Procurement expertise includes the ability to:
- Manage Supplier risk
- Optimise spending (value for money)
- Increase Supplier value
- Improve Supplier communications
- Optimise Supplier portfolio
- Improve Supplier performance
- Comply with governance requirements
More importantly, the work is underpinned by the critical need to inspire trust in the organisation’s leadership team that the Procurement Leaders have the requisite knowledge, skills and behaviours to meet the challenges of the organisational aims.
The Procurement Strategy is key to the organisational aims. Key issues include:
The power of positioning
In a competitive market (name one that isn’t!), an organisation needs to differentiate its Procurement services through the acquisition of business intelligence and business modelling. These are key to ensuring the perception of a ‘one-stop shop’ leading on adoption of best practice and innovation is realised. The leaders can actually ‘drive’ a positioning strategy in addition to the wider-company service offering.
Determine and control the message
What does the Procurement leader say and how is it said? The Procurement cornerstones are “quality, value, innovation and complete customer focus”. Specialist concepts should be presented in simple messages through a story board that customers (and stakeholders) can connect with – so that Procurement is the ‘authority’– on policy, regulatory, quality & improvement and VFM (value for money) subject matters. Every word counts, and so does how and when it is said, all underpinned by risk stratification tools.
Customer focus and understanding the market
The customer is king is hackneyed but so true! That doesn’t mean that Procurement simply deliver what, for example, the business units want. It means that Procurement needs to understand its audience, its customer base, and focus on giving them an experience with Procurement, its services, and its people, that will ensure Procurement is the ‘provider of choice’ and keep them coming back for more. Its differentiators will include agile service delivery, lean business processes, integrated contractual risk packages and a breadth of contractors, vendors and service providers.
Why use Procurement?
The Procurement leader delivers a successful Procurement Strategy with a defensible value proposition, building on the established collaboration ethos. If the leadership team can articulate what Procurement bring to the market that nobody else has or does better, then the devised business goals will be achieved. Furthermore, customers must wholeheartedly agree that the ‘value proposition’ is true. A relevant example is best practice negotiating, contracting and Procurement deliverables such as meaningful KPIs that hold contractors and service providers accountable for non-performance.
As much work need to go into delivering the Procurement Strategy as is spent on claims management or invoice validation or awarding a key contract.
Leadership Competencies in Procurement
- Demonstrate trust – leaders trusted to get the job done. By delegating key tasks they empower their Procurement team and stimulate ideas, ensuring clients’ objectives are understood.
- Show respect – listen to and act upon the whole Procurement teams’ own hard-earned experience and expertise. Leaders are fully prepared to provide the necessary support when the Procurement team need to enhance their current performance. They take a collaborative approach to this work
- Give encouragement – the leaders approach is not to criticise when standards can be improved, but find out what the problem is and assist in eliminating future repeated incidents. This could include specialist training or knowledge transfer
- Value diversity – leaders recognise that what works for motivating one person, won’t necessarily work for another. A flexible approach is aimed at getting the best out of different types of Procurement people – and suppliers.
- Performance visibilities – leaders set clear objectives and recognise clients an team members (and suppliers) insights (and subsequent achievement). There are ‘no surprises’ or political machinations emanating from the leader’s approach.
Issues that need to be addressed:
Persistence and Resilience: The Procurement leaders and business more broadly are in a period of constant change and external direction/influence. The leaders will have skills and experience of driving success, but at the same time they will need to work through resistance of ‘commerciality’- and need to do it professionally.
The ability to teach and coach others: The leaders will take the skills and experience they gain and use those interactions to teach and coach others involved in delivering the Procurement Strategy.
Entrepreneurship: Leaders view themselves as change agents, and have a passion to change things, to figure out new Procurement opportunities, to engage and help stakeholders.
Problem solving: Being able to take care of something that is an obstruction and coming up with a solution; the ability to help other people devise a solution through a structured and timely process.
Interpersonal skills: Further developing how the leaders communicate with others, but also their confidence and the ability to listen and understand is crucial to the success of Procurement.
Procurement leaders already know (many of) the things that will make them more successful in delivering outcomes.
They are potentially complex.
The secret is consistency of methodology using lessons learned in very challenging business situations. It will be doing these simple performance-enhancing things week in, week out.
Success in the required work and the coaching of the leaders’ performance in delivering their Procurement Strategy is not determined by big, one-off, complex new strategies.
The approach is to work – listening, talking, exploring, and iteratively developing their competencies through small, but integrated actions consistently implemented and aligned with achieving the Procurement Strategy’s business goals.
Till next time
Here’s how I can help you…
My company Brian Farrington, works with procurement teams to help them improve the way they buy. And we’re increasingly working with professional service firms to help them improve their relationships with clients’ procurement teams. We provide some valuable free resources, like ‘Think Procurement’ (sign-up for free, below) for more useful(?) insights – and opinion – on procurement, risk, tendering and negotiation straight to your inbox.
If you send me a connection request on LinkedIn (which would be great) please customise the request and tell me why you want to connect. or give me a call on 01744 20698 or contact me online.
Also, don’t forget to check out the free procurement risk demo at Procurisk®.
