Writing off Procurement as the department that finds things for the cheapest price is to write off a complex and important decision-making mechanism that expertly considers several vital factors over “buying cheapest”.
It is saddening how some organisations still think the only idea of Procurement is to buy the cheapest. This leads to numerous erroneous opinions about Procurement function and profession in general. Because of this myth, other departments within organisations try to avoid Procurement department while making strategic decisions. Consequently, in many instances those departments face numerous problems, such as poor service, substandard deliverable, late performance and even disappearing vendors.
It is important to instruct our colleagues and duly inform them about the role and significance of Procurement function in any organisation. It is important to bust Procurement myths.
First, in Procurement profession we do not even use the words “cheap”, “cheaper” or “cheapest”. These are banned words. Because the word “cheap” reflects many attributes, including quality. We say “lower in price” or “lowest-priced” or “less expensive” or “least expensive”.
Second, we never look at the price of goods, works or services, if we are not satisfied with the quality. Even if the price is $0.00. We are simply not interested in seeing the price of a bad quality product.
Third, we do not consider price if delivery schedule and delivery conditions are not what we requested. I.e. if medicines or other vital products are going to be delivered long after they are needed – why do we bother about the price at all?
Forth, most often we give zero attention to price if the company offering products or services is not qualified and reliable. Some exceptions might apply for new technologies, know-hows and monopolies.
Fifth, we do not consider price if a bidder disagrees with terms of the contract we envisage.
Only after all these criteria are met, Procurement starts reviewing, comparing prices.
So, in practice, we might review the prices of only 4 offers out of 20 offers received. The remaining 16 would be filtered out because of the criteria above that come before price.
In other words, price is just one of those numerous factors Procurement considers.
Additionally, it is vital to acknowledge that while sourcing best value for the organization, Procurement wears two hats:
The first hat is for dealing with the final recipient of the product or service. Procurement needs to listen carefully and understand all the details and peculiarities of the final deliverable. The price of a mistake here is too high. Any concerns or alternative solutions should be properly discussed before going to market.
The second hat is for dealing with vendors. Here procurement needs to obtain the maximum value for the organisation, while keeping the vendors interested and motivated.
Negotiating in two fronts is difficult, but no one said Procurement is easy. Procurement is a complex and important decision-making mechanism that evaluates risks and offers solutions to guarantee the best value for money. It is certainly more than just buying the cheapest.
This article is based on series of lectures by Levon Hovsepyan organised in 2008-2014
This article was originally published on June 9th, 2020. Source: Procurement.org and has been republished here with permission.
On the internet, content is king. So wrote Microsoft founder Bill Gates in an influential and still oft-quoted essay in 1996. Content informs and entertains. It can move people to action, whether that’s visiting a different website, buying a product or service or changing their thinking and behaviour. It is enormously powerful, done right.
But with millions of pieces of content added to the internet daily (four million videos are uploaded to YouTube every day, to give just one example!) how can you as a procurement professional stand out?
Start with these top tips for finding your voice, building your personal brand and creating brilliant thought leadership content online…
Who are you?
You might think that’s an easy question to answer. But when you’re considering your online presence, it requires a bit more thinking to create a personal and professional brand that will help you stand out from the crowd and be seen as influential and credible. Ask yourself the following questions:
What do I want to be known for?
Who is my audience?
What is my unique selling point? Why should people listen to me?
Once you’ve answered those questions, you’ll have a clearer idea of the topics you should create content on, the style of content you want to create and also the kind of things you want to stay away from. You can’t do everything, so pick your niche and stick to it.
Know your angles
Any content you create needs to have an angle. If you’re writing a blog post or thought leadership article, your angle is the clear theme or point that you want your readers to take away from your piece. An article without an angle is unfocused, unclear and uninteresting.
The best way to identify your angle is to think about the headline of your piece. How can you best sum up your idea into a short, compelling statement that will make people want to read the whole piece? Often a good idea is to answer a question that people might have or to offer a series of tips. For example: ‘How to build brilliant stakeholder relationships remotely.’ ‘Five creative ways to make cost savings in indirect procurement.’
Writing great copy
So you’ve got your angle, how do you write a great post? When it comes to online content, the best approach is to keep it short (fewer than 1,000 words unless you’ve designated it a ‘long read’), punchy and accessible. Our attention spans are getting shorter by the year – thanks internet! – and people do not have the patience to engage with overly long and complex material online. Break up your article with sub-heads, use bullet points or pull out a few top tips at the end.
If it’s getting too long and complicated, why not break it up into a series of pieces? This will also encourage people to keep coming back to you for insight.
And it might seem obvious, but remember to proofread your work. Your ideas might be fantastic but you’ll be far less credible if your pieces are riddled with spelling errors and misplaced apostrophes!
Keep it consistent
Consistency is a critical pillar of building trust, and you want to be a trusted voice and expert on your chosen topic. Being consistent means committing to putting out content regularly – not spamming people but making sure you are continuing to put out a regular stream of interesting and insightful pieces. If you are starting to blog, you can’t just post something every six months. Instead commit to at least once a month.
