Raising procurement’s self-esteem
First impressions
Procurement professionals are indoctrinated into the profession with messages such as “you have to take the internal customer along with you”, “you have to persuade them” and “you have to get their buy-in first”. But what if internal customers are wrong?
Support mentality
Procurement frequently defines itself as a “support function” whose status is derived by the amount of money it spends and the amount it saves. One reason for this is that procurement’s role is frequently not directly tied to key business goals. Instead, it is perceived to be about supporting other functions to achieve their objectives and reduce costs.
This mindset undervalues procurement’s potential to directly influence strategy.
Words to lead by
One test of procurement’s esteem can be found in its mission statement (if it has one). Mission statements communicate a lot about the aims, aspirations and values of the function and provide a window on its self-esteem.
Compare “To increase shareholder value by exercising our procurement expertise and leveraging group scale” with “To provide the optimal supply with the best possible quality at the right time, on budget and based on total cost of ownership”.
Which function would you prefer to belong to?
A compelling vision directly linking procurement’s role to the business strategy is one step to building self-esteem, but must also be backed up with . . .
Business focus
If procurement is to fulfill its potential, it must generate value. It does that by getting as close to the business as it can – by focusing on the business not supply relationships. The procurement function brings the analytic skills, enterprise-wide and supply chain perspective to influence the strategic direction of the business.
Capability
Only by building capability as the foundations for success can CPOs create respect and trust throughout the business. Building capability means putting in place development plans that build both hard and soft skills to lead teams and individuals who deliver results via procurement transformation.
Delivery
When well led, closely aligned with the business, actively engaging stakeholders and with the appropriate mix of leadership skills and technical strength, procurement strongly impacts business performance.
The acid test of success is performance delivery in line with board expectations, which in turn should build the esteem in which the profession so rightly seeks to be held.
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I’m not disagreeing with what you say, but reference your paragraph labelled ‘delivery’: name three examples, please.
Isnt the real battle to show the business how important external spend is, and equip it with the right skills.
What tasks and responsibilities happen to fall to those staff with “Purchasing” (etc.) in their job title is mere detail.
And, shouldnt Procurement just have the same mission statement as the whole business?
It is factual that unless and until those in the procurement profession are able to improve on their capability and have a wide business acumen , they will find it very difficult to interact at the same level with senior colleagues on the company’s board. Most purchasing people are very parochial not yet ready to widen their business knowledge and skills and most of them even when given the chance fail to use it appropriately to update their skills and knowledge.This attitude has to change for the best to be achieved and for us to be taken seriously at all times.