Procurement Transformation – people are often the solution, rather than the problem

(Here is the second installment of Dr Ian George’s series on procurement transformation. Ian is a senior partner and practicing consultant at Agile Partners, has an engineering background, and has worked in procurement for the last 20 years. He has held senior positions in BMW Group and Philips Electronics, working globally on organisational and leadership development).

When focusing on the next set of improvements it is easy to forget that we still have an existing situation to manage. So, throwing more challenges at staff who already have a full-time job can feel like trying to put out burning platforms with an endless supply of petrol. Although the imperative is to change processes, this has to be balanced with a keen focus on personal development through learning new skills, developing the ability to assimilate new knowledge and practicing the more subtle interpersonal capabilities that will enable staff to influence and cause changes in methods and behaviours without relying on an executive mandate.

To make the investment on personal training justifiable, these new capabilities need to be seen making a difference back in the workplace. Taking someone out of a situation, giving them a transformational experience and then putting them back in the same situation is not going to deliver the changes that are needed. The development of people needs to be linked to the development of processes and the collateral that surrounds them. That way people can be put back into a different situation and legitimate demands placed on them to perform differently.

Supporting the above needs to be the implementation of a robust and well thought-out performance measurement system. As Eli Goldratt once said, “If you measure me in an illogical way, don’t be surprised at my behaviour.” Performance measurement drives the way people think and therefore act. Starting with the business priorities and cascading these down to individual goals is not new, but it is still amazingly badly done (if at all) in the majority of organisations.

“Savings” is not the answer to growing the reputation of Procurement. Quite the opposite. It is, however