How can a few tips in the short term fundamentally change not just your long-term plans, but the way you plan altogether? Our Senior Advisor Helen Mackenzie writes.
Are you starting to plan for 2021 and what the next phase could be for your category or your team? Are you pondering what the future might hold and how to prepare?
Planning in time-horizon chunks, being in a “perpetual state of beta” and measuring your performance twice a week are just five of the ideas a group of senior US procurement leaders recommended for guiding your 2021 strategies at a recent Procurious Roundtable.
1. Time Horizon Chunks
Terence Mauri, founder of the Hack Future Lab urged us to think in time-horizon chunks. “Think about what’s probable for your business, suppliers and supply chains in the few next years? What could be plausible in a decade’s time? And then stretch that time horizon still further to envisage what could be possible in 20, 50 years’ time.”
2. Perpetual State of Beta
Mauri believes that our default mode of operation needs to be “a perpetual state of beta”. Referring the 4-24 Project, a movement seeking to encourage a questioning mindset, Mauri issued a challenge, “What’s the bravest question you can ask right now?” Could we start to prepare effectively for the post-Covid world by asking:
· why are procurement processes complex not simple?
· what do our stakeholders really need from us?
· can we collaborate with our suppliers in a more effective way and build trust?
But being more disruptive in our thinking requires practical application on the ground. And that’s where insight from Alex Saric, Ivalua’s Chief Marketing Officer at the Roundtable was invaluable.
3. Measure what Matters
“If we measure what matters”, advised Saric “that means we won’t let near term pressure derail long term direction.” He cited evidence from research undertaken by Ivalua and Forrester earlier in 2020 to prove his point:
The majority of high performing procurement organisations measure key performance indicators twice a week.
Not once a month, not quarterly, but bi-weekly. And the reason is that those KPIs are used to measure success and – importantly – to course correct when targets linked to long term direction aren’t being achieved. A great way to operate whether the pandemic is with us or not.
4. Strategic Not Tactical
And thinking about the way ahead, forward-thinking CPO Gareth Hughes from UK based Whistl, urged us to put the strategic, rather than the tactical, at the heart of our team structure. Gareth’s version of the perpetual state of beta is to dispense with category management, and “do the procurement that the business needs”.
By deploying a team with commercial focus, a curious nature and fine-tuned stakeholder engagement skills. Hughes urged CPOs to stay strategic, “Measurement needs to focus on commercial outcomes and increasing speed.”…
People remember you for the 80% of things you do well so make sure they’re the things that matter!
5. Promote and Measure Diversity
And keeping the focus on teams and people, our final speaker Naseem Malik, urged a focus on promoting and measuring diversity as a way to demonstrate procurement’s value post-covid.
Observing that procurement and supply chain continues to have the C-Suite’s full attention Malik urged CPOs to “Leverage your team’s supplier diversity expertise to help guide your organisation’s wider diversity efforts”. And, of course, measure the impact.
So preparing and navigating through the post covid period may be more a question of how we do it, rather than what we do. And whether it’s the quest for the perpetual state of beta, high performance or being more diverse, the key as always is to measure it and to measure what matters.
If you would like to find out more about Procurious Roundtables and the 2021 program email [email protected]
Classifying your spend data? A big waste of time, surely … or a crucial step that needs to be taken without delay? The Classification Guru Susan Walsh explains why this needs to happen immediately.
So, picture the scene: it’s budget time and as far as you can see everything is under control, the bottom-line balances out, you’re in the black and life is good. But, are you really getting the full picture? You’ll never know unless you accurately classify your spend data.
You may already be thinking about it; or can’t justify the time or resources; or it might be something that you think is just a complete waste of time or money. Let me tell you why it isn’t, and you should have your spend data classified as soon as possible…
First things first, there’s that full picture I mentioned. If you’re only using your General Ledger codes, I can guarantee that they are wrong! Now, I know that’s a bold claim, but it is based on years of experience of working with GL codes. More often than not they’re used by people who don’t necessarily understand or know what they’re logging or the importance of accuracy. The result? Items logged under random GL codes.
Now, have a think about your department budgets: Karen in marketing’s maxed hers out, but she’s just placed an order for 5000 new leaflets to be printed. How? In my experience, it’s been snuck into someone else’s budget. Think about marketing and sales, would an order for 5000 leaflets really look out of place in a sales budget? Probably not, unless you look a bit closer. And this means you’re not really getting a true picture of what’s going on at ground level or what you might need for specific areas of your business. You can’t increase the marketing budget if you don’t know they’re spending it all.
We also, unfortunately, need to mention the possibility of fraud or embezzlement. It’s not pleasant to talk about and no one wants to think the worst of their staff or suppliers, but it can and does happen. Someone may have tried to mislead or take advantage of you in some way and if the spend data is messy or they’ve been clever it can be very difficult to spot. This is why it is also a very good idea to have an external party look over it, because then nobody has a vested interest in hiding what’s in the data – they’re just classifying it!
Now, I’m not saying it is a quick and simple process, good classification can take weeks and weeks … and weeks! But it’s worth the wait when you get back your brand new, shiny data set with all this new and organised information. Then you’ll probably say to me, what do I do with this now?
Well, the first thing you do is actually look at what you really spend your money on and find out if you could or should be negotiating better rates with your suppliers because the data’s shown you’re actually spending a lot more than you thought you were or have been automatically accepting price increase when there’s much better deals out there!
Then once you’ve done that, you’ll probably want to review your processes because, as I said before, I can almost guarantee something will have been flagged up during the classification process which indicates spend isn’t being accurately logged.
Ultimately, it’s all about saving you money and that’s no bad thing for anybody. Now, more than ever, it is so important you know where your businesses’ money is being spent and I am sure every single person who has their spend data classified will find at least one hidden surprise – like a data Kinder Egg! (Sorry my American friends, they’re not banned in the UK!)
So, although you may be put off by the upfront cost of having your spend data classified, it will save you money in the long run and the benefits to your business are pretty massive.
During times of uncertainty, you need to make yourself stand out to help you keep your job. This is where your CIPS membership is worth its weight in gold.
