Ready, Steady, Go! Setting Objectives That Fire Up Your Business Teams

Posted 6th Mar

If I told you that 80% of organisations have yet to implement the truly effective goal setting that will allow them to get the best from their procurements, you might well raise an eyebrow.  However, this is exactly the conclusion we can draw from Future Purchasing’s latest global category management survey. Analysis of responses, from the 323 firms that took part, leads us to conclude that most of them miss a trick by adopting a laissez-faire attitude to cross-functional working rather than proactively encouraging it to happen by setting the right kinds of objectives.
 

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. 

  • First, hooking into the annual planning or budgeting cycles, procurement leaders liaise with their executive counterparts in other areas of the business to explore at a high level how additional value from the supply chain might help them meet their functional targets. The aim is for all parties to identify jointly shared objectives which at this stage are likely to be aspirational in nature. The intention is to inspire creative and ambitious thinking rather than to prematurely narrow peoples’ focus. 
  • Second , as these superordinate goals are cascaded down, the stage is set for annual category planning whose purpose is to harness the energy and business knowledge of cross-functional project teams. Working together, sleeves rolled up, these teams generate ideas and potential projects targeted at delivering a broad range of commercial and tangible outcomes. While at this stage they won’t necessarily know exactly ‘how’, they should be developing a strong sense of shared purpose and ambition; the driving force for any team. To focus activity and resources over the next one to three years, teams select priority projects and, for each, agree a balanced scorecard of objectives which addresses goals for all functional areas. The idea is that everyone has a clear view of what they are working towards, can plan and commit resources and, importantly, can see compelling reasons to do so. 
  • Third, to promote joint accountability, these functional goals need to be translated into personal objectives for both procurement and stakeholder team members at executive and operational levels. The trick is to put teamwork at the heart of these objectives. This way you create the impetus for people to be collectively creative, seeking solutions from a business, rather than purely functional, perspective. In support of this, and to unlock the true power of teams, leadership actively needs to discourage the achievement of one set of functional goals at the expense of others, unless, of course, there has been an explicit team decision-making process to this effect.

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.


Tagged by topic: Business & Stakeholder Engagement , Category Group Planning , Category Management , Category Management Survey , Procurement Leadership

  by Kathrine Western

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