The world around us is changing and you can’t turn anywhere these days without hearing the phrase ‘digital transformation’. Everyone seems to be writing about technology and the race to automate and use augmented intelligence in business. While IBM’s ‘Watson’ is now in daily use by IBM’s procurement teams around the world and some early customers are in the pipeline to buy it too, the reality is that the majority of organisations, whether in the private, public or not-for-profit sectors, are only at the start of this adventure.
Of course, it is crucial that our organisations do focus on adopting technology. The role of the CIO is at least equally important as that of the CPO. Yet the technology focus can’t be at the expense of the human focus. Relationships really matter. Relationships will increasingly be the differentiator as ‘process’ and ‘transactions’ are automated and ‘value-adding’ activities become the sole human focus over the next decade or so.
An obvious place to start, yet it’s well worth remembering because it’s so often overlooked. Now, there’s a separate debate to be had about where ‘procurement’ starts and ends, but I think we can generally agree that a tender process in itself delivers zero value whatsoever. Value for money can only be obtained from good performance of the resultant contract.
I spoke last year about ‘outcome-focused engagements’ at the Procurious Big Ideas Summit. I believe that it is far more positive to focus on the objectives and outcomes required than it is to focus on the minutiae of problems and who’s to blame for them. Indeed, putting aside ‘procurement’ theory for a moment, if we look at the ITIL service management text book, it clearly states that, “good people can make a bad contract work; equally, bad people can make a great contract fail”.
Having the right relationships, between the right people, on both sides of a contract is how you get the best value. Investing time and effort into building, nurturing and maintaining good relationships between buyer and supplier teams will facilitate far more value from contracts rather than letting and forgetting. Indeed, when those difficult conversations are needed for when things don’t go as planned, trust me, you’ll be glad you know the person you’ve got to call before you pick up the phone.
For example, let’s assume a big problem happened last week.
- Scenario one: you call your account manager to complain, having not spoken to them in months, because ‘someone’ messed up.
- Scenario two: you call your account manager whom you spoke to recently and you know they’ve just returned from their first family holiday for five years having had an awful couple of years for various personal reasons and in fact, they’d booked a restaurant you’d recommended. While they were away, a junior member of their team was covering for them and they may have dropped the ball.
In both scenarios, the same problem has happened and it needs fixing, but I suspect the majority of us would approach those two calls differently and the outcomes from those calls would also be different. Think also about whether you would start that call with the phrase, “How can I help you fix this problem?”.
Stakeholders. An increasingly over-used, catch-all term to dehumanise people whom we go to work with day in, day out. During the Procurious event I mentioned earlier, 50 top procurement influencers got together and there was a real appetite to avoid any more whingeing about procurement ‘not having a seat at the table’. The almost unanimous sentiment was: stop whingeing and start listening to your business. Investing time and effort in establishing relationships with the key individuals in our businesses will pay you back in spades.
Ask questions. Be interested. Get under the skin of the challenges your colleagues face. Don’t be constrained by the perception of silos. For example, if you’re an IT category manager, it’s just as important to be interested in what’s happening in every area of the business and what customers’ challenges are as it is to know the cost of a SaaS licence.
We must always remember why we do what we do. The purpose of procurement is not to further the cause of procurement. Of course, a very happy side effect of an effective, modern, highly-engaged and enabling procurement team is that the reputation of the profession will improve to everyone’s benefit, but that can’t be the motivation. The role of procurement is simple; it exists to facilitate and enable the organisation(s) it supports in achieving its vision, mission and goals.
In human terms, we are there to help our colleagues enjoy work through enabling their success and in achieving their objectives. In my opinion, this is a differentiator between good and bad procurement. Establishing relationships with stakeholders based on a genuine interest in understanding their challenges and seeking to help them overcome obstacles proactively will lead to game-changing relationships rather than relationships based on reactively promoting procurement process, policy and procedures.
Career development and credibility
Relationships really matter for professional development, career development and credibility. If you look at the Deloitte 2017 CPO survey or any recent recruitment agency survey, there will be analysis pointing out that the procurement profession is dogged by a lack of ‘soft’ skills and there is a real talent shortage in respect of interpersonal capabilities. IT departments too, who are increasingly brokering services from suppliers, are not traditionally the source of interpersonal expertise. However, both procurement and IT teams must step up here, or the ‘bots’ really will take our jobs.
I believe we all need to take personal responsibility for our own learning and development. Our organisations will usually provide training to help us do the jobs our employers need us to do, better. However, it is up to us individually to take ownership of our preparation for our longer term career aspirations.
I have spent years hearing how important networking is, yet I’ve really struggled to do it. I still struggle, it’s not a natural activity, yet the more I do it, the more I agree how important it is. Relationships really matter with those in your network. The aim isn’t to collect as many LinkedIn connections as you can, but to connect to as many people as you can. Connect in this sense means to talk, ask, listen, learn, impart knowledge and, most importantly, follow up on conversations.
If I learnt one thing last year, it’s that you never know where your next opportunity may come from. I’ve found that networking has opened doors to some interesting conversations and opportunities. Those might be long-term, far-off ideas, yet in the short term, I have found that networking also has immediate pay-offs in terms of the points above. Being market aware and having your finger on the pulse is incredibly powerful in being a credible professional in managing contracts and suppliers and with developing productive relationships with colleagues.
Investing time and effort into building, nurturing and maintaining productive relationships really matters.
Chris Cliffe is the director of CJC Procurement.