If you are one of the over 200,000 procurement professionals globally with a CIPS membership, the chances are high that you are studying, or have studied, towards your MCIPS qualification. You may even have started your chartership journey through Continuous Professional Development (CPD). As said previously, there are great benefits available to those who are lucky enough to be in this position.
There will come a time in your career where holding these qualifications will prove even more valuable than before. In times of uncertainty, either globally or even just for your organisation, belts will be tightened, and headcounts will be reduced.
And your FCIPS, MCIPS and/or Chartership could be the means by which you weather the storm.
Can qualifications help me keep my job?
As procurement and supply chain follow other professions down the route of chartership, qualifications will increasingly be sought and expected by employers and CPOs. There is an expectation in role development that procurement professionals will have, or at very least be studying towards, these qualifications.
Leaders of the profession both expect and are expected to have MCIPS and will look to build teams in this image. When it comes to times of turmoil, not having qualifications may result in you being the one without a chair when the music stops.
How, then, can the time and effort put into your exams and CPD help you be the one to hold on to your job? Here are our five top reasons.
1.A willingness to learn
When it comes to your qualifications and job, it’s not enough to settle with what you have and where you are. Your CIPS membership and CPD show your organisation that you are invested in your career and have a keenness to better yourself and keep working.
Your willingness to put in extra time and effort to earn and keep these qualifications is not only a benefit to you, but to your organisation too. Not only that, but self-study and CPD show you can direct yourself independently, something that will be noticed by your managers and may be important when it comes to that next round of promotions or cuts.
2.Up to date knowledge and training
Earning your qualifications based on specific exam-based knowledge is one thing, but subsequently keeping that knowledge up to date is something else entirely. Your CIPS membership, complete with its numerous sources of information and learning, is a great way to ensure that your knowledge is always on point.
You will continue to learn new skills, and understand key industry trends and requirements in the wider procurement profession. You can then bring this new knowledge and concepts back to your organisation, helping to keep it up to date, and potentially even providing it with a competitive advantage.
3.Show yourself as a committed professional
Organisations continue to recognise the importance of professional qualifications, CPD and networking for their procurement teams. For those who are wanting to undertake further studies, organisations are increasingly aiding this by choosing to invest in their employees’ studies.
However, beyond the monetary investment, organisations will recognise your commitment to them and procurement as a career by choosing to further your studies. Those people who don’t go down this route may not be seen as committed in the same way, which could count against them in the future.
4.Part of a community and network
An important part of expanding our own sphere of knowledge is networking with peers and collaborating in procurement-led, highly interactive communities, like CIPS and Procurious. Information from textbooks can help provide a foundation, but the real benefit to you and your organisation comes from understanding what has been successful in the real world.
With a global membership of over 200,000 procurement and supply chain professionals, the CIPS network is a cornucopia of ideas and knowledge. Being an active part in this network means you bring your learning, as well as ideas from others, into your organisation, increasing your value and future potential.
5.A strong future prospect
A willingness to learn and then keep that learning up to date. Commitment to your chosen profession and your organisation. A wealth of knowledge and experience at your fingertips. On top of this all, professional membership and qualifications. Having some of this will help your career; having all of it will mark you out as a strong future prospect in any organisation.
Your qualifications will open up new routes and job roles and ultimately make you a better candidate for promotion, rather than a candidate for headcount reduction.
While there are no guarantees that your CIPS membership will mean you keep your job, it provides a compelling case as to why it’s in the interests of your organisation to hold on to you and support your studies. With most organisations asking for MCIPS for new roles and recruitment, you would question why you wouldn’t study towards it given the opportunity. It’s the start of the journey to a long, and hopefully prosperous, career in procurement.
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:
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.
With digitisation focused on Operational and Tactical aspects of function, and the next wave predicted to focus on technology that enables Strategic work, what are the implications for our future Category Manager’s skillset? Gregory Romney shares his expertise.
In a recent post, I made the observation that in large part the Procurement digitisation that has happened over the years has been focused on the Operational and Tactical aspects of the function (i.e. Buying, Sourcing). I also made the prediction that the next wave of Procurement digitisation will be more focused on technology that enables the Strategic work that organisations still struggle to prioritise. If I’m right, this will have significant implications on the skills that will be required to be successful in the role of a Category Manager and poses a fundamental question:
What is the future role of a Category Manager and what skills will be most important?
I’m not sure the answer to this question really differs all that much from what we would see on most aspirational job descriptions today, however, there won’t be any room for compromise. Future success in the Category Manager role will be dependent on the ability to closely mirror the skillsets of 3 roles: Strategist, Advisor, and Broker.
Similar to a game of chess, a strategist has a well defined plan in where he/she knows the the steps necessary to win the game, or in this case to bring the most value to the organisation both from a traditional bottom-line perspective, but top-line as well. As a Strategist, deep understanding of strategic frameworks will be required and their practical application for the category the CM supports. Additionally, sharpened data analytics capabilities will be increasingly important. However, the most important skill the Strategist will have is the ability to interpret the analysis, “connect the dots”, and then effectively communicate this internally to key Business Partners & Stakeholders. This leads me to role #2.
I recently read the book The Trusted Advisor by Robert M. Galford and it expounds upon 3 core skills that are key to becoming an Advisor: earning trust, giving advice effectively, and building relationships. I believe it sums up perfectly how to transition from playing the Strategist role to the Advisor role. The activity of “advising” may sound more familiar when you use it in the context of engagement with internal Business Partners. According to a study conducted by CAPS Research, only 24% of organisations consider their advisement or engagement Strategic, meaning it is highly collaborative and proactive, there are shared dashboards between Procurement and the Business Group they support, as well as aligned metrics. Despite such a low percentage of Strategic engagement, the study did find that 72% of engagement was Transitional, meaning engagement was increasing, and Business Partners were engaged with the category strategy. This certainly is a positive trend. The reason I believe achievement of Strategic engagement or advisement with our Business Partners is still so low is due to the fact that this work looks very different from the Tactical and/or Operational work that Procurement teams have been tasked with managing historically. However, if we are able to make the transition to “Advisor” successful, it will open the door to significant opportunities that Procurement is already well-suited to help deliver due to role #3.
