Building team strength in procurement
By Mark Hubbard |
The global category management report produced by Future Purchasing explores, amongst many other areas, the essential role of leadership and team capability when seeking to deliver excellence in procurement.
Leadership and building team strength in procurement
How do you build your teams strengths in procurement ?
Over the years of publication of the report, we have explored many of the detailed findings in more depth. One of those is the features of leadership and team capability necessary to ensure the organisational changes we seek to have the greatest chance of success and sustainability.
One aspect of this, expressed by a wide range of collaborators, is on their organisations’ future capabilities.
They regard functional, technical competence in procurement as no more than a minimum necessary requirement for success. Leadership, internal persuasion, relationship management, innovation, change management, and effective design of significant programmes and initiatives are considered the top priorities for ongoing organisational and team development (Figures 1 and 2)
Enablers & levers of transformation
They also believe that if procurement is to maintain its progress and properly support organisations in their quest for value capture from third party suppliers, then a number of “clusters” of enablers and levers of transformation will be required, particularly mainboard and executive sponsorship, structural change in business reporting, organisational and strategic alignment and organisational recognition and stakeholder engagement.
Understanding how each of these areas is working in your organisation, and developing a change program from that understanding, is critical to addressing the need for development in these areas.
Future Purchasing has a structured and repeatable system for evaluation which assesses the key areas and compares them to a benchmark developed from the most effective businesses and their approaches, this helps building team strength in procurement.
Main Board & Executive Sponsorship Typical Examples of Factors Identified:
- CEO & board level adoption, support and sponsorship.
- Evidence of active buy-in and support.
- Resource strategic procurement initiatives.
- Consistent corporate procurement plan and policies.
- Mandate procurement involvement.
- All third party spend with procurement involvement.
- Board sponsorship of specific procurement objectives.
- Designated board sponsors for key initiatives.
Structural Change & Business Reporting Typical Examples of Factors Identified:
- Board level representation.
- Procurement represented on the board.
- Group procurement head as part of senior management team.
- On the mainboard, not reporting to it.
- Sufficient skills/resources/education for step-change.
- Raise the competence of staff to become “best in class”.
- Clearly defined global / regional / local structure.
- Change the culture: integrate UK / International businesses.
Organisational & Strategic Alignment Typical Examples of Factors Identified:
- Understand and deliver what matters.
- Deliver valued benefits back to the business.
- From procurement function to procurement competence.
- Bring suppliers much closer to customers.
- Getting closer to our customers.
- Effective integration of functional business plans.
- Realise cost savings / deliver cash.
Recognition & Stakeholder Engagement Typical Examples of Factors Identified:
- Improve the buy-in from key stakeholders.
- Improve communications from procurement.
- Departmental recognition of procurement’s value.
- Departments to seek out our assistance.
- Raise awareness of procurement’s contribution.
- Build management understanding of the benefits.
- Awareness, support and acceptance of procurement.
- Cascade from senior management to operations staff
Results from transformation
These factors clearly influence the ability of procurement to deliver better results. In the global category management report, those who are addressing these areas well are delivering around 3X the performance of the less developed businesses. Focusing on these areas provides benefits that are far larger than the investment needed to secure them.
Contact Future Purchasing to discuss building team strength in procurement, we can work with you to develop a clear view of your performance and approaches in these, and associated areas. From that, create a change program that will deliver sustainable benefit.
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