Consistency also relates to your voice and subject matter expertise. People should know what to expect from you. That doesn’t mean you can’t mix things up and be creative, but don’t just write about something for the sake of it or because everyone else is doing it. Being consistent means being genuine, authentic and true to yourself and what you stand for.
Know your channels
If a procurement professional writes a blog, but no one reads it, was it even worth writing? Think about the channels you can use to amplify your voice. Twitter and LinkedIn are great tools to publicise your work but also to ensure you are consistently sharing relevant content by others that relates to your interests and the personal brand you have created. Using a platform like Procurious is great because it has a readymade engaged audience eager for insightful content.
And think about format as well as channel. Is written content best for this message or could you get creative with video or audio? Should you embed infographics or imagery? Have fun with it and your audience will enjoy it as well.
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We all know networking and creating connections with the people around us is important, but how do we do at the moment? Here’s how.
Any successful person will tell you that it isn’t what you know, but who you know that gets you ahead. Forging new connections and fostering existing connections can help you broaden your horizons, discover new opportunities, and even secure a much sought-after promotion. Often though, creating these important relationships happens in person. Whether it be via a kitchen chat at your workplace or at an industry-specific event, great connections often start with a personal conversation, a handshake and perhaps an impromptu coffee.
Yet unfortunately, with the world the way it is at the moment, the face-to-face option is not appropriate and in many places in the world, not even possible. So does this mean that networking needs to stop? Certainly not. Here’s five creative ways to stay in touch with your connections, new and old, without ever having to shake a hand.
1. Check in people in your network
Given that demand for mental health services have soared worldwide, from a care perspective, there’s every reason to check in on people within your network, and a number of ways you can engage with them.
Connecting or reconnecting with people could be as simple as asking them how their pandemic experience has been, and whether they are, personally, doing ok. Doing so will help them feel supported, and could open up any manner of conversations about future plans or potential opportunities. Connecting certainly doesn’t need to happen in person, but instead should be done via industry-specific networking sites such as Procurious.
Given the high amount of people who have lost their job or had their hours or pay reduced, it is also a great time to ask others whether you can introduce them to anyone in your network. Well-timed introductions can make all the difference right now, and could be the source of hope and inspiration a colleague needs to get back on their feet.
Finally, it’s been a tough year for everyone, and every extra endorsement can help boost not just someone’s profile, but their morale as well. If you get a chance, give a colleague a recommendation. It could just be the boost they need to secure an opportunity.
With the unprecedented number of people out of work at the moment, many may be looking for work for the first time, so offering to look over someone’s CV could be of real benefit. Alternatively, you could direct them to opportunities within your network, or even recommend online events or upskilling options that might help. Helping others in need is what networking is all about – you never know when you’ll need to call in a favour and your connections won’t forget that you helped them out.
3. Give recognition and show as much appreciation as you can
When it comes to feeling appreciated by our colleagues and managers at work, people typically believe that money speaks louder than words. But research shows that isn’t true. In fact, simply saying thank you can go a long way – and can help deepen your connections with those around you.
Research conducted by Gallup of over four million employees showed that recognition at work boosts not only someone’s morale, but their productivity and engagement with those around them. In other words, recognition makes us happy! But how do you do it in a sincere and meaningful way?
One great way to do it is to give someone praise for something they individually contributed. Ideally, do this in a public forum, such as a procurement industry group discussion board. Giving someone praise publicly for their great work will help them amplify their impact.
4. Recommend learning content
While many of us in procurement have found ourselves busier than ever during the pandemic, some in certain industries may have found ourselves scratching our heads, wondering what to do. This might particularly be the case if we’ve been furloughed or worse, made redundant.
But if we’ve found ourselves with spare time, there’s plenty we can do about that! When this pandemic is over, the procurement landscape will look a little (or entirely) different from what it did before. That’s why now is the time to focus on a number of different technical and soft skills, including resilience. Many courses that you might be interested in are inexpensive or even free, and recommending them to other people can help showcase your industry knowledge and give you a reason to get in touch with your connections.
5. Start a group chat (and talk about things besides work)
The point of creating connections is to broaden your network and potential opportunities. But in creating and fostering these connections, sometimes it’s important to talk about everything but work. Plus, having a casual chat and even sharing some humorous banter with colleagues can inject some fun into your day and help you feel less lonely and more connected.
Whether it’s you sharing cat snap chats or talking about your children or the (limited) activities you’ve been able to undertake during lockdown, bringing your whole self into group conversations can help foster more authentic connections with those around you.
How have you been staying connected with your colleagues and those in your broader network? Do you have any other suggestions? Let us know in the comments below.
Procurement and supply chain leaders are experiencing newfound appreciation and opportunity following their response to COVID-19.
COVID-19 hit supply networks hard. So hard, in fact, that 97% of organisations experienced a related disruption. Still, there’s more to the story than disruption and chaos.
Insights shared by over 600 procurement and supply chain professionals actually paints a positive and inspiring picture: supply chain and procurement leaders were prepared – and responded brilliantly – when faced with a global pandemic that literally brought the whole world to a sudden halt. Now they have an opportunity to reset the procurement agenda.
