SCDigest Editorial Staff

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It can be hard to attract talented people into procurement, so once you have recruited capable people you must do everything to retain them. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Procurement continues to get increased corporate attention, with an increasing number of companies looking to strengthen and centralize procurement operations. Just one of the latest is consumer products giant Kimberly-Clark, which said last week it expects to reduced supply chain costs by as much as $500 million in the next three years by creating a centralized procurement function.

With those kinds of moves generally comes an elevation in the role of the procurement leader, whether that includes a formal chief procurement officer (CPO) title or not. Clearly, procurement executives are being asked to elevate their games in hundreds of companies.

What are some keys to success?

Stephen Wills, director of group procurement at the UK’s Axa Group, recently offered this list of CPO Dos and Don’ts, in the UK’s CPO Agenda magazine, which we think are well worth sharing. They are good enough, in fact, that they can stand without any real need for comment.

The Dos:

Put a Man on the Moon: As a leader, you need a clear vision of where you want to take the function. Articulate what success looks like: this can be done with a road map image that helps everyone to understand how as a team they reach the destination.

Build your Vision on Solid Foundations: When setting out a vision, use objectives at its foundations. Make sure these are always specific, measurable, achievable, realistic and timely. These metrics should include: should include: high savings delivery per buyer; high compliance with the process; full coverage in all areas of spend; improved new savings each year.

Be a Business Function: When you are CPO, it is important to develop strong stakeholder engagement across the business. By building these relationships, you ensure that full spend is under procurement’s influence in order to deliver results.

Develop your Capabilities:  As well as setting stretching objectives, the CPO role should include providing a personal development plan (PDP) to each of your employees that agrees the areas where they need to improve. Personal development is crucial for procurement staff to advance beyond their core expertise and develop their soft and business skills, making them more commercially aware.

Always Deliver on your Promises:  It is very easy to over commit and then not deliver on those targets. If you are going to be effective in delivering your vision and objectives, you must be consistent and seen within the business as trustworthy.  Being reliable is a basic leadership trait but it can differentiate you from others.

Communicate: In many businesses, procurement professionals are the unsung heroes. At Axa, the staff knows what is happening and where procurement is going through a variety of communications. This keeps everyone informed from a business, procurement and personal perspective.

Provide Recognition: It can be hard to attract talented people into procurement, so once you have recruited capable people you must do everything to retain them.  In addition to the “hygiene factors” (which reduce motivation if they’re absent, such as working conditions or job security), provide powerful recognition tools to motivate and retain employees.

Lead from the Front: Adopt a visible and high-profile leadership style, which sets the tone for how you expect your team to behave and what you consider to be acceptable values and behaviors.

Trust your People: For procurement to deliver what you intend it to, you have to trust the people in your team and empower them. In addition to agreed objectives and a capability improvement program, you also
have to allow people to make mistakes without the risk of criticism, which can be a challenge.

Broaden your Expertise: When working cross-functionally, your team must have a broader expertise than simply being procurement experts. This broader capability helps to find points of entry into the business.

(Sourcing and Procurement Article - Continued Below)

The Don’ts

Overpromise: Procurement is still maturing and gaining awareness, so it needs ambassadors. As you want people in business to trust your team, be careful not to overpromise as this would reduce their trust in us.

Overreact: Procurement faces many challenges and frustrations. One of the most common is the business failing to comply with the preferred suppliers that are approved by procurement. The familiar comment that “we have chosen a new vendor but we just need procurement to sign the contract”  springs to mind. Respond with facts rather than emotions in these kinds of situations.

Limit your Ambitions: No one likes doing the routine aspects of their job but they are the foundations of what procurement does. But the CPO is also a change agent. Procurement provides the business with a competitive advantage so raise your ambitions beyond business as usual to make the function become more business relevant.

Miss an Opportunity: When you are in front of the board or a stakeholder, it can sometimes be under difficult circumstances. However, you want senior management to know about procurement so you should still see that sort of situation as an opportunity to sell the value of procurement.

Spread yourself too Thin: Focus on the big priorities and don’t try to think about everything. Your key objectives and priorities need your full commitment so thinking anything less than that is good enough is not being a leader.

Wish for a Quiet Life: Not every one understands procurement’s contribution to the business. As a leader you should be evangelical about procurement and what we do.

Ignore the Power of Networking Events: You should be ethical and selective about the networking events that you attend. However, it is worth remembering that however strong your policies and process are, business is being discussed at these events and they can provide a rich network of advice and ideas.

Ignore Talent: Have succession plans in place and bring new talent through your team – not least because you should enjoy developing talent and realizing people’s full potential. In helping people to achieve their potential, you can’t spend time looking over your shoulder to see whether someone wants your job. As a leader, you need rising talent in your team to help procurement to progress and to convince the business that your function can continue if you move on.

Miss your key Results: Always deliver the priorities while pushing your function towards world class. Your business is relying on you to hit the targets that you, as the CPO, said you would. How procurement delivers the results is as important as the results themselves.

Be Arrogant: Be confident but being overconfident tips easily into arrogance, so humility is always the preferred style as a leader.

This is a fine list that is also largely transferrable to leadership in overall supply chain, logistics, etc. as well.

What do you think of Wills’ list of CPO Dos and Don’ts? Anything to add? Let us know your thoughts at the Feedback button below.