Most Category Managers play this role decently today and in most cases have sufficient skills to broker deals between the company he/she represents and its suppliers. We have tools and well-defined processes to help us in this role, however, most of the deals that CM’s are brokering today are focused heavily on delivering value in form of cost reduction and less in the form of supplier innovation that can impact the top-line. In order to capture this form of value from the supplier base, a Broker needs to truly be willing to learn from the supply market and foster an environment within his/her own organisation so that they are prepared not only to receive, but act upon the supplier-led innovation. The skillset required in this type of deal brokering is different from what we have traditionally done when playing this role and so will the tools that we leverage to enable this activity (hint: eSourcing will not be the optimal tool from the toolkit for this kind of brokering). A perfect example of this is found in the recent announcement from Coca-Cola European Partners (CCEP) in regards to the introduction of CanCollar, a sustainable paperboard packaging solution, for multipack cans in Spain. Through collaboration with its packaging supplier WestRock, the company projects that the new solution will save more than 18 tonnes of plastic annually and has invested €2.6 million in its Barcelona plant in order to support the initiative. Hats off to the Procurement team that I’m sure was intimately involved in brokering this deal!
As I mentioned earlier, these roles at face value are not a drastic shift from what Category Managers are being asked to play today, but if we are honest with ourselves and the members our organisations, there are very few that excel in one let alone all three. This is the capability gap that Procurement faces and in a parallel there is a Technology gap to help enable it, both of which will require an overhaul across a myriad of current mindsets, practices, and investments.
This is why I predict the future wave of digitisation will be focused on empowering the Procurement function across these 3 roles and I’m confident that the function, as well as the supply market, will rise to the occasion and make the necessary changes to address these gaps. In doing so, I’m hopeful Procurement will become a profession of choice not mishap.
Agree? Disagree? Please share and let me know your thoughts in the comments section!
What are the essential skills you need to possess or develop if you want to become one of tomorrow’s supply chain leaders? Is it enough to have a business-related degree and a little supply chain experience, or is supply chain leadership a vocation for which you must work hard to acquire specific qualities?Rob O’Byrne from The Logistics Bureau shares his expert advice.
In reality, it’s probably a little bit of both. Indeed, many elements of supply chain leadership can’t effectively be learned through academic channels alone.
In any case, an excellent place to start is by knowing what the most vital supply chain leaders’ skills are and, of course, why you need them.
That’s what you’ll find in this article, so you can check which essential skills you already have, and which ones you might wish to enhance with some pragmatic supply chain education.
These Are the 7 Supply Chain Leaders’ Skills You’ll Really Need
1. Information Technology and Automation Knowledge
Before getting into this first section proper, I want to make one essential point, which I’ll expand on later in this article. Supply chain leadership is all about people using technology as a tool. Nothing is more important than working on your people skills if you want to be a successful supply chain leader.
Nevertheless, few supply chains run successfully today without the support of sophisticated technology tools, like warehouse management and enterprise resource planning (ERP) systems. For that reason, you need at least a modicum of IT understanding to work in a supply chain environment, particularly if you intend holding a leadership position.
To be a supply chain leader, you will need to be familiar with the use of enterprise software applications like WMS, TMS, and ERP, not to mention analytics software, which is increasingly becoming a staple source of leadership decision support.
Enterprise IT Skills at User-level
There was a time when supply chain leaders could rely on subordinate employees to do the hands-on work with business information systems, and be content to receive reports and Excel spreadsheets containing data for decision-making.
Those days are gone, however. Today you’re expected to find your way around the modules of your company’s ERP and business intelligence applications on your own. Furthermore, your need for technology understanding extends beyond hands-on use.
Understand IT as a Buyer
As a supply chain leader, your input into IT procurement will be crucial, and you must know enough about your company’s technology needs to discuss them with vendors. You’ll need to understand the relationship between ERP workflows and physical processes, for instance, to help prevent classic mistakes from being made, such as applying new technology to outdated, inefficient processes.
It will help if you know automation technology, too, since more and more companies are applying automation in distribution centres and warehouses.
Ultimately, strong interpersonal skills still trump technological expertise as a supply chain leader’s forte. However, a career at the head of your company’s supply chain is not one to consider if you don’t have some affinity for technology and its application in business.
2. A Grasp of Economics and Market Dynamics
The supply chain world is changing rapidly and sometimes unpredictably, in line with the market dynamics across many industries, all of which are being affected by rapid shifts in customer and consumer buying-behaviour.
Many markets that used to be purely local or regional have become global, as have the supply chains that serve them. As a supply chain leader, you will need to focus on what lies ahead and, to some extent, predict it. That can only be possible with a thorough understanding of the market dynamics relating to your industry and your company.
Of course, each industry and the niches within them are subject to unique and specific market dynamics. Supply chain leaders can work in any industry as long as they know their stuff, but this does mean that a change of employer can require some in-depth study, especially if the market is unfamiliar.
As a basis to quickly adjust to supply chain career moves, it will help a lot to be familiar with economics’ basic concepts.
To see ahead and lead a supply chain team effectively, you’ll need to understand what drives demand, supply, and pricing for the goods and services provided by your organisation and its competitors. These forces impact a variety of supply chain management elements, including the cost of goods sold and the cost to serve your company’s customers.
3. Understanding Cost-to-serve
Supply chain leaders play a very active role in the profitability of their employing companies. If you’re running a supply chain operation, your decisions impact the costs involved in supplying your organisation’s customers.
You will have a huge advantage and the potential to shine as a leader if you can quantify how your supply chain leadership decisions affect your bottom line. For instance, too few companies focus on the real costs involved with serving customers.
The result of this inattention is often a one-size-fits-all approach to service, inevitably leading to the over-servicing of some customers and the under-servicing of others. A single service offering can even impair profitability, perhaps creating a situation where logistics costs cause some sales to generate losses instead of profits.
If you understand the cost-to-serve concept and can apply it to your company’s supply chain activity, you’ll be able to identify unprofitable customers and products.
By developing a thorough cost-to-serve understanding, you’ll even be able to make decisions that improve the profitability of those customers and products instead of taking knee-jerk measures to cut losses.
Every company wants supply chain leaders who can make direct and positive impacts on the bottom line—but not every company has such leaders. That’s why familiarity with cost-to-serve is one skill that can help you stand out as a competent supply chain professional.
