How to Get the Whole Business Behind Procurement
In our profession, CPOs dream about what might be achieved if the whole business was on-board with procurement: 100% spend compliance, more budget for procurement initiatives, achieving a company-wide cost-conscious culture… in short, having everyone on-side would create the conditions needed to get things done.
But it isn’t that easy. Cost leaders who want to get the business behind procurement will know that the leadership team and other stakeholders tend to fall into three camps:
With procurement: The people who understand and see the value in working with procurement and can be counted upon to embrace procurement initiatives.
Neutral: Stakeholders who have little knowledge of procurement or fail to see its value and relevance to what they do.
Against procurement: Stakeholders (often who have had a negative experience with procurement) who regard the function as an annoyance or a blocker that hampers their efforts.
In net promoter theory, these three groups are known as promoters, passives, and detractors. It’s up to procurement professionals to keep promoters in the business on-side, convert passives into promoters, and try to convert detractors into passives (if not into promoters as well).
How can we do this? Through increased visibility, education, better communication, focusing on enablement over punishment, and showing the value beyond money.
If a stakeholder has no firm opinion about procurement, it’s probably because they’re simply unaware of the function and its purpose. When they make a purchase such as booking a business flight, there’s a risk that they’ll default to using their favorite booking site rather than going through the corporate portal because they don’t know what the process is.
Procurement can increase its visibility by marketing itself to the company. This may involve creating brochures that answer common procurement questions (how do I book a flight?) or explaining the benefits of an upcoming change. Use a multi-platform approach to capturing the attention of your audience – email campaigns, wall posters, posts on the company intranet, lunch-hour information sessions; whatever works in your business context. Procurement is no longer a back-office function, so the whole team should make an effort to get away from their desks and visit their stakeholders in every function around the building. In other words, be visible.
If you were to stop a random colleague in the corridor and ask them what they think procurement does, there’s a good chance that they won’t have an intelligent answer. As part of your visibility campaign, it’s therefore important to start with the basics and provide an answer to the most common question of all: what is procurement?
Focus on outcomes rather than processes: show people what procurement can achieve, rather than how you achieve it, because no-one outside of the function is interested in terms like “spend management” or “RFQs”. This is also a golden opportunity to educate others on the common misconception that procurement is solely about cost savings. Communicate the value beyond costs, such as risk reduction, social procurement and environmental benefits. It’s not just about the money!
Speak the language of the business
Stakeholders won’t be able to get behind procurement if they can’t understand what we’re talking about. While procurement jargon has its place, it’s an immediate turn-off when talking to stakeholders who can’t understand your acronyms. Procurement professionals should be able to speak:
The language of procurement: useful for communicating within the procurement and supply management ecosystem, and comes in handy at industry conferences.
The language of the key functions you work with: if you work with marketers or engineers, you should be able to speak their language. Immerse yourself in other functions to pick up the key terms and understand their priorities and concerns.
No matter what your role is, it’s helpful to have a basic understanding of Finance terminology (this will demonstrate that you have business acumen).
Most importantly, the lingua franca of your business, which will be based on enterprise-level goals, targets and values.
Don’t be spend police
As mentioned earlier, detractors are usually against procurement because they’ve had a negative experience with the “spend police”. They may have been working on an important initiative for months only for it to be scuttled by procurement policy. Detractors will not only damage your efforts to demonstrate the value of procurement but will do their utmost to work around you or engage with you only grudgingly and at the last-possible moment.
While taking on the role of spend police can get results as you chase down mavericks one by one, it is extremely time-consuming and creates a trail of angry detractors in your wake. Focus instead on being an enabler, and using procurement technology to make it as easy as possible for end-users to comply with procurement policy.
Show stakeholders what’s in it for them
This is change-management 101. When trying to bring people on-board with procurement, it’s no good appealing to their sense of corporate duty or love of good policy. You need to discover your key stakeholders’ priorities, find out what’s keeping them awake at night, then show them how procurement can help address their challenges or achieve their goals. This might involve removing costs from their bottom line, decreasing the risk of doing business, or simply making it easier to book a business flight.