Throughout my career across many corporates both as employee and then advisor, what has continuously resonated is the simple inability of many buyers and senior procurement professionals to promote the value they bring to the business. I often hear disgruntled individuals saying things like “if only we had a penny for every pound we saved” as a bonus. Really? Such statements, and they are common, demonstrate to me some fundamental flaws in their thinking, i.e. haven’t other stakeholders within the business been instrumental in making this project successful?
How exactly are you capturing the benefit and is this recognised by the CEO/CFO in the bottom-line (many surveys continuously reveal a gap between procurement savings v those accepted by the business), and, isn’t that what you are paid to do, it is your profession? The parallel is then made to sellers who often earn commission structures based upon how much they sell in the belief the two roles are essentially the same. Ask any CEO what they would prefer – a highly talented seller able to open doors into new markets, nurture existing relationships to upsell more work and get referrals or whether they want to invest on a like/like basis on a highly talented procurement professional able to optimise the margin made from the seller, hopefully nurture the supplier relationship to derive latent value and contract appropriately to mitigate risk. I am sure most CEOs want both, but, the horse must go before the cart and the sale must be made, otherwise there is no business for the procurement professional to make the savings.
The time for buyers to adopt seller behaviours has never been so resounding. Here are just a few reasons:
CPOs are taking their place within boards globally, interestingly, there is a trend for these individuals to have backgrounds that are not purely procurement, but also from a sales background because they are able to create and build enduring relationships and know how to navigate around a business
Technology is making strategic sourcing a routine and mechanistic process, meaning buyers will have more time to talk to stakeholders to understand needs and to be generally externally facing seeking out market intelligence and talking to people. Buyers who sit in offices and rarely visit suppliers are simply missing golden opportunities to capture process improvements that many businesses so desperately need. Like a seller, they need to hit the tarmac!
Category solutions for complex areas will involve the need to make fundamental changes within the business – perhaps invest/sell assets, relocate, drive more down the supply chain and outsource. Many buyers struggle with the internal “sell” to the board, whereas those with backgrounds in selling are more adept at anticipating the objections, the leave room for movement, and know how to avoid conflict that arises from inflated egos and the contest of will that often occurs
The value proposition continuously purports solely to procurement saving money and buyer cheaper. The “selling” dynamic of all other aspects remains a whisper in many board rooms and is championed by other functions, simply because procurement have failed to capture, document and then accurately report all benefits that hit both the top and the bottom line.
Author: Mike Utting & David Wightman