4. The Skill of Flexibility
The one thing you won’t find on this list of supply chain leaders’ “must-have” skills is innovation. You don’t have to be an innovator to be an outstanding supply chain leader, but you do have to support and drive innovation. Flexibility is the skill that will help you to do that.
Flexibility gives you the ability to let others do the innovative thinking. Your flexibility will give those creative thinkers the confidence to present their ideas, since they know that you will adopt them if it makes sense to do so.
Flexibility will keep you from feeling too comfortable in the status quo ever to let it go. Flexibility will ensure that change (often termed the only constant in supply chain management) will not faze you or cause you undue stress. In turn, your team will be encouraged to embrace, rather than resist, change.
Flexibility is one of the soft skills that differentiate successful supply chain leaders. That’s not only because of the changing nature of supply chain operations, but also because things don’t always go to plan—far from it if truth be told.
For example, during supply chain improvement projects, it’s not uncommon for things to crop up, requiring plans to be changed. An inflexible leader may doggedly try to drive through with the original strategy, becoming ever more frustrated in the process and hampering, rather than helping the situation.
Inflexibility often manifests in the belief that changing a plan is an admission of poor planning, but in many cases, that is an erroneous presumption.
Don’t fall into this trap. Work on your flexibility as a leader. Accept that plans should always be work-in-progress, and adapt your approach when required. You can’t plan for every eventuality, and while flexibility is a virtue for supply chain leaders in general, it’s an absolute essential in project management.
5. Project Management Skills
Aside from flexibility, there are many other project-management skills that you’ll need as a supply chain leader. Of course, a lot depends on what leadership role you are in, but if you are headed to the top, you’ll probably hold several management positions on the way up, most of which will see you leading projects from time to time.
If you make it to the C-suite or, indeed, to any senior leadership position, it will help you and your managers do a better job if you understand the fundamental principles, pitfalls, and challenges inherent in project management.
The most crucial project management skills to acquire as a supply chain leader are as follows:
The ability to negotiate successfully for resources, budgets, and schedules
A high degree of personal organisation
A proactive approach to risk management
Of course, the above-noted skills are also valuable for supply chain leaders generally, not just as part of a project-management skill set. I’ve simply noted them here because they are the carry-over skills most likely required in a supply chain leadership role. To elaborate:
Personal organisation will be vital for keeping track of numerous projects for which you are likely to be a sponsor and meeting your obligations toward them.
You may sometimes be called upon to support project business cases, hence the need for negotiation skills.
When deciding if you’ll approve a requested project, knowledge of risk management will help you ask the right questions about the proposal and business case.
6. The Ability to Get the Best from People
So how about those people skills I briefly mentioned earlier?
I can’t put it any more plainly: the ability to lead, manage, influence, and inspire other people is the number one fundamental, essential skill that all supply chain leaders and managers should possess.
It is entirely possible to learn the necessary skills, but a word of caution is due. If you don’t enjoy team building and developing professional relationships with lots—and I do mean lots—of other people, don’t choose a supply chain leadership career.
On the other hand, if you love working with people but just don’t see yourself as a great leader, you probably have exactly the right mindset to succeed in a supply chain leader’s role.
There is nothing wrong with being self-critical, as long as you have the will to learn what you need to learn, and the energy to commit to your personal development. Being passionate about teamwork and enjoying interactions with others is half the battle in succeeding as a supply chain leader.
The 3 Cs of Supply Chain Leadership
Communication: First and foremost, you need to communicate well … to articulate sometimes complex concepts in a way that anyone within your company can understand, regardless of whether they have supply chain knowledge or not.
Dependent on whether your company operates internationally, you might benefit from communication skills that extend beyond your native language. It’s becoming ever more common for enterprises to give preference to bilingual or multilingual leadership candidates.
Collaboration: Secondly, you will need to be able to foster collaboration, a critical element in any modern supply chain.
It won’t always be easy, because sometimes you’ll be asking teams inside and outside of your business to collaborate and work together despite competing priorities and expectations. To ensure these parties collaborate, you’ll need to draw on communication, persuasion, and relationship building skills.
Change: Change management is another people skill in which you might wish to receive some special education or training. If you are planning to graduate from a role where you’ve been used to participating in, but not leading change efforts, experience alone may not be sufficient to help you take people through challenging changes. Resistance to change can be hard to overcome.
The impact of changes within your supply chain can affect employees on a very personal level. You’ll need to know how to empathise and to listen actively to what people are telling you. Without these skills, your leadership can quickly be rejected during periods of change, purely through fear of the unknown and a sense that you don’t appreciate employees’ concerns.
Get the Best From Yourself
Finally, while the need to interact effectively with other people might seem obvious, you shouldn’t neglect the development of the person most impacted by your skills and abilities—yourself.
Supply chain leaders should be able to conduct regular self-assessments and identify their areas of weakness.
We never stop learning and developing, but by having the ability to self-appraise your skills honestly, and work on those areas that need it, you can acquire new expertise at a rate that keeps pace with the ever-changing supply chain environment.
Getting the best from yourself also means having the ability to curb your ego. Learn to recognise when somebody else in your team exceeds your aptitude for a specific task or responsibility.
Let that individual take the lead, and be happy to follow and learn from her. Not only will that free you to play a part in which you can use your strengths, but you’ll also be empowering the other person and helping her to reach outside of her comfort zone.
7. The Know-How to Negotiate
As a modern supply chain leader, it won’t only be your reports and colleagues that you need to interact with effectively and skillfully, but also those outside your organization. Moreover, both internal and external interactions will often involve the need to negotiate.
Supply chain leaders must negotiate often, and even if you’re not doing so on a one-to-one basis, you’ll probably find yourself in scenarios where you’re part of a team of people trying to broker a deal or arrangement.
Negotiation Scenarios for Supply Chain Leaders
Some examples of possible negotiation situations that you might get involved in, and in many cases, lead, include:
Procurement of IT services and solutions
Contracts for logistics services
Brokering deals with product vendors (for direct or indirect supplies)
Putting together contracts or service level agreements with customers
Negotiations with employee groups or trade unions
Business merger/acquisition negotiations
Why do Negotiation Skills Matter?
