damage-resistant Gorilla Glass in time for the launch.

Now every smartphone in the world uses Gorilla Glass.

It’s interesting to note Williams joined Apple as Head of Worldwide Procurement. He’s now COO and tipped to replace CEO Tim Cook someday.

That proves procurement teams can meet specific business needs by working with suppliers to innovate, says Dr. Marcell Vollmer, Partner and Director at Boston Consulting Group

He says every procurement function of the future will drive supply innovations – including saving our environment.

Dr. Penn agrees. 

“To go it alone is just not sustainable,” Penn says. “You need to look at building common frameworks and using standardisation.”

And that includes sustainability.

We can save our environment

After all, Penn cites McKinsey research that 80% of greenhouse gas emissions and 90% of the impact on biodiversity come from the way supply chains are managed.

Depressing, right? It’s actually great news. It means we can have a huge influence on creating a sustainable supply chain – together.

Penn uses the example of the 240 million packages sent daily. Of that, 40% is dead space.

But new technology can scan each object and use optimal packaging. 

“That means that you can reduce the 40% air and ultimately all the derivative effects, down the supply chain of the plastic use and shipping and storage requirements.”

Another example is monitoring factory emissions in real time by combining satellite imagery with machine learning.

Clearly, there are countless ways supply chain professionals can make the planet better, says Supply Chain Revolution CEO Sheri Hinish.

“Supply chains are the conduit for building a better world; designing a better world,” Hinish says.

“We can come from different backgrounds, different parts of the world but at our core, we fundamentally want the same things. 

“So, it’s real and when you think about collaborating within a global context… this is what wakes me up every morning – to create a world that’s bearable, viable and equitable.”

Our beautiful future

That’s why all three of our experts say procurement has a beautiful future.

Combine your skills with technology advancements, and you’ll have endless opportunities to lead significant change.

And if that seems daunting, don’t worry; you’ve got experts on your side.

“Feel free to be in touch as you develop your data strategy and your AI strategy to accomplish your sustainability and resilience goals, says Dr. Penn.

How To Be A Supernormal Leader

Collaboration is imperative for your organisation to progress! And it can be achieved through “silo busting” (encouraging inter-departmental sharing of knowledge), building and valuing trust, attenuating body language to communicate openness, promoting diversity, cultivating self-awareness and fostering empathy, and creating a safe environment for sharing ideas and practices.


Collaboration is more important than ever before. In fact, an organisation’s survival may depend on how well it can combine the potential of its people as well as its suppliers. By connecting the external market with their own organisation and its customers, Procurement has the opportunity to facilitate and deliver significant shared value. Collaboration matters like never before.

I’ve read many surveys on leadership and collaboration, particularly of recency. Deloitte’s Future of Work research found that 65% of the C-Level executives surveyed have a strategic objective to transform their organisation’s culture, with a focus on connectivity, communication and collaboration.

When one gets underneath the surface of these surveys, six crucial leadership behavioural themes leap out. I’m referring to leadership at all levels, call it strategic leadership if you so choose. Whether you’re the Chief Procurement Officer, the Head of Category Management or the Buyer, when you think about building and embracing a collaborative culture, you already realise that your job has changed. I really don’t think and hope you’ll ever look back. So, this is absolutely not about old-school leadership and hierarchical thinking. This is also not a new leadership philosophy. This is about embracing the fact that we are better together. A single, collaborative eco-system. To make the impact required and to inspire others, requires collaborative leadership. It’s about self-awareness and its about emotional intelligence too.

Here are the six leadership behaviours:

1. Silo ‘busting’

I really struggle with the word ‘silo’. It is why wastebaskets were created. Silo’s are sizeable organisational blockers, built to last by those whom create them. The collaborative environment we seek is kept from forming. The creativity, innovation and growth potential is essentially being silo distanced. ‘Silo’ is a term that has been passed around and discussed in boardrooms for at least 30 years. They remain a growing pain in the organisational backside.

Silo mentality describes the mindset present when departments don’t share information. Wherever it’s spotted, silo mentality becomes synonymous with power struggles and fear of exposure or failure. Silo mentality cause organisations to waste time, resources and money. They wreck collaboration.

Silos get busted by leaders, not by technology or processes. Procurement has privileged access to typically all parts of an organisation and its supplier base too. Get on the front foot and create unifying goals and objectives. Build ‘silo-busting’ into your balance scorecard and set the pace for collaboration, both internally and externally.

2. Trust matters

A collaborative team isn’t a group of people working together. It’s a group of people working together who trust each other. They also understand their own and each others’ strengths and weaknesses. Trust is the key binding agent for collaboration. It is where procurement and the supplier base can also unite, like never before.

As a leader, you need people to trust you. But how do you show that you trust them? The way sharing of information is communicated determines whether it becomes an obstacle to or an enabler of collaboration. Perhaps a cynical view, though some leaders I have observed who profess to value collaboration, undermine their effectiveness by withholding information or sharing it on a ‘needs to know’ basis. This makes them feel important.

Leaders build trust through honest, consistent and transparent communication – easy to say, often trickier in reality than it sounds. Procurement leaders take note. Put the ego to one side and build trust with your colleagues, customers and suppliers. It’s hard work and unanswerably essential to achieve true collaboration leadership. What one finds is that when you take the time to get to know your colleagues and suppliers, trust builds faster. Embrace all feedback, not just positive, and always have your learning and listening chips switched on. Build joint goals. Create the time to celebrate successes. Adapt, learn and grow, together.

