Six Steps to Lead Procurement to the Next Level
As a procurement leader, I have first hand experience of the challenges facing procurement in an ever evolving, dynamic and demanding business environment. With ongoing redundancies and very lean procurement organisations, the strain is more evident. As a procurement leader, the requirement to succeed and to perform better constantly increases. Our objective is to empower more procurement managers to disrupt their world from within in order to unlock value for their organisation and their customers. Our procurement leadership packages focus on improving procurement leadership and building procurement intelligent teams. Below are our six steps to lead procurement to the next level.
Disruption starts with the PEOPLE not with systems and technology.
What is the definition of a leader?
There are many but here are a few of my favourites.
“The only definition of a leader is someone who has followers.” Peter Drucker
“Leadership is the capacity to translate vision into reality.” Warren Bennis
“Leaders will be those who empower others.” Bill Gates
Six Steps to Lead Procurement to the Next Level
Our six steps to lead procurement to the next level details in simple terms how procurement leaders:
- Start with people not with the systems and technology
- Make time to plan for results
- Understand the business market position and understand what final customers need.
- Understand what innovation is and how to source for innovation
- Collaborate and build relationships through communication and conversation
- Apply the 20-60-20 rule
#1. To Lead Procurement starts with people not with systems or technology
Motivated teams outperform the best systems and technology.
Motivated teams find solutions, are agile and consequently able to adapt to change.
Yes, we are developing behaviour based (or should we rather say “behaviour inspired?”) technology but without an understanding of people behaviours, the technology cannot mimic the behaviour of people. People are core to finding solutions.
Procurement leaders inspire teams to use their imagination and think outside the tick box.
Let’s be honest, procurement can be a pretty boring place at times and therefore time to be creative and think outside the tick box will contribute significantly to building team motivation. Make time not only for work but to play and be creative. You will be surprised at the results your team will achieve.
#2. Procurement Leaders Make Time to plan for Results
Unfortunately this is one area that can be challenging to lead procurement teams. I remember the days when the best laid plan left the building even before I got to work. Therefore I also know how important it is to have a plan that is focused on results and outcomes.
Business culture is very important. In a culture where there is only short term focus, finding time to plan for results can be difficult.
However, it is critical to make time to plan for results and determine priorities and keep your teams focused on results not transactions.
Knowing the end-game, helps procurement leaders to focus the fires that require fighting. It therefore helps with being able to push back where required.
#3. Procurement Leaders understand their market position the needs of external end customers
This is one area where most procurement teams tend to carry blinkers; they do not know who the end customers are or what they need.
Procurement cannot function in its own silo but needs to understand the full business picture.
Knowing what your end product looks like and who is using it and why is really critical to determine what to source. In procurement, we often focus on the requirements of internal customers (and rightly so); but when we look at the full picture, we will be better equipped to source what is really needed rather than just having an internal focus.
Procurement’s sourcing strategy must firstly start with the end-customer’s needs in mind.
#4. Procurement Leaders understand what innovation is and how to source innovation
Innovation and procurement rules apparently do not go hand-in-hand.
The world of entrepreneurs and innovation often gets perceived to be a reckless, risky world where no rules apply. However that is not always the case. Often entrepreneurs have worked in large businesses and as a result know the rules and procurement requirements.
Business benefits from working with entrepreneurs as a method to source innovative solutions. Entrepreneurs can move faster than big business to implement business changes. Entrepreneurs focus on customer needs and meeting customer expectation and work to connect business solutions to customers.
Procurement leaders find ways to connect with innovative suppliers to source innovative solutions.
It has been and can be done within existing procurement frameworks when treated as a project with milestones and managing risk.
#5. Procurement leaders collaborate and build relationships through communication and conversation
Procurement leaders need to facilitate communication and conversation to understand the issues at stake.
Communication is a two-way process but in our opinion, the area where we can make the most impact is in the area of active listening and asking the right questions.
The benefits of listening are numerous, but here are only a few benefits related to listening:
- reducing misunderstanding and miscommunication;
- solving problems;
- expand knowledge and understanding;
- improve negotiations; and finally
- earns respect and recognition of what the other party has to say.
Listening helps to clarify the issues and therefore be able to source to find solutions.
#6. Procurement leaders apply the 20-60-20 rule
The 20-60-20 rule is a slight variation of the old 20-80 rule.
Focusing on the key 20% that would make 80% difference is the first step. But the 20% generally requires lots of hard work, take time to implement and therefore can be demoralising at times.
The difference between 20-60-20 and 20-80 is that the first takes into the consideration not only the major items but considers low hanging fruit. Low hanging fruit are easy to implement and will deliver some quick results. Results can be celebrated. Celebrating results improves team motivation.
Ultimately, motivated teams deliver results.
Thus all the more reason to include low hanging fruit as part of the step to lead procurement and take your leadership to the next level.
Become a procurement leader that inspires and lead procurement
Leadership starts with people. Leading people can be tricky but true leaders will persist. For us it is important to motivate and empower procurement leaders to succeed and excel.
Apply our six steps to lead procurement and take your leadership to the next level – become a procurement leader that not only translates vision into reality and results but also empower your team and others to deliver business results.
In conclusion, be a procurement leader who inspires followers.
To learn more about our procurement leadership packages, please click here.
Celia Jordaan is a procurement and risk consultant at Ichiban Commercial Solutions, Perth Western Australia. With over 20 years experience, Celia has worked in different countries, locations and cultures in the areas of procurement, supply chain, contract management, law and risk. She has also worked in the area of risk management, contractor management and safety.
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