Seven Procurement Sins and How to Navigate Murky Waters
The seven deadly sins originated a long time ago with the desert fathers. They identified seven or eight evil thoughts or spirits that one needed to overcome. The church used the doctrine of the deadly sins to steer people away from evil before anything bad could happen. Question is – what are the procurement sins and how can we navigate the murky waters of procurement to avoid dire consequences?
Seven deadly sins
The desert fathers and mothers were some wise monks, hermits and nuns living in the desert around third century AD. They chose a simple life, renouncing all the pleasures of the senses. Their wisdoms were collated into the Sayings of the Desert Fathers.
A quick reminder of the seven cardinal deadly sins:
Seven Procurement Sins
Working in procurement is a really interesting and challenging environment. Procurement often influences anything between 40% and 60% of business spending.
When times get tough, procurement faces the challenge of finding cost savings and improving bottom line business performance.
Sitting on the “right” side of the table, holding the power over contract award can be quite rewarding. Different people have different styles. And yet different people have different “sins”.
So, what are the seven procurement sins?
#1. Pride and Arrogance
I call this “fat cat” syndrome and there are unfortunately too many fat cats in the procurement world. People who do not care to build good relationships because they are of the opinion that they hold the power and the purse strings.
These are the people who take more than they need and often place contractors and suppliers in an untenable and unsustainable position. Greed is often fired on by performance targets and linked bonuses. Short term focus with little regard for the long term, total cost of ownership or sustainability.
#3. Know it All
Have you ever been to a meeting where you don’t get a word in and even if you did or you are spoken down to? The procurement officer knows everything about anything, including your business?
Knowledge is power but learning is growth.
Often those who pretend to know everything, are blind to learning and thus fails to grow.
#4. Poor Communication
When people are poor listeners, it is problematic.
When facing closed doors, communication is impossible.
Poor communication is a sin when procurement people hide behind paperwork, process or just bluntly ignore requests for communication with suppliers and contractors.
Procurement provides a service to business. It’s purpose is to manage the end-to-end procurement lifecycle requirements in order to provide the best total cost of ownership and to enable business growth.
Thus, agility is key in achieving the best total cost of ownership outcomes that will enable business growth.
Sluggishness slows down business and dampens growth.
Over the past years, in many industries the focus was on cost-cutting and cost savings. In some industries, there had been fat margins and some level of cleansing was required.
When margin cleansing happens, it is good. However, when cleansing happens only to increase already fat margins on the other side of the playing field, then it is plain old moneygrubbing.
Total cost of ownership focuses on so much more than just the lowest price or the biggest cost saving. It does not focus on short-term gain only but looks at the total picture over the longer term.
The Collins dictionary defines effrontery as behaviour that is bold, rude or disrespectful.
Effrontery is about attitude – an attitude of not cooperating, not building relationships and bad manners.
Effrontery sums up the procurement sins nicely.
Navigating Murky Waters
Now, let me make it clear.
There are some amazing people working in procurement. People who understand their role and the value they bring to their internal and external customers. People who enable business growth.
However as in any industry, within procurement we do have people who have too much of the following:
- Pride and Arrogance;
- A know it all attitude;
- Poor communication skills;
- Sluggish and slow;
- Moneygrubbing and short term focus;
- Disrespectful attitude.
Dealing with people who behaves in this manner can be hard and will make it difficult to make progress.
A few tips for navigating murky waters
Decide whether this behaviour represents the culture within the organisation or is limited to certain individuals. If it is a localised problem, then find a work around or escalate the problem.
When it is an organisational problem, then decide if you really need the business.
Simplest recommendation is to recognise that building relationships take time and that within an organisation, although procurement may be the ones being responsible for procurement, the real relationships are build within the operation. You have to find the right allies within the organisation.
Remember the old saying
If you can’t beat them, join them..
Well, I am not talking about behaving in the same manner. No, but what often helps is a lit bit of BS baffling so-called brains. Let people who want to talk, talk. Ask more questions.
Because you will gather business intelligence.
Quantify value for money in real terms
Many suppliers and contractors provide excellent goods and services. But find it difficult to quantify how they add value or how their particular solution provides value for money as a total cost of ownership solution.
How can you change this?
translating what you do in procurement speak and
quantifying how it adds value from a total cost of ownership perspective.
Because when you are able to do this, you will be able to break down barriers.
And if you don’t, then my serious recommendation is to walk away as you are wasting your valuable time.
Get help with navigating procurement sins
Sometimes all you need, is a few tips and tricks to navigate stormy waters.
Feel free to contact us if you need help with demonstrating value for money or improving your procurement proficiency.
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.
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.
Have a great day!
Celia Jordaan has 22 years international and corporate experience and worked in the areas of procurement, tenders, supply chain, contract management, law and risk. She works with business, procurement leaders and teams to develop and implement strategies to boost business performance, make tendering easy and improve bottom line performance.
To learn more about Celia Jordaan, please click here.