A Look Beneath the Surface
Consider the data beyond headlines. While nearly every organisation was impacted, only 17% said the supply chain disruption was severe. On the other hand, almost half agreed the impact was minimal or moderate.
Similarly, despite the macro economic turmoil, the impact on supplier payments has been relatively modest. Most contracts and supplier relationships survived the chaos, showing the strength of existing relationships and strategies. According to our research:
58% of organisations are still operating and paying their suppliers per contract,
14% are speeding up payments to suppliers,
6% are providing direct financial support.
When the pandemic affected supply chains directly, procurement responded quickly and effectively. The majority of organisations (65%) were forced to source alternative suppliers for affected categories. As of early June, 79% of those surveyed had already found alternative suppliers for affected categories, with 53% locking down new suppliers in less than three weeks. Amazingly, 18% were able to find new suppliers in only a weeks’ time. This response has not gone unnoticed.
The Spotlight Shines Bright
The agility shown by procurement and supply chain leaders, along with their ongoing criticality in managing the crisis, has been a boon for the function with executives and board members.
“The crisis has put procurement in the spotlight,” commented Ian Thompson, Regional Director, UK and Nordics at Ivalua, a source-to-pay technology provider. “There are a lot of talented executives now getting the attention of the c-suite for the first time.”
When we asked how leadership leveraged procurement and supply chains teams during the crisis, only 16% of survey respondents said they were still being viewed tactically. On the other hand, 40% said their recommendations are solicited more than usual and 22% said they now have a seat at the executive table with input on key decisions.
“For as long as I remember, the question has always been how do we make the C in CPO a real part of the c-suite?” said Thompson. “It’s finally happening, and procurement needs to capitalise.”
According to Thompson, the key is taking advantage of the new platform. “Now that you have the attention of the c-suite, you need to have an agenda, and use the platform to properly set the record straight for what procurement is all about, and what’s possible. When called upon, you can fix the problem, or, you can fix the problem and reframe the conversation internally.”
The heightened attention has also led to renewed interest in procurement and supply chain careers. As a result of the crisis, nearly 62% of all respondents and 71% of millennials said their interest in procurement and supply chain has increased.
“The interest is very high. Procurement has become an essential function during the crisis, especially on the direct side. We have procurement teams that are fueling the food supply chain, sanitising the country and ensuring the flow of essential services across the globe. More people are recognising the importance of procurement and supply chain,” said Thompson.
The current dynamic should lead to fresh career opportunities for Generation Next. The function’s performance during the crisis sets the stage for increased investments in talent development and technology, a bigger seat at the executive table, and new opportunities for ambitious practitioners to make their mark.
2020 is the year of things that seemed easy suddenly being oh so hard. Take going out for dinner, for example, which many of us took for granted until restaurants worldwide were shut. Or from a work perspective, ease of logistics. Closed borders in every continent has certainly presented way more issues than any of us ever thought possible.
And yet another area of life that always presented its own challenges, and now even more so, is looking for a job. Whether you’ve been made redundant or stood down, or you’re starting to feel as if the pandemic isn’t bringing out the best in your employer, the prospect of job hunting right now seems a little scary. What’s even out there? Will I ever find something? And how do I manage my emotions in such an unstable time?
To help guide you through your job search, we spoke to two highly experienced recruiters, Imelda Walsh, Manager of The Source, an boutique procurement recruitment agency based in Australia, and Christina Langley, Consultant at Langley Search and Interim in the UK. Both enlightened us on not only the nuts and bolts of how to manage your job search at the moment, but also how to best manage and talk about your experiences if you have found yourself unemployed.
I’m not feeling that confident at the moment. Is that ok?
At the best of times, job searching can feel a little daunting. But right now, job searching can feel downright terrifying. With job listings in some sectors in the UK down by up to 59%, and job listings in Australia following a similar trend (latest reports show listings are down 54%), many people are feeling overwhelmed by the competition out there, but at the same time underwhelmed by their ability to break back into the market, especially if they’re unemployed. But is the situation so dire when it comes to procurement?
Christina certainly doesn’t think so, as many of her clients are actively hiring for roles. Yet at the same time, she understands that procurement professionals may be feeling a range of emotions right now:
‘How people feel right now depends on their coping strategies. Some will feel empowered and organised; confident in their skillset and pragmatic about what they will consider.’
‘Others may be in denial, unable to view themselves in the context of what has happened. They may be feeling angry, or even struggling with home obligations so it might be difficult to devote the time needed to find another role.’
I’m unemployed right now. How should I be looking for a job?
There’s no doubt that looking for a job right now can be stressful. So how do you ensure that you don’t get caught up in it all, and spend hours and hours obsessively looking for anything and everything?
When it comes to job searching, Imelda says that you need to make a plan and stick to it:
‘Start your job search by defining what roles you want. And at this time especially, I’d also recommend having a plan b. Be clear on what you want but also what you’d accept if you don’t get what you’re looking for in a certain amount of time.’
But what about if you’re really keen to get back to work? Should you apply for anything just in case?
‘No.’ Imelda says.
‘Be strategic about what you apply for, and don’t apply for something that doesn’t genuinely interest you, as this will dilute your profile and make you look desperate.’
