Take 5 to Improve the Performance of your Procurement Team
How is your procurement team performing? Superstars, average cruisers or missing in action?
What is the perception in your business on the value or lack of value your procurement team adds to the overall performance and success of the business?
Why is anyone using the procurement team?
Because they have to and are forced to use the procurement team or because they want to use them?
When last have you stopped to do a take five and complete a health check on your procurement team?
The conflicting role of your procurement team
Procurement professionals often find it difficult to quantify their value and the value they add to business.
The value of procurement is so much more than just the cost savings that make an impact on your business bottom line. In many businesses, the cost of buying make up a significant portion of the overall cost of a business. Therefore you need to have a procurement team on board that can act as trusted advisors, change agents and superstars for the business.
Your procurement team has the responsibility to:
- negotiate the best deal,
- in the most adaptable, agile and innovative manner,
- whilst not keeping anyone up with the paperwork or approvals necessary to ensure compliance, and
- still build win-win relationships to ensure that business will continue to tick along when things do go wrong,
- but then also be the ones that ask for cost savings, time and time again.
Let’s not forget about delivering customer service along the way too.
Procurement as a role can be quite conflicting and complex whilst trying to balance the scales (and deliver cost savings).
The role requires:
- compliance and alignment with your overall business requirements,
- delivering contract outcomes,
- building relationships,
- enabling the smooth running of the business,
- acting on many last minute reactive requests,
- but also continuously look at improvements and cost savings.
Thus the requirements of the procurement function can create this yo-yo situation trying to deliver the best outcomes in a sustainable manner.
This yo-yo makes it tough for procurement to do what it is meant to do and in the manner it is meant to be done.
The perception around procurement
The perceptions around procurement and how it is to deal with procurement often can be quite negative.
Procurement is perceived to be:
- difficult to deal with;
- placing obstacles in the way to getting things done;
- not understanding business and how business works;
- making life difficult for those who really have to keep the business running; and
- constantly be pushing paperwork and process under your nose.
Because procurement is perceived to be difficult to deal with, some even admit to find workarounds for avoiding having to deal with the procurement team.
In government it is even worse – procurement teams are locked away behind the iron wall of process and procedure. “Procurement” hides behind this shroud of obscurity.
In short – procurement is often perceived to be “hard work” and best to be avoided at all cost!
Let’s be fair to your procurement team
Procurement has a role to play in the success or failure of any business.
As with any role and delegation of responsibility and authority, the role of your procurement team come with a framework within which procurement is bound to operate.
A procurement framework that everyone has to play within.
We can call it playground rules if you like.
The reality is that procurement can be effective and deliver results, if they have the opportunity to:
- be part of the business team;
- have a say, be listened to and be heard;
- not always have to justify or explain the business rules and boundaries – because it is what it is – whether we debate it for an hour or not;
- be part of the planning process and not just be the ones to “get stuff done” because your other team members failed to plan properly;
- don’t get the blame for things going wrong when it was really your lack of planning or insufficient scoping ; and
- be recognised when they do great work.
Most people in procurement genuinely want to make a difference and add value.
So, how can you improve the performance of your procurement team?
Take 5 for your procurement team
1) Remember the basics of risk management
When we teach people about risk management and the reason why you do a take five risk assessment, we teach them to:
- step back,
- take five minutes and
- consider their environment to see if there are any hazards or risks.
With a Take Five, we step back to look up, down, wide and deep – we look beyond what is right in front of us. We also step back when there is a change to assess the change on the same basis.
In the truest sense of risk management, one would also look for opportunities and assess the risks around opportunities.
Unfortunately in the life of procurement, we get stuck in the transactional and day-to-day firefighting. There is little time to step back, stop and take five to either examine the hazards and risks or see the opportunities. Often there is no time to stop and assess any changes as we have already moved on to fight the next biggest, reactive fire.
It makes sense to allow procurement to take five on a daily basis.
Thus by making sure that every day, we take five minutes to:
- step back,
- plan and
you will see immediate results and improvement in your procurement team’s performance.
Your procurement team will assess any risks relating to procurement, determine if there are any changes and importantly spot the opportunities for improvement.
2) Improve communication
We may all use the same words or language, but we certainly do not speak the same language.
