Spend Matters welcomes a guest post from Howard Gutman of The Hackett Group.
In our discussions with CPOs, they often seek to change the perception of the procurement department within their enterprise and present it as being strategic to their C-suite peers. Based on a recent Hackett Group survey, only 25 percent of stakeholder executives said that procurement was viewed as a valued business partner, though 76 percent of procurement executives said that expanding procurement's scope and influence within their organization was their most important goal. From these studies and conversations with CPOs, we have found that a primary roadblock to successful procurement strategic initiatives is having well-managed, supportive stakeholders who support procurement's value proposition (and initiatives) within their organization.
Analyzing and managing stakeholders, particularly difficult stakeholder types, will allow CPOs to move forward with their strategic initiatives by identifying each stakeholder's unique concerns/pain points. In our discussion with CPOs at a recent conference, there were four common problematic stakeholder types identified:
- Those who are unwilling to change, because a single event with a supplier or new product in the past justifies why no changes should be made in the future.
- Those who can't function without his primary suppliers as they are not actively involved with managing them. Their suppliers do all of the legwork, provide the data, and are perceived as irreplaceable in terms of goods, services and communications. He tends to be a very good golfer!
- Those who are always out of touch or unavailable for key meetings and discussions, but will stall any final decision due to their lack of active involvement in the initiative.
- Those who think that they knows everything about a subject or category, including best practices, and should not be questioned, or burdened with any new information.
Despite the difficulties associated with these type of stakeholders, there are several strategies and tools available to mitigate their concerns:
- Stakeholder Analysis: Identifying their roles and responsibilities, current capabilities, decision-making abilities, and fit within the organizational structure/model
- Stakeholder Mapping: Identifying all parties involved directly or indirectly in a strategic initiative, understanding their unique interests and concerns, mapping those individuals with similar shared interests and concerns to a specific stakeholder group, and identifying the proper frequency of communications on a go-forward basis with these unique stakeholder groups
- Using a Cross-Functional Stakeholder Team: Build a specific stakeholder team that is developed to alleviate identified concerns for the particular initiative
- A Comprehensive Change Management and Communication Plan: A change management and communication plan tailored for each stakeholder will allow a CPO to manage stakeholder concerns and enhance stakeholder involvement in their strategic initiative
When dealing with a stakeholder who has some of the attributes of the out-of-touch type (the third category above), a CPO would conduct a stakeholder analysis and mapping to identify why this person is always unavailable or does not contribute necessary information. Using your change management and communication plan, a CPO would establish a cadence of individual touch points - both to initiate a discussion on the initiative and continue discussions on the initiative’s progress and potential upcoming changes. Lastly, to ensure the initiatives' success, a document confirming decisions made by this stakeholder should be included in the final initiative documentation.
All of these elements, when combined together for a strategic initiative, can allow a CPO to drive results that are valued and prioritized by their peers and change the conversation about how procurement is perceived within their organization. As demonstrated in the example above, a thorough approach to stakeholder management will allow CPOs to better overcome stakeholder resistance to their strategic initiatives.