Throughout the job search process, Christina says it’s critical to keep balance in your life, and to make sure you’re exercising, eating and sleeping well. Beyond that though, Christina says that like anything, in your job search you need to create achievable goals:
‘Give yourself goals, such as, this week I’m going to network by contacting ten former bosses or colleagues, next week I’m going to write my CV.’
‘Completing these actions will make you feel like you are making progress.’
How do I network effectively at the moment?
Right now, it’s fair to say that most people have a lot going on, with many still working through the pandemic and what it means for their jobs and lives. Thinking about careers and networking might not be at the top of everyone’s mind, so it may feel awkward or inappropriate to network.
Christina believes, though, that we don’t need to feel embarrassed about networking right now. It’s all about mindset, she says, and thinks that we need to change the fundamental question we ask:
‘It’s not “please do you have a job?” but instead “please let me know if you hear of anything.”’
Imelda and Christina both believe that if you are networking, you need to be systematic and targeted in how you do so. Specifically, Imelda recommends:
‘Start by researching the market. What industries are hiring right now? In many parts of the world, that might be healthcare, government, FMCG, tech and a few others.’
‘After you’ve done your research, figure out, ideally, what industry, company and leader you’d like to work for.’
‘Then specifically connect with them or ask to be introduced on platforms such as Procurious and LinkedIn.’
Actually connecting with people should only form part of this process though, Imelda says. The other part is giving back to the community and growing your personal brand and presence. The best way to do this is to be proactive online, through sharing your opinion via commenting on what others are doing and saying in your industry, and publishing your own thought-leadership articles.
How do I interview confidently?
Interviews are nerve-wracking at the best of times. But especially if you’re unemployed, and especially during a pandemic, they can be particularly nerve-wracking.
Fortunately, Imelda and Christina both believe there are many things we can do to calm our nerves before an interview, and especially one with a hiring manager.
Imelda believes the key to good interview performance is preparation. Prior to any interview, she says that it’s imperative that you know your resume:
‘Before an interview, ensure that you can explain all of your roles and your amazing achievements. To do this, reflect on your career and the value you’ve delivered.’
‘And make sure you’ve done your research. Practice storytelling and have answers prepared to common questions.’
Preparation, in and of itself, can make you feel more calm. But if it hasn’t completely taken away the nerves, do whatever you need to just prior to the interview to get yourself ready:
‘Whatever it takes to make you feel better. Meditate, listen to your favourite song, practice your answers in the mirror. If it works for you, ensure you do it!’
As someone who interviews hundreds of people in any given year, Imelda does acknowledge that interviews can be harder than they seem. But at the same time, she thinks that we need not be too hard on ourselves. Hiring managers and recruiters alike know that it’s a difficult market, and that many people have been stood down. The key, she thinks, is to be able to effectively explain your time off:
‘The pandemic is global – everyone knows what is happening. So if you’ve found yourself with a resume gap, people will generally understand.’
‘But still, a good explanation of what you’ve been doing will help. For example, if you say you’ve been doing “nothing” managers might be a little concerned. But if you say you’ve used the time to upskill, or even to progress a personal hobby or project, that will suffice.’
Recruiters can also be a big help if you’re nervous, Christina says. Specifically, she encourages all candidates to ask questions in order to understand the big picture of any job they may be going for:
‘Always ask your recruitment consultant for the real story and requirements beneath the job description.’
‘And also try and find out about the hiring managers who will be interviewing you. What is their background? Where have they worked? Etc.’
How do I know if I’m nervous in an interview?
Try as we might, sometimes it’s just not possible to get rid of interview jitters. But how do you know if you’ve successfully squashed your nerves or not? There’s a few things that give you away, Imelda says … and they may not be what you think.
‘Fumbling over words, sweating, nervous twitches like shaking a leg, a lack of eye contact, or even talking too fast and rambling are common signs you’re nervous.’
Christina agrees, adding that your voice volume can also give you away:
‘If someone’s nervous, they often talk too loudly or even too quietly.’
While these might be common signs of nervousness, Imelda has also seen a couple of other less common signs of nervousness that we should all be aware of:
‘Often, candidates are told to use “power poses” before the interview to calm nerves. But a couple of times, I’ve seen the overuse of power posing, for example, sitting back in a chair with a leg up on your knee, in interviews.’
‘Although this may feel commanding, it is often a compensation for nerves.’
Note to all: keep the power posing to before the interview!
What should I talk about in an interview?
The world of procurement has most certainly undergone a shake up since the pandemic. So does this mean that employers are looking for certain traits and experiences now that may not have been as important before?
Imelda certainly thinks so.
She’s seen the following shift in what employers are looking for:
‘We’re seeing an even bigger focus than ever on supplier relationships. Organisations are wanting procurement to have a genuine strategic relationship with vendors, meaning they can lean on them in times of need.’
Beyond supplier relationships, Imelda believes that the soft skills that were always considered important in procurement are considered even more important now:
‘Your ability to influence, engage and be customer-focused is even more critical right now.’
