For many years the procurement community has been talking about how it's about to get a seat at the board, yet somehow it hasnt got there yet - why?
In our previous post we defined leadership as 'organising a group of people to achieve a common goal' Wikipedia. If the first part of leadership's definition is the who, then the second part of the definition, (to achieve a common goal), is the what, when and how.
Tim Cummins, during a recent interview, proposes "I dont think that the head of procurement is really going forward and trying to transform the understanding (from a finance perspective) about the need for change and the nature of that change. I think there are areas, for example, to educate the finance community about supply chain risk, getting your CFO to understand that there is a cost associated with low prices, and that cost is often in terms of the trust, reliability, the flexibility and quality of the supply base".
The key to all this is communication, but more than just talking - showing that you really understand the business (your internal customers) drivers, inhibitors and inertias and working with the relevant stakeholders to achieve their goals. This can only be done by:
- Understanding stakeholders needs and drivers: What are they trying to achieve and what are their pressures?
- Understanding perceptions of yourself / your department: How can you change something if you don't know what needs to be changed?
- Aligning goals and objectives: Ensuring you are both aiming for the same target - letting your stakeholders know you are here to help not hinder.
- Talking in their language: Stop talking procurement and start talking in a language your stakeholders can relate to (example, CFOs are interest in hard savings, risk management and spend control - not how your SRM program works)
In closing, I refer to my discussion with Tim Cummins again, in which I believe he eloquently sums up what procurement needs in order to become a great leader within business today:
"It takes a level of courage for the CPO to step forward and to seek to take on that bigger remit. I think for many CPOs it's a concern about whether they have the right tools and systems; do they have the right skill sets within their organisation to actually take on the challenge that sits in front of them today? I do understand that hesitation, but on the other hand we never really get anywhere much if we dont have courage".
In your opinion, what else does procurement need to do in order to be seen as a business leader?
*Click here to read the complete interview with Tim Cummins, President for the International Association for Contract and Commercial Management (IACCM)Proxima Group