Posted 6th Mar
It is common sense to say that businesses buy goods and services so they can extend the range of their production, technical and professional capabilities. How well these things are obtained determines how successfully they can compete with others and indeed, in some cases, whether they can continue their operations at all. It stands to reason then, that buying things well is important, particularly when it comes to more strategic categories of spend; and that the way to get great results for your business is to approach procurement activity as a cross-functional team where all business interests are properly represented and collectively managed.
The question is how best to go about this. All good leaders know that key to success in any enterprise is getting the balance right between high level inspirational goals which create the desired direction of travel and more detailed goals which spell out who is doing what and how they will be measured. It is no different when it comes to buying things. The challenge is how to set objectives which integrate commercial and technical roles to create a single business entity, striving to achieve collectively held goals and facing into the market ready to deal with suppliers using ‘one’ voice, rather than the all too common ‘many’.
This is where Future Purchasing’s tried and tested approach to agreeing objectives for category management comes into its own. The spotlight is very much on procurement as a cross-functional business activity rather than a separate functional one. Objective setting occurs at three levels, each of which integrates stakeholders in other functions.
Future Purchasing’s three level approach underlines the interdependency of the project team: that members need to work together for mutual (i.e. business) gain. Innovation and value are born of people pulling together to deal with tensions that arise as they explore how best to handle conflicting business priorities. Far better to do this than covertly to pull in different directions and risk pulling things apart (not just internally but also potentially with any commercially engaged suppliers).
In summary, the approach to objective setting described above provides a powerful framework for generating and implementing meaningful cross-functional goals at all levels. It empowers teams to be innovative and sends a clear message that they are together accountable for finding ways to achieve a range of business goals simultaneously, as opposed to functional ones independently. And more than that, it is proven to provide a practical mechanism for delivering the right results in a way which supports ongoing business success.
If you are interested to read more about this subject, you will find our full conclusions and recommendations on page 53 of the 2016-17 Category Management Leadership Survey. And as ever, if you have any comments, please write to us in the section below. We are always keen to hear about your thoughts and experiences.