3. Body language tells its own story

Negotiators are taught how to assess body language. Not just negotiators I hasten to add. In its most simplistic form, there are two sets of body language. One set that projects sincerity, authenticity and warmth. The other send signals of status and influence. For collaboration to flourish, focus your energy on the former. Authenticity is key. Be yourself.

4. Promoting diversity

Diverse thinking is an essential ingredient for collaborative leadership. It reinforces my point about leadership at al levels. Team members at the same level, and with a similar background, are found to perform worse than those with varying skills and knowledge. There’s a tendency for similarly minded individuals at the same level in an organisation to seek affirmation from one another i.e. they tend to reinforce each others predisposition. Innovation is triggered by cross-functional working. Creative breakthroughs occur most often when ideas collide and then combine. Collaboration enables innovation.

5. Self-awareness

Development Dimensions International (DDI) has studied leadership for almost fifty years. In their latest research, with over 15,000 leaders from more than 300 organisations, DDI looked at leaders’ conversational skills that had the highest impact on overall performance. At the very top of the list was empathy – specifically, the ability to listen and respond empathetically. Learn to understand before be understood. So, for great collaborative leadership, if you recognise this as a development need, then work hard on developing it.

6. Primal instincts

Human beings have two primitive instincts that guide a willingness to collaborate — or not — and they are triggered under very different circumstance. The first instinct is to hoard and has been traced back to early humans hoarding vital supplies, like food, out of fear of not having enough. The more they put away, the safer they felt. We’ve all observed this instinct and many experienced it of recency. In the workplace, when people feel ignored or threatened, they retreat and hold on to knowledge. The second instinct, on the other hand, is that humans are also a learning, teaching, knowledge-sharing species. According to evolutional psychologists, this trait is also hard-wired, linking back to when humans first started gathering in clans. Leaders trigger the ‘sharing instinct’ when they create psychologically safe workplace environments in which people feel secure, valued and trusted.

In a world of arguably unprecedented uncertainty and disruption, collaborative leadership behaviours are so important to organisation survival, recovery and growth. Collaboration as a skill set is no longer a ‘nice to have’. There are tools and techniques to help develop your collaborative skill set further, whether you are a buyer or seller. Successful supplier and procurement collaboration will make a transformational difference.

This article was originally published by Procurement Potential on July 12 2020 and is republished here with permission.

3 Mistakes That Will Destroy Trust Between Procurement And Suppliers

As you’ll  know from your personal life, the most loyal friendships are earned through  experiences, challenges, and good times. So why should be any different with your suppliers?

If you have a vendor who constantly demonstrates great performance and continues to deliver and deliver and deliver…reward them! Give them extra projects or new developments and more business. Don’t continue to pressure them and penalise them, because this relationship might erode over time. Perhaps it could still functional and transactions will happen, but the relationship will be affected as a result.

Here I have collected three typical mistakes that will destroy trust between a procurement organisation and its suppliers.

1. Empty Threats

“Be constructive in your arguments and honest in your feedback…”

This was one of the first lessons I learned from a mentor when I asked about contract negotiations. It’s simple but powerful and it genuinely creates trust.

If you are bluffing –a professional partner will recognise it. And you want to work with professionals, right?

Walk the talk. If you’re claiming that a supplier is offering a better price – be able to prove it.

Making empty threats is either the result of a lack of preparation  or a lack of any decent arguments full stop.

Remember that trust is the base for a good partnership. And fake promises can easily destroy trust.

2.  Continue negotiations after contracts are signed

I have to confess that I’ve done this many times in my procurement career so I understand how harmful it can be.

There is an unwritten rule for sales people that states you should stop selling after the client has agreed to a deal.

The very same  rule should be applied to procurement professionals. We should have the ambition to reach the best deal within our budget and time limits, we should consider risks and potential threats but all of this should happen before we agree the final contract. After the two parties agree prices, terms and conditions of contract, everyone should concentrate on execution.

Normally we set certain deadlines for the supplier selection process and close to these deadlines we can become more and more stressed, losing focus and failing to mention  important details or opportunities. As a result we often finalise the agreement not because we are sure that this is the best deal, but because we are short of time.  And then, after the documents are signed, we attempt to save costs further with the vendor.

Procurement professionals must act professionally in such situations. Simply opening up new negotiations with the vendor will destroy trust, sending the signal that the agreement means nothing to you and that you’ll happily switch to a better alternative whenever you get the chance. As a result, they will also de-prioritise you as a customer and not invest the time and efforts into developing your products.

If you see an opportunity to decrease prices after the contract is signed,  be open and transparent to your vendor. Explain your reasons set the arena for a new discussion and listen carefully. With any luck you can find a solution that suits you both.

3.  Focusing only on price reductions

I like to explore competition in Procurement! Preparing a good RFQ/RFP process and making suppliers fight for your business is great isn’t it?

Doing this process a number of times within the same product group will definitely lead you to a dead end. You’ll reach a threshold where quotation will not bring more savings.  It’s a frustrating moment when there is no more low hanging fruit, no more chances to cut the prices by reverse auction or bidding processes. So now what?

In most cases the extra revenue can be gained in more ways than simply cutting your suppliers’ margin or increasing purchase volumes.

Look into the business relationship, the supply stream and the infrastructure of the business and investigate where we can save costs and do things better, faster and smarter. More often than not, if we really find this momentum and use it to reduce costs, we will get bigger volumes into this business. New projects will come and more development will happen if the relationship is strong and there is trust. This will also result in more revenue coming to both sides – it’s a win-win.