Fostering a Culture of Procurement Excellence for All Round Business Success
How does your organisation know whether your procurement team has the right culture – a culture that supports and rewards procurement excellence?
How do you define and measure procurement excellence in your organisation?
Procurement Excellence Starts with the End in Mind
How would you know if your procurement team is excelling if you do not know how to measure excellence? To determine excellence, you therefore have to start with the end in mind.
All round business success is the outcome and measure of success of procurement excellence.
Did you note?
I dared to use the words “all round”. Or, as we used to refer to it previously “win-win” outcomes.
Business success with balanced outcomes. Imagine that!
I see continued unbalanced outcomes all too often in supporting clients with commercial and contract negotiation. For example:
- one party gains at the detriment of another including trying to take intellectual property for free;
- the focus in only on short term gains with limited long term vision and strategy.
This is not excellence or a measure of all round business success.
Procurement excellence is the end result of a collaborative, courageous, deliberate break down barriers focus and drive – a balanced end result for both the buyer and the seller.
” Excellence means accepting only the best, and understanding that when it is not given that you, as the leader, are at least partly responsible.”
Culture Meets Vision
I have worked in different industries, different countries and different cultures. For some time now, I have been running my own business.
My experience allows me to work in the procurement field in both the area of the buyer and the seller.
Therefore, I experience both the good and the not so good of procurement.
Who does really well?
Those organisations where there is a strong culture of excellence in all areas and leaders have the courage not only to create a vision but deliver the vision.
Which organisations fall in the not so good category?
Those stuck in the time warp of closed doors, no access and do-not-speak-to-us mentality. Vision and values on the wall in itself will never be good enough.
6 Tips for Fostering A Culture of Excellence in Procurement
#1. Mentoring Strong Leadership to Develop Procurement Excellence
Business will not achieve procurement excellence without strong leaders.
Leaders do not succeed in isolation.
A tree will not survive the storm, if it does not have strong roots. It may suffer damage from bad weather but if the foundations are strong, the tree will recover.
Same with your procurement leaders.
Procurement excellence demands strong leaders. Leaders grow and develop better leadership skills when mentored and supported.
Where people are shoved into procurement without proper training, skills and understanding there will be no excellence. Even worse, it is really not good for that person’s personal development or mental wellbeing.
#2. Set clear objectives, strategy and goals
Really start with the end in mind.
What is the all round balanced success you want your procurement team to deliver?
Too often in procurement, we get stuck in the doing, managing the transactions and ticking the boxes.
Set the direction, but allow your procurement leaders to take ownership for delivering results. Support your procurement leaders and teams with mentoring and coaching.
#3. Foster the building of balanced relationships
Good, solid business relationships lead to solutions that benefit both the buyer and the seller.
Business cannot operate in insolvent conditions – yet, many larger organisations still have payment terms that are extensive or want pricing that equates to unfair trading conditions.
Procurement excellence is built upon balanced and fair relationships and the creation of solutions that benefit both parties.
Balanced relationships will deliver all round business success.
#4. Ruthlessly break down the barriers to procurement in order to achieve procurement excellence
Yes, we know you cannot speak to every supplier that wants to pitch their business solutions.
But why not have an open day – with an open mind?
See what is happening in the world outside your closed door?
Success in procurement relies on the ability of the procurement leaders to break down the barriers that have so conveniently been put up over time.
#5. Nurture discretion and judgement
Procurement is one of those areas where automation and artificial intelligence will remove a lot of the slog and transactional stuff that procurement surround itself with. Thank goodness for that too!
Therefore, we do need to teach our procurement teams to:
- become more aware,
- work out the what’s and why’s of what is happening,
- be able to interpret trends and
- apply sound judgment to decisions
- in where we can really make a difference.
But if your people do not even know what is happening in the world of innovation and technology, how will they adapt and be ready for the change? How will they be able to apply discretion and sound judgement?
#6. Make a start, dare to be procurement excellence leaders and outcomes will follow
Too often, procurement leaders get bogged down by the daily slog.
We measure productivity in how busy we seem and not the outcomes we achieve. To do this, there will be an outcome?
But will you be able to call it procurement excellence? Well, maybe only if you are born under a lucky star.
Push your procurement teams and leaders to work towards business and procurement excellence. Support and foster their efforts.
Procurement excellence takes time.
To sum this all up – procurement excellence is making the time to foster a culture of procurement excellence in order to build all round business success.
You do this through relentlessly developing, fostering and nurturing:
- The right culture;
- Procurement leaders with vision;
- Strong leadership;
- Clear objectives, strategies and goals;
- Understanding the importance of building commercially sustainable relationships;
- Courage to break down barriers;
- Patience, perseverance and sometimes just a sense of humour.