Negotiations are typically transactional, but often take place between entities or teams engaged in long-term business relationships. Whether you are the lead or a mere participant in the negotiation, your skills will influence the transaction’s outcome and the trajectory of the broader relationship.
It’s easy to make mistakes during negotiations, but with relevant training and education, you can hone your skills to avoid some of the most common errors.
For example, skilled negotiators know that the process does not have winners or losers. They don’t go into a negotiation aiming to win as many concessions as possible, and they don’t feel that they have failed when they have to give ground to arrive at a settlement.
A win/lose type of attitude will lead to negotiating mistakes. Even if you come out of a negotiation feeling that you have won, you might find further down the line that your “win” has done nothing to strengthen what might be a vital partnership.
Mistakes that Skilled Negotiators Avoid
If you have developed your negotiation skills, you will always enter into discussions looking for an outcome that will satisfy both parties. You’ll also be able to avoid other common mistakes such as:
Failing to prepare by identifying what the deal-breakers are, which outcomes are essential, which ones are useful to achieve, and which ones don’t matter in any concrete way.
Asking only for as much as you expect… It is better to ask for more than you expect.
Modifying an offer you have made before getting a response to the original. It’s important to understand that the other party may use silence to bait you into relaxing your conditions.
Offering compromises before you have heard all the demands of the other party. By getting all the facts first, you can be selective in identifying where compromise may be possible.
Focusing too much on your party’s input and achievements. Strong negotiators pay close attention to the opposite party’s behaviours, ask plenty of questions, and take time to understand and analyse the answers.
How to Boost Your Supply Chain Leader’s Skills
Your business degree and/or hands-on experience in a supply chain role will undoubtedly help you gain and maintain a supply chain leader’s position in your current company—or in a new organisation if you should be planning a move.
However, supply chains have become so complicated that an extensive toolkit of required skills is required if you want to thrive and make a difference as a supply chain leader.
Some of the skills in that toolkit can be difficult to attain without many years of supply chain experience, simply because they are rarely taught outside of the workplace. Your best option might be a program of specialised supply chain and logistics education.
Our Supply Chain Secrets program, for example, was developed and designed by people who work in the industry. It can help you learn about each supply chain area pragmatically, using real-world problem-solving and relatable examples of commonly made mistakes—and methods to avoid them.
If you’ve read this blog post, perhaps you’ve been searching online for ways to enhance your supply chain leader’s skill set. If so, you don’t need to look much further. Join Supply Chain Secrets today, and access the skills you need to be a supply chain leader of tomorrow.
Ever been to a therapist and felt like they’ve read you like a book? Uncover their secrets in this article and harness your own superpowers. Got a big meeting or negotiation coming up? Learn how your adversaries and your team tick to make sure you stay in control.
My partner has a superpower.
When he opens the front door to a stranger he can tell what kind of day they’ve had, how they feel about themselves and what they think of him. He’s a therapist, and honing these skills day after day through years of human interaction have saved him (and his clients) hours of questions and warm up chit chat.
He can cut straight to the chase and use their shared time in the most effective way that meets their needs.
They often feel relieved, understood and grateful that they don’t have to take the first step of opening up and being vulnerable.
It gives him a steer on what tone he needs to take, what topics they may need to explore and what the weather is like in their emotional forecast.
A therapist has an arsenal of tools ready to deploy – this super quick scanning ability means he’s on the front foot and taking charge before he’s even said hello.
Master your own superpowers
The good news for procurement and supply chain pros around the world is that these skills can be learned. We’ve all seen the TedTalks and infographics reminding us of how much we communicate nonverbally through posture, eye contact and even vibes. A therapist’s superpower helps to demonstrate how much untapped potential there is in the way we hold ourselves and once you learn the signs, you can feel like a mind reader.
Imagine walking into a negotiation clocking every single person in the room based on the seats they’ve chosen to sit in, the set of their jaw, their gaze (fixed, nervous, darting around) and the colours they’re wearing. This includes your own team as well, it can help show who might need a bit of support, who’s at risk of spilling the beans and who might be the over-sharer.
Having the best negotiation plan in the history of procurement does not mitigate against the might of the ever unpredictable human being. We’re people, not machines and that means we can be unpredictable but paradoxically we will often have a billboard above our heads announcing our inner emotional state. We just need to learn to read the signs.
Experiment in your everyday life
Start practicing in your daily life by observing people around you. Look at how people hold themselves, their posture, their eyes, their energy levels, their expression when they’re talking to someone else. You can do this in the lift, on the bus, in conversation with a loved one and when you’re walking down the street. Observing people is not the same as judging, don’t make this mistake. It’s important that you are approaching this exercise from a place of detachment, objectivity and kindness.
David Attenborough ain’t got nothing on you
Once you’ve narrated your own nature documentary about humans you’ve stared at on the bus, then progress to unpack what they’re telling you nonverbally. Start to think about what the expressions might mean, what they could be communicating and what this means for you.
Posture: slouching, or intensely concentrating – furrowed brow, arms crossed
Look at the symbol beneath the gestures. Slouching conveys being relaxed but too relaxed comes across as unreliable. Concentrating can come across as angry which can put you in the box of “unapproachable” Arms crossed means the person is not buying in to what you’re saying or they feel defensive
The slouchy person can’t be relied on to win people over when the razzle dazzle is needed but would be good to talk to before you do a presentation to make sure you’re feeling relaxed
Fast talking and being overly friendly may indicate someone that feels the need to have everyone like them.
A people pleaser can be great for assisting with establishing connections and winning people over but they may not be best placed to head to head on the details or key issues.
The ultimate survival guide (we got you)
Follow these neutral gestures and postures to ensure you’re the cool, calm and collected procurement pro at all times.
Always sit up straight.
Relax your face and voice. A tip is to take a big breath, smile, put your tongue behind your top two teeth (and keeping your mouth closed) exhale gently but firmly, it’s a great way to calm yourself down on the spot.
If you’re a fidgeter, then restrict yourself to only one item on the table.
Maintain direct, but relaxed eye contact. If you smile it will soften your gaze.
Be comfortable in silence and don’t feel the need to fill the space.
Level up and feel the power!