‘Beyond that, businesses want savvy procurement professionals who know that now is no time to waste a crisis. Instead, now is the time to step up and show the importance of procurement.’
‘Innovate, be open to change and take advantage of this opportunity to make a positive difference.’
How is job search going at the moment? Are you having to do anything differently? Let us know in the comments below.
Join Procurious to connect with 40,000 other ambitious procurement professionals and get free access to networking, industry news, training and much more.
What can be done by procurement and supply chain management professionals NOW and SOON to stay ahead of this challenge?
With COVID-19 still spreading across the globe, it’s clear the economic costs will have a huge impact on organisations. It was reported back in February that 94 percent of Fortune 1000 companies were already seeing supply chain disruptions due to coronavirus. (1) We can’t help but notice the vulnerabilities of a global supply chain, with procurement on the “organisational front line,” so to speak. Adapting to disruption and trying to predict risks through such actions has become the new normal.
Although at first, organisations went into an intense reactive mode, we now see some shifting from reacting to the crisis to recovering and re-purposing their businesses. Adapting to disruption and trying to predict risk has become the new normal. But, we should not lose sight of our overall source-to-pay strategy to include what’s next, and how to ensure we can be resilient on an ongoing basis. It’s not enough to simply react to these unpredictable situations, we need to be ready for the next inevitable disruption. In other words, we need to incorporate “the NOW,” “the SOON” and “the ONGOING” into our source-to-pay strategy.
In this blog, we focus on what can be done by procurement and supply chain management professionals NOW and SOON to stay ahead of this challenge
Strategy for the NOW: Strategic Payables
For many countries at the time of this writing, the worst is yet to come. In many industries, organisations are experiencing revenue reduction at much faster rates than the costs to run their business. For those organizations and their suppliers, reducing operating expense, optimizing and protecting cash flow and right-sizing bought-in cost-to-revenue, is critical NOW to withstand weeks or months of economic downturn and supply chain disruption.
There are a number of ways organizations can use “strategic payables” to increase cash flow quickly. Outsource category management of non-core suppliers and commodities: Experienced Category Leads can identify opportunities to take cost out of third-party bought-in content either as a one-time service or through continuous category management services. Outsourcing partner-run operations for such scope can effectively become a “middle office,” leaving Category Leads more time to focus on revising and implementing category strategies.
Digital middle office: Provide an integrated service desk as a single point of entry for intake and requests to automate user and supplier interaction. This will drive simplification, efficiency and compliance through transactional processes and can significantly reduce operating expense associated with manual processes.
Advanced insights: By reviewing historical spend, as well as industry pricing trends and other market intelligence through AI-based solutions, organizations can identify spend savings on both indirect spend and direct spend. Inventory optimization insights can further reduce carrying costs.
Trade payables financing: By outsourcing spend end-to-end with a service provider who works with preferred commercial integrators and supply chain financing partners, they can provide supply chain financing for earlier and debt financing for extended payment terms. This will allow organizations to optimize annual cash in as few as one to three months.
Strategy for the SOON: Optimize OPEX
Most industries are looking to further optimise their operating expenses (OPEX) soon as central in their recovery plans. A primary way to do this is to convert capital expenses (Capex) to OPEX, such as to engage a service provider, in order to increase deductions and reduce taxes for the near-term, as well as to reduce maintenance cost longer term. Other ways to affect OPEX are to optimize where work gets done; reduce risk and improve compliance; and improve the efficiency and effectiveness of how work is done, such as through automation.
The objective for the NOW and SOON phases is to gain upfront savings to fund transformation activities and ensure resiliency in the ONGOING phase.
Strategy for ONGOING OPERATIONS: Transform to deliver value and plan for resiliency
Although the near-term concerns are increasing cash flow and optimising operating expenses to “get over the hump” during the crisis, organisations should continue to prioritise transformation programs that deliver sustainable value over time. It is still crucial to re-engineer workflows to use cognitive capabilities for insights and connected experiences for longer-term advantage – we call these “intelligent workflows.” It is also crucial to curate high quality, proprietary data proactively for insights to deliver value ongoing.
Lastly, we can expect resiliency of workforces, workplaces and IT systems to get renewed attention in ensuring continuity for ongoing operations. As stated in the IBM Institute for Business Value COVID-19 Action Guide, “perhaps the most resilient course of all may be teaming up with supply chain partners to establish a coordinated crisis-support system. In these sorts of situations, partners will likely rise or fall together, and sharing information and ideas in that climate becomes highly valuable.” (2)
Whether or not your business is prioritising sustainability right now, there’s no doubt that it will be the focus for many of us in 2020 and beyond.
As we all well know, executing on sustainability can be challenging. Is it even possible to have full supply chain transparency? How do we manage the requirement to be sustainable against risk and cost savings? Almost all sustainability initiatives, while well-intentioned, can be fraught with complexity.
While this may be the case for many of us, one person who believes that sustainability isn’t as complex as it seems is Chris Fielden, Group Supply Chain Director for Innocent Drinks. Innocent Drinks is a revolutionary health drinks company that gives an incredible 10% of their profits to charity. Beyond this, Innocent focuses on sustainability throughout every part of their supply chain, from creating a plastic bottle that’s made from 100% renewable material to developing a carbon neutral factory.