In procurement, we often use terms and acronyms that no-one else really understands.
To really make a difference, we need to allow procurement to learn the business but also allow procurement an opportunity to educate those who they serve, on the language and meaning of procurement.
Procurement teams who communicate well and form an integral part of the overall business teams, do well and deliver value for money to your organisation.
We build relationships but having good communication and through building trust.
Building sustainable, balanced relationships takes time.
Therefore by allowing your procurement team to educate and learn to improve their communication, you will see definite improvement in understanding and therefore business results. Supporting your procurement team with mentoring and coaching on how to improve their communications and get a better understanding of how business works, will improve outcomes significantly.
3) Provide opportunity for growth and learning
One of the biggest obstacles to the performance and success of your procurement teams, is lowering the level at which they operate on:
- by swamping them with antiquated processes and paperwork,
- thus limiting the time they have available to learn and grow and
- therefore then can be able to bring back more effective ways
- to improve what your procurement team does and why they do it.
A great opportunity for learning happens when your procurement team networks and learns from their peers in procurement.
It is an area that requires relative low investment and has a great return – yet, many companies still bury their people in transactions and paperwork and see this valuable process as a waste of time.
Also, if you want to raise the bar of their performance – expose your procurement team and your procurement leaders to those leaders who have done it before.
Success breeds success. Success breeds business that survive and thrive more than 100 years.
Let your procurement team learn from and be inspired from the journey of success.
If you don’t know what success looks like and you did not benchmark your performance, how can you improve your procurement performance?
4) Expose your procurement team to innovation
I recently attended a procurement networking meeting and nearly fell off my chair when little was said about leadership and a lot was discussed about implementing a new ERP system.
How can companies still be battling with implementing ERP systems in the days of blockchain, bitcoin, virtual reality and real time transactions?
What will you do when your competitors use blockchain as part of their procurement??
It made me realise that there is a massive gap in procurement leadership.
We can do so much more to move away from the antiquated leadership styles and embrace and implement procurement intelligence.
As chief judge for the WAITTA Incite awards, I have the privilege to learn about many disruptive innovations.
Yet, even although this is a great foundation for being able to procure innovation – I saw no-one else from procurement.
Maybe because we are so busy chasing paperwork?
How can we expect procurement to procure innovation or procure innovatively by letting them be stuck behind their desks pushing paper??
The future of procurement is in the hands of those who can not only procure innovation but can innovatively procure.
However, innovation does not come to those who wait….
5) Back your procurement team
Do not let your procurement team get lost between the cracks or stick them somewhere out at the back where they are invisible.
No, pull your procurement team into your meetings, make them part of an integrated team and back them up.
In a perfect world, everything goes to plan. In the reality of life, we learn from those who experience but also from fixing up mistakes. Often opportunity or innovation is born from accidental mishaps.
It is important to give procurement a voice and be clear about their role, responsibility and expectations for performance.
You do not expect a carpenter to build a chair without wood and the right tools. Why would you expect your procurement to perform if you do not provide them with the right tools, skills and experience and back up along the way. Or if you fail to listen to what they have to say?
Procurement teams that are:
- recognised for their contribution to success and
- have a voice
perform far better than procurement teams that:
- function only as a post box and gatekeeper
- get stuck in the corner with no voice or recognition.
The importance of procurement health check and benchmarking
Only one in every five procurement teams is a high performance procurement team.
Most procurement teams play somewhere in the middle and “break-even” in terms of what it costs to run the team.
A significant number of teams unfortunately cost more than what they contribute to the success of a procurement team.
To kickstart your procurement teams’ performance, it is a good idea to start with a benchmark and health check.
When last did you complete a health check on your procurement team?
We have worked in procurement on both sides of the fence and know what it takes to make procurement work. We think it is exciting times ahead for those brave enough to change the way procurement is done.
Fresh eyes look at old problems in new ways. Our health check does the same. We work with your team to work out where they are as individuals and as a team. And we have a bit of fun along the way too.
Contact Ichiban today to work with your procurement leaders, current and upcoming, to transform your procurement team to raise the bar. We work with your teams to do a health check and benchmark current performance, mentor procurement leaders and coach procurement teams.
For more information on our procurement leadership packages, click here.