Got a huge presentation or meeting to nail? Then lock in these two strategies from Forbes:
Power priming. Think of a past event where you were successful, recall this event and spend time in that feeling. Soaking yourself in this feeling means you can recall it when you need to.
Power pose. There is a lot of research that shows if you strike a particular pose like standing with your legs and arms wide open for 2 minutes, it will stimulate the hormone linked to power and dominance (testosterone).
Follow our body language hacks to ensure your negotiation or big event goes down as a winner.
Do you have any tried-and-true strategies? Comment below!
Many leaders had been looking forward to physically reconnecting with their teams for the first time, whom they may have only seen virtually for the last six months. However, the government’s recent announcement means this may now be delayed indefinitely.
It may have been hoped that a return to a form of ‘normality’ will signal an end of their leadership challenges, yet the recent setback means that managing their people is now the biggest concern.
Over the past two months, Tom Graham, a Consultant within Berwick Partners’ Procurement & Supply Chain practice has been speaking with Chief Procurement Officers across the globe, from a range of different sectors to discuss their leadership concerns during this next phase of the crisis. The discussions focused on the complication’s leaders may face as we enter the next stage of the crisis in addition to the part office-based, part-remote way of working at some stage in the future. Together, they discussed the concerns leaders have with re-engaging their teams, how management styles must change and the mental fall-out after a period of isolation, health and economical stress.
A remote/office combination
When I began to write this research piece, the focus had been on the partial return to the office. Yet the UK government’s recent announcement demonstrates how difficult it is for leaders to plan, manage, and motivate their teams.
Over the last six months, the word ‘unprecedented’ has often been used. From the discussions I’ve had it now looks increasingly likely that the long-term effects on leadership will also be unprecedented in scale.
THE IMPORTANCE OF LEADERSHIP
As the crisis roles on, the potential for team disengagement intensifies. CPOs are aware of how imperative it is that they are able to quickly re-engage with their teams, recognising that a lack of engagement could have major implications on the success of their future strategies. A recent report from McKinsey, “COVID-19 and the employee experience – How leaders seize the moment”, stated;
“Organizational responses are having a tangible impact on employees. Compared with respondents who are dissatisfied with their organizations’ responses, those who say their organizations have responded particularly well are four times more likely to be engaged and six times more likely to report a positive state of well-being”.
However, many leaders will find themselves in a challenging situation, needing to set a clear path of direction whilst not having all the answers to all their team’s questions.
One CPO explained the challenges they had faced with motivating a team who had experienced mental fatigue; a peer from a national retailer corroborated that their team has also sought answers and long-term reassurances which they cannot give, leading to a negative impact on employee motivation. McKinsey’s report states: “leaders need to help rattled workforces believe in the future”. One procurement leader believes that this should be one of their biggest concerns, as they look to strike the balance between keeping good practices in place, whilst adapting their approach as we enter a period of increased outbreaks. The combination of lockdown fatigue and a physical disconnect from an office and colleagues will, or may have already, accelerated disengagement. Leaders need to act swiftly to reconnect, re-engage and motivate a team which may have lost members, enthusiasm and direction.
Rebuilding employee loyalty, whilst not physically connected is a major concern for nearly all leaders. McKinsey’s report once again raised this point, “It would be a mistake to assume that the camaraderie that has sustained many employees early in the crisis will endure long term. Leaders need to take active steps to ensure continued relationship building, particularly for remote workers.”
Across the board, there are overwhelming concerns centred around how the current or future, mixed office and remote dynamic will impact team culture and long-term engagement with the business. A CPO from a major retail bank discussed the on-going challenges they have faced in preserving team culture when working remotely, a concern which has been reiterated by senior leaders in the pharmaceutical sector (they discussed the concerns around dilution in connection points between their team members). Previously, the office environment may have facilitated this, but the sense of being together as a team, is near impossible to create in this hybrid world. One CPO explained how some staff have voiced that they have felt a loss in ‘connection tissue’ to the organisation, where as another explained their concerns around the ability of a team to challenge leaders remotely, questioning whether this new way of working may result in a lack of diversity of thought.
As we enter the next stage of the crisis, organisations must adapt to building teams and onboarding people in a way that they feel connected to the culture of a business. The concerns around erosion of social capital during onboarding processes were raised by one CPO from a global consumer goods company, with a procurement leader from a global entertainment’s organisation wanting to know when we will see an increase in employee’s mercenary mentality. It is predicted that as staff feel less connection to an organisation, we will see a spike in salaries as organisations battle to attract talent.
The loss of personal connection will be exacerbated as teams find themselves out the office or in at different times and regularity. Potentially, this may create even greater division within the workforce and in some cases, presenteeism is now more of a premium than ever before, with certain team members feeling that a commitment to the office in a time of crisis, will accelerate development opportunities.
Leaders must quickly learn how to successfully (and fairly) manage a physically divided team. It is imperative that those working remotely are not put at a disadvantage compared to those in the office. Concerns from across sector were around the ‘offline’ or ‘coffee conversations’ that could be missed by those who are working remotely, with 86% of those spoken to being airing concerns. Across the board, there are concerns around ‘accidental exclusion’, with one-to-one calls leading to decisions being made that have not been co-ordinated with the team which can cause certain members of the team to be forgotten about. This was confirmed by one CPO who raised concerns around some staff feeling their views would not be heard.
Yet a formalised method of communicating does not solve all problems, particularly around individual connections to leaders and the business. Whilst virtual coffees and spontaneous conversations have reduced some challenges, they have not replaced office small talk. Leaders from both chemicals and insurance businesses stating that ‘golden rules’ need to be created, with the key point being meetings should either be virtual or physical, but never a mixture.
One CPO felt that more personal desk conversations were often a major motivator for their team. Video conferencing and virtual coffees no longer felt natural and could often feel contrived which again could negatively impact engagement and productivity.
For many, working remotely has highlighted greater inequalities in a team, with the CPO’s we spoke to explaining that younger generations will feel a greater impact on their lives than those more senior in the business. The lack of social benefits and often more challenging, remote working conditions could ultimately lead to a more divided work force.
Throughout the crisis, we have seen introverts and extroverts handle the crisis very differently. Leaders have needed to home in on their facilitation skills, ensuring that both parties can equally contribute to discussions.