Prior to his keynote at Procurious’ Big Ideas Summit, we sat down with
Chris to see how he helps drive such incredible sustainability achievements at
Live your values – and incorporate them into your
Have you ever looked at a corporate values chart
and thought to yourself, ‘those don’t really seem to matter here?’ Many of us
feel the tension between aspirational values and lived values, but one of the
reasons Chris thinks that Innocent is so successful in sustainability is
because they don’t do this.
Chris believes that sustainability can’t simply be
a ‘tick box’ but it needs to be front and centre of a business’s genuine value
set if they want to achieve it. On this, Chris says:
‘Innocent drinks is a values-led business,
absolutely. We believe in [and live by] sustainable capitalism. We hire people
against those values.’
‘Often the right way [to do things] might not be the easy way, but we do things the right way anyway because we truly live our values.’
Even beyond this, Chris says that sustainability
needs to be incorporated throughout an organisation’s entire business
‘Here at Innocent, we’ve incorporated sustainability
into our entire business model through becoming a B-Corp.’
Give your people freedom
Sustainability is often about pushing boundaries
and doing things that haven’t been done before. So, in order to achieve that,
Chris thinks you need to give your people creative freedom – and this is
exactly what’s happened at Innocent.
‘[The carbon-neutral factory idea] came about
primarily because we told our people not to accept no. We told them “don’t accept
it when someone says it can’t be done.” In all aspects, we try not to constrain
Not limiting people also applies to the suppliers
you work with, says Chris. In fact, when you don’t give suppliers limitations,
you can sometimes achieve things you never would have imagined. When planning
Innocent’s carbon-neutral factory, Chris gave his suppliers an unusual
challenge – which yielded an unusual (yet highly beneficial) result:
‘With the carbon-neutral factory, we said to the contractors
we employed – just geek out and tell us what you would do if you had unlimited
funds and no restrictions.’
‘Doing so meant that it actually turned out cheaper
than we budgeted and the solution is ever better!’
Giving their people and suppliers freedom has meant
that Innocent’s new carbon-neutral factory, to open in Rotterdam in 2021, is truly one of
a kind. Costing over $250 million, it will incorporate
initiatives such renewable energy, sustainable water use, and resource-based
waste management. Its Rotterdam location will also mean considerable C02 is
saved, as the drinks are produced close to where ingredients arrive, saving
trucks over 13,000 trips a year.
Not being afraid to fail
Despite Innocent Drinks being a relatively large
company (it recently surpassed £10 million in donations alone), everyone works
hard to cultivate an entrepreneurial spirit, says Chris. And a big part of this
is not being afraid to fail.
‘Failure is a big part of what we do. We only have
to be 70% sure of what we’re doing. And failure has led us to where we are –
we’ve doubled in size because we’re not afraid to fail.’
This can sometimes be hard to stomach as a
procurement professional, Chris thinks, as we’re trained to mitigate risks. But
Chris insists that Innocent still do this:
‘We do have risk registers so it’s not as if we’re
Where to from here?
With Innocent being at the forefront of all things
sustainability, it’s hard to imagine what Chris might still want to achieve.
But there’s always more, says Chris, and ultimately, he’d like to see more
businesses taking an active role in helping the environment:
‘I would love to see more businesses doing more –
but we can’t wait for politicians to mandate this. The impetus needs to come
Ultimately, Chris has an important message for all
procurement professionals out there:
‘If you put sustainability at the heart of your
agenda, then know this: you can make a difference very quickly.’
What are you doing to drive the sustainability
agenda at your business? Let us know below.
Want to learn more about exactly how Chris is
driving the sustainability agenda at Innocent, and how you can do the same?
Chris is speaking at the 2020 Procurious Big Ideas Summit on March 11, and you
can hear all of his insights through becoming a Digital Delegate. Grab your free pass
Can we use the disruptive model pioneered by Amazon, Uber and Airbnb in the struggle against climate change?
Uber is the world’s biggest taxi company, but doesn’t own a single taxi cab. Airbnb and Booking.com are the world’s largest hoteliers, but don’t possess any hotels.
And after being in business for a quarter of a century, Amazon – the world’s biggest bookseller – is only now experimenting with physical bookshops.
There are many lessons to be learnt from such examples. Chief among them, perhaps, is that being disruptive does work.
These days, businesses and consumers are far more receptive to ‘early-stage’ disruptive ideas. They have seen for themselves how easy it is to be overtaken and left behind by clever ideas whose time has come.
I’ve been thinking a lot about disruptive ideas in recent weeks. And in particular, I’ve been thinking about disruptive ideas in the context of sustainability.
And the conclusion I’ve come to?
We may need some fresh disruptive ideas and business models if the sustainability agenda is to make much more progress.
That may sound mad. Since – say – the 1970s and 1980s, the world’s environmental protection initiatives have made huge progress.
Sustainability is high on both corporate and government agendas. Cars are far more fuel-efficient. Houses, offices and factories are far more energy-efficient.
Skies are clearer, water cleaner – especially in the developed world, although progress is being made elsewhere, too.