The methods used by leaders to engage their teams are going to be tested like never before, with McKinsey stating that ‘mental and physical fatigue is now people’s default’. How leaders will overcome this will be a major hurdle.
One CPO explained his concerns around how they will overcome this, citing a historical reliance on social engagements with the ‘party pot’ being a default tool to create comradery. Yet there are concerns that this may not be possible in the short term and no longer suffice in the long-term, with leaders having to find new ways to rebuild team relationships without the adequate training or prior experience.
LEADERSHIP STYLES & BEHAVIOURS
Leaders must ensure that their management style is fit and ready for a hybrid way of working. Overwhelmingly it was agreed that leaders must adapt to managing through results and outputs however a CPO from a major retailer explained more focus must be placed on performance management and development, which can easily be missed when working remotely.
How leaders will objectively measure performance, with many of their team working remotely is an area of concern for some. It was commented that different team members living environments, would make it difficult to fairly measure performance in a standardised manner.
Leaders must be authentic and lead from the front. Managing through presenteeism, must be ignored. Concerns were raised from leaders of pharmaceutical and financial services business who believe mid-managers that are not experienced in managing through outputs with too many leaders being inexperienced in effectively managing remote teams.
The EQ of leaders has been tested throughout the crisis and must continue. Team members will have been impacted differently during the crisis and several CPO’s stated it is essential that their junior managers suspend judgement and develop greater observation skills of potential issues, showing greater empathy.
Managers must develop into leaders and understand how to get the best out of their teams in a period which is still not ‘normal’. A procurement executive from a global insurance organisation stated that leaders must recognise that there is nothing ‘normal’ about what we are going into and must appreciate that for many the next period is a transient phase. Managers now need to understand how to get the best out of individuals, empowering them to make independent decisions. A CPO within the chemicals sector believes that greater training must be provided around having more honest conversations, considering language and cultural nuances when communicating with multi-national teams.
Purpose in the workplace
Executives from across sector are now reviewing the purpose of the office. As Deloitte discuss in their paper ‘Workforce strategies for post COVID-19 recovery’;
“It is important to remember that transformative change can be difficult and unsettling for many workers. Whilst some may prefer working from home, others may be uncomfortable or unproductive outside the traditional work settings. How leaders accommodate and balance these divergent expectations will help define the future of trust in their organisation.”
There are concerns from across sector as to how being away from the office and your stakeholder community for a sustained period may impact business partnering and the involvement in decision making. Concerns exist as to how social capital can be built upstream when working remotely.
Several leaders explained that certain members of their team have struggled to virtually replace ‘informal coffees’ with their stakeholders.
There are serious concerns that working remotely may have stalled individual’s professional development and stifled creativity. Leaders from both the retail and pharmaceutical sector believe that a lack of sidebar conversations will have a negative impact on innovation.
Maintaining team cohesiveness and connectivity currently – and when 30%-60% of an office may not return – will be extremely problematic. Some believe that we are under the illusion that collaboration has been successful, when the reality is that teams have rallied together during crisis.
A sector wide response has been to look into creating more collaboration areas. Yet the practicality of this has come under question, with the CPO from a leading manufacturing organisation stating that most offices are not currently built to support this, and group size restrictions still apply. With many businesses looking to ‘survive’ during the crisis, it is therefore unlikely that fit out projects or new office space is a realistic priority.
Many employees are likely to seek clarity towards their job responsibilities, particularly if some of their colleagues have been made redundant. An executive from a leading food and beverage organisation stated their concerns in the blurring of roles, with individuals wanting to increase their responsibilities and value to the business.
An executive from a leading hospitality business believes that the crisis may see a broadening of roles and required skill sets longer term. This may have an impact on the external talent organisations look to recruit, or the training and development programmes put in place internally.
The mental health fall out as a result of the pandemic is the overwhelming concern for leaders from across sector. 96% of those spoken to raised concerns around the mental health issues forthcoming of their team members. During the early stages of the pandemic, the World Health organisation issued a statement that noted “elevated rates of stress or anxiety” caused from lockdown. Leaders unanimously felt unprepared and untrained to suitably tackle the topic as we return to the workplace.
A CPO from a leading retail bank stated their concerns on how their teams would adapt to life when they get back in the office, raising concerns around their team’s loss of perception of self, and acknowledged that spotting signs of mental health concerns may have been challenging remotely, yet much more apparent in person.
A recent study suggested that extroverts are more likely to struggle when adapting to life back in the office. It was claimed that the common question of ‘what have you been up to?’ could prompt anxiety, with extroverted team members feeling that they have failed to adequately answer the question with ‘nothing’. An executive from a chemicals business agreed that this is a major concern.
A recent study conducted by the University of Manchester and University of London, called ‘Lancet Psychiatry’, described the mental health inequalities caused by lockdown, “with people living with young children showing greater increases in mental distress than people from child-free homes”. It continues:
“The greatest increase in mental distress was seen in young people aged 18 to 24 and those aged 25 to 34”. It goes on to find, “new inequalities in mental distress have emerged, with those living with young children and those in employment at the start of the pandemic being at risk of larger increases in mental distress”. It concludes, “Our findings suggest that being young, a woman, and living with children, especially preschool age children, have had a particularly strong influence on the extent to which mental distress increased under the conditions of the pandemic.”
The mental health fall-out will be an ongoing issue. A CPO we spoke to explained, “‘humans like a beginning, middle and end and we are in the middle with no end in sight”. This is something leaders must monitor closely with time. The Lancet Psychiatry states;
“As the economic fallout from the pandemic progresses, when furloughs turn into redundancies and mortgage holidays time out, the researchers say mental health inequalities will likely widen and deepen and must be monitored closely so that steps can be taken to mitigate against a rise in mental illness”.
This is a concern for many leaders who recognise that further job cuts and a recession, will have a detrimental effect on the wellbeing of their teams.
A CPO from a leading insurer, stated that it is imperative that team members feel that they have more to offer than just ‘the day job’. Leaders must have the confidence to ask difficult questions, showing authenticity and concern. McKinsey’s recent report, titled ‘Communications get personal: How leaders can engage employees during a return to work’ they state;
“It provides a historic opportunity to overcome the stigma of mental and emotional health as taboo topics for workplace discussion, especially the feelings of isolation and shame that are attached to job losses and other employment casualties.”