And yet, and yet. Waters are clearer, yes. But visible pollution has been replaced with microplastic fibres.
Smoke from coal-burning has gone from our skies. Yet CO2 emissions are at record levels. The Amazon’s rainforests are vanishing. Sea levels are rising. And average temperatures are increasing.
Is it any wonder that groups such as Extinction Rebellion are protesting so vociferously? Or that the activism of teenage protesters is so widely applauded?
For me, personally, one of the most persuasive signs that current approaches to sustainability aren’t delivering fast enough has come from the Harvard Business Review.
Late last year, influential management thinker John Elkington took to its pages to officially ‘recall’ – that is, take back – a concept he first launched 25 years ago: the Triple Bottom Line.
Simply put, he argued, the Triple Bottom Line was no longer enough. Something else was needed. Something bolder.
The idea behind the Triple Bottom Line was simple. Instead of focusing on just profit, the Triple Bottom Line sought to get businesses to view their performance in a broader context.
They should examine their social, environmental and economic impact.
The idea has had a powerful effect. Twenty-five years on, it’s made a big difference.
But it isn’t enough, acknowledged Elkington. Too many businesses see it as a trade-off mechanism, rather than as an absolute test.
Something else is required if we are to really ‘shift the needle’.
As he eloquently put it: ‘We have a hard‑wired cultural problem in business, finance and markets. Whereas CEOs, CFOs and other corporate leaders move heaven and earth to ensure that they hit their profit targets, the same is very rarely true of their people and planet targets.’
The ugly side of fashion
Which is why I’ve been thinking about disruptive ideas, and alternative business models.
Could they do enough to ‘shift the needle’?
I’m excited about their potential, to be sure.
Take the fashion industry. It’s been described as the second-most polluting industry in the world.
In water-scarce countries, water goes to produce cotton, not food. Microplastics from synthetic textiles fill our rivers and oceans.
According to the United Nations, the fashion industry consumes more energy than the aviation and shipping industries combined. It is responsible for up to 20% of global wastewater, and 10% of global carbon emissions.
Container ships full of cheap clothes ply the world’s shipping lanes. They belch out vast amounts of the sulphur-laden black smoke that comes from burning bunker oil, the world’s dirtiest fuel.
And yet, at the end of it all, a lot of ‘fast fashion’ simply gets thrown away. The UK sent around 300,000 tons of clothing to landfill in 2016, for instance.
What can be done?
Instinctively, most people think about some form of clothes recycling. But they are forced to conclude that the technology to cost-effectively turn unwanted clothing into useable yarn doesn’t yet exist.
But there’s another form of clothes recycling that doesn’t need technology. Or rather, the technology that it needs is already developed and with us.
The sharing economy
I’m talking about clothing rental, which is catching on fast.
Names such as Girl Meets Dress, My Wardrobe HQ, By Rotation, Rent the Runway.
These and others are offering affordable clothing rental services, either on their own account (they own the clothes), or as intermediaries (other people own the clothes).
At the moment, a lot of the activity is at the high end, in designerwear. Fast fashion it isn’t – yet.
That said, there are experiments underway. H&M, for instance, is trialling a rental scheme at its flagship store in Stockholm. In the United States, Banana Republic has recently launched a rental service.
Even so, it’s clear that what’s going on has the potential to evolve and grow.
As a business model, it’s different and disruptive. And it addresses many of the sustainability issues of the traditional ownership model.
Instead of being hung up in a wardrobe, clothes are worn again and again – just by different people.
So could such a model ‘shift the needle’ in terms of fashion’s impact on the environment?
No one, including me, yet knows: it’s far too soon. Right now, fashion rental is far from becoming mainstream.
But don’t forget: so too, once, were Uber, Amazon and Airbnb.
Disrupting accepted business models in fashion – and other areas – could really help in the struggle to combat climate change.
This article was written by London Roundtable attendee, Omera Khan. If you are also interested in attending our next Roundtable in London, you can contact [email protected]
Procurement should be swiping right for Social Enterprise to create broader outcomes. It’s not the easiest change to make, but it’s a vital one for the future.
Doing things in new ways can be awkward. It’s like dating, there is nervous tension about expectations versus reality and how you will be perceived. Will you be able to “sell” your positive traits well? Will the other person measure up to your idea of success? Do you split the bill or pay for the whole thing? All of the rules from your last relationship have gone out the window – this is new territory.
In New Zealand, the Government has recently changed the procurement rules by shifting the focus towards ‘Broader Outcomes‘.
“Broader outcomes are the secondary benefits that are generated by the way a good, service or works is produced or delivered. These outcomes can be social, environmental, cultural or economic benefits, and will deliver long-term public value for New Zealand.
Broader outcomes require you to consider not only the whole-of-life cost of the procurement, but also the costs and benefits to society, the environment and the economy”
There is no longer a focus on value for
money, which is sometimes treated by some as getting the lowest price. The
focus is on public value which is multifaceted.
What Else is New?
There have been other subtle changes to the Procurement Rules which have removed barriers whether they were real or perceived. The direction is set, the path has been cleared and now we must dust off our dating profiles and learn to do business in different ways.