Leaders must learn how to manage their own mental health and wellbeing. Nearly all spoken to agreed that measures needed to be put in place to mentally support the leaders too.
As we enter the next phase of the crisis, leaders are going to be tested in ways they have never been tested before. For organisations and functions to emerge from the crisis strongly, it is imperative that leaders find solutions to the multiple problems they may face. Engagement, management styles and mental health are all going to be on-going issues. Organisations must build new strategies, whilst rebuilding team culture and togetherness. Whilst we may be coming towards the end of one crisis, without the right stewardship, businesses may be hurtling into another.
How can organisations preserve integrity of their supply chains, protect their workforce and prepare to ramp up operations in the post-COVID world? Here are four quick steps.
At some point soon, the worst of the COVID impact will have passed. And so, organisations need to work now to preserve the integrity of their supply chains, protect their workforce, and prepare to ramp up operations in the post-COVID world.
With lockdown restrictions easing across the globe, returning to a regular work schedule is imminent. Some of the basic near-term measures include:
Scanning body temperature at work site entrances
Reorganising the workplace to minimize common touchpoints.
Implementing effective disinfectant processes
Training employees on workplace hygiene practices
Developing contingency to respond to suspected infections
These can be achieved through a four-step process:
1. Plan a Phased Reintroduction to Worksites
A large number of workers returning to a shared worksite pose a significant risk of the virus spreading in the workplace. The higher the number of workers the higher the risk of contagion. Remember that managing the number of workers entering a worksite will be critical in ensuring overall workplace health in a post-COVID world.
2. Revisit the Workplace Setup
Granting worksite access to employees doesn’t essentially mean removing all the restrictions imposed during the COVID-19 outbreak. You will still need to closely follow all the government regulations pertaining to employee gatherings, social distancing and workplace hygiene best practices. And, it’s likely that the pre-COVID working environment will be unsuitable for these new restrictions to be implemented.
3. Transport Inventory and Operations to Non-Affected Areas
Many regions at the heart of several global supply chains have been severely affected by the COVID-19 pandemic. Sudden supply shortages from these regions or over-dependence on a single supplier for inventory in these regions may lead to operational delays.
Shifting inventory and production lines elsewhere or opting for local sourcing alternatives can help lower your risk exposure. Additionally, you can also start sourcing pre-approved inventory or raw-material substitutions from regions where a primary supplier has been impacted but a Tier 2 supplier is still operational.
4. Mobilise Support Structures for the Extended Enterprise
Proper technology can help you quantify the pandemic’s relative impact on contractors’ supply chains. Leverage advanced cloud-based workforce management platforms to collaborate with workers working on remote locations. Keep communication as consistent and frequent as possible to remediate pitfalls.
The Long-Term Landscape: How to Evolve Your Business
Short-term measures will provide businesses and supply chains with the much-needed foundation for proactive resilience. However, enterprises are steadily coming to terms with the fact that the COVID-19 pandemic has clearly and irreversibly transformed the future of supply chains. In order to ensure long-term pandemic-proofing of global supply chains, organisations need to take several measures.
Here at Procurious, we saved the best for last. Register today to reflect, re-energise and refresh for another year of innovation at the most inspiring supply chain and procurement conference of the year.
We’ve (finally) entered the homestretch. However, before we can bid farewell to 2020 – the year that quite literally turned our world upside down – we still have quite a bit of planning and ideation left to do. That’s why now, more than ever, you deserve a distraction.
But do not head for the couch and sign into Netflix just yet. Instead, step back from the day-to-day chaos and join us virtually for the 2020 Big Ideas Summit (BIS). Reflect on the year that was and the opportunities ahead; represent your organisation and all its accomplishments despite the pandemic; regroup and re-energise among like-minded professionals.
Procurious itself is proof that great things can happen when we come together. As a community of 42,000-plus supply chain and procurement professionals, we adapted to survive and thrive under the conditions of the “new normal”.
BIS 2020 takes us a step further. Since the beginning of the pandemic, we’ve gone above and beyond what was asked of us. Now, together, we’ll welcome 2021 stronger than ever – both individually and as a community.
Take, for example, our response to the challenges McKinsey & Company presented us with earlier this year:
We redefined the procurement mandate and fostered a culture of innovation to evolve beyond the traditional, transactional stereotype.
We made investments in digital and analytics, integrating automation and digitisation to optimize performance and leverage untapped data that enhanced productivity across the board.
We future-proofed our organisations by making proactive investments that develop existing talent and enable a more agile workforce.
Somehow, we were able to find the silver lining, increase our influence and succeed against all odds, positioning our function for a watershed 2021. So, together, let’s make next year full of innovation and shared success. That journey starts at BIS 2020.
Big Ideas: Make a Difference and Get Ahead
All it takes is one idea. A single idea can change the trajectory of your company and your career. A single idea can make a difference. A single idea can solve problems for people and businesses across the world.
But good ideas don’t always come easy.
You need time to think, create, learn and share. We’ll provide this in a BIG way at BIS 2020 – and give you everything you need to ignite your passion, fuel your creativity and THINK BIG.
BIS 2020 will have dedicated sessions on everything that’s top of mind for you right now: leadership, supply chain threats, supplier management, digital transformation, supply chain continuity and more.
Together, our community will present and share hundreds of ideas and best practices to help you make a difference, advance your career and get ahead in 2021. But remember, you only need one.
Think the Unthinkable and Prepare for Anything
Those that have joined us at Big Ideas in the past have learned the importance of thinking the unthinkable. Never has this lesson been more true than in 2020.
We’re in the midst of a transformational journey that is changing business and life as we know it.
The good news: our digital-first network is designed to change the face of the profession from the inside out, starting with each individual member of the community. The BIS and our Procurious community will help you think differently: we provide big ideas, first-hand experiences and lessons learned – from the best and brightest from across the world – to help you navigate through this unchartered territory and stand out from the rest of the pack.
Trust me, events don’t have to be in-person to be inspiring. Come ready to share what you are proud of and encourage others to do the same. The more you put in, the more you get out. It’s time to lead, thrive and take back control of your professional development. Rest assured; you’ll leave with everything you need to do just that.