We must actively seek commercial outcomes that derive social impact. This is not to say that was not in the consciousness before, but it was not quite as front of mind as it is now.
Challenges of Putting Yourself Out There
This welcomed change brings about some challenges. There are varying degrees of experience and knowledge of working in a more agile or lean manner within procurement ecosystem. Applying new ways of working to the core machinery of Government can be even more challenging.
While the appetite is there, it can take some time to grease the entire wheel to move. There are many sectors and government agencies where these types of models and ways of approaching procurement have been around for eons.
It’s about bringing together the case studies of what has worked well and applying them more liberally to other opportunities.
Procurement functions can feel pulled, with one foot stuck in the traditional process driven tendering world and the other foot in the new procurement world. The new world focuses on early engagement and co-designing solutions more than ever before.
In the new world, procurement adds value at the beginning of the process and through effective contract and supplier relationship management. Procurement is not the process, in fact this will be largely automated in the not so distant future.
The new world suits the smaller businesses, the start up’s, the social enterprises as it makes Government more easily accessible.
Who are we Swiping Right for?
There has been a marked increase in interest in social enterprise or purpose driven businesses. This does not mean discriminating for these types of businesses but rather, deliberately bringing them on the journey or slicing up parts of projects that may be better delivered by these types of businesses.
It’s about giving them a voice at the concept stage or joining them up with other larger businesses who can bring in the big guns and who are sometimes better placed to take on larger risk.
The Awkward Social Enterprise Disco
Generically speaking the large buyer
(particularly government) can look at start-up’s or small businesses with a
high degree of risk and uncertainty.
Can they met all of our requirements?
Can they grow to meet the evolving capacity demands that successful projects often breed?
The smaller supply side of the fence often look at government as impossible to break in to, focused on lengthy tenders, slow to move and offer contracts that require extreme liability stances or loaded risk that shifts the balance towards the supplier. A small start up or social enterprise, for example, might not have the knowledge to begin to deal with our often seemingly fixed ways of working.
The movement is happening, here is what I
Agencies working together
Buyer and supply side meeting and connecting
Different sectors of the supply side engaging to work together
More and more green lights everywhere: internal buyers, management, stakeholders, suppliers and the rules are more supportive
Procurement functions are helping to facilitate the gap by connecting supply markets and private sector with internal buyers
Procurement functions are working with the internal buyers by showing different ways of managing the process, e.g. co-design, agile, sprints, early supply market engagement.
Starting small, not tackling the significant contracts first.
Because we should, because it’s the right thing to do and because spending the same dollar twice by making an impact and providing tangible social good with taxpayers’ money. Just. Makes. Sense.
In 2013, UN member states officially adopted the 30th of July as the ‘World Day against Trafficking in Persons’. The aim of the day was to raise the profile of this critical issue, and “raise awareness of the situation of victims of human trafficking and for the promotion and protection of their rights.”
In September 2015, the same member states created new goals aligned with this agenda. The goals aimed to put in place measures to combat people trafficking, specifically to end trafficking of and violence against women and children.
In the simplest terms, it’s up to the individual organisations to take responsibility. Responsibility for their own operations. Responsibility for their suppliers. Even responsibility for the wider supply chains.
Modern Slavery and People Trafficking doesn’t stop with a tick-box exercise. Procurement needs to stand up and make a difference through its actions, rather than words. Under the Modern Slavery Act, any organisation with an annual turnover greater than £36 million must publish a statement on what they are doing to combat slavery in their supply chain.
Let’s look at public procurement in the first instance. (But don’t let that make you think private companies are off the hook. We’ll come back to this!)
Public procurement faces huge scrutiny and rightly so. According to reported figures, an estimated £220 billion worth of contracts were awarded in 2017 by the UK Government to private companies. (See, we did say this was coming.) However, in 2018 it was reported that 40 per cent of the Government’s top 100 suppliers by lifetime spend had failed to comply with Modern Slavery legislation on reporting.
Far from leading from the front, the UK Government was being criticised for continuing to award contracts to these organisations. Figures for the private sector are harder to come by, but we can assume that the same reporting issues exist there too.
Procurement’s Role in Reversing Fortunes
Compliance with legislation and reporting issues would be a good place to start. Beyond this it’s about creating a culture of responsibility throughout the supply chain. Openness, honesty and transparency are the hallmarks of a strong supply chain. This is what procurement must aim for as a minimum.
Tools such as blockchain and other technological advancements can provide key assistance. From here, procurement can move to open up data and shine lights on the dark corners of supply chains. By doing this, it helps to expose poor practices, undermine slavery operations and start making a real difference to those in need.
The final thing to remember is not to do this in isolation. True, each organisation has individual responsibility. But as with many procurement progressions, collaboration and communication are key. The whole is greater than the sum of the parts. Organisations face common challenges, so they should be able to come up with common solutions.
Shared expertise is the way forward and the path to procuring with purpose. Let’s finally put an end to modern slavery and people trafficking. You can take the first steps now.
Procure with Purpose
Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.
Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery and People Trafficking to Minority Owned Business, and from Social Enterprises to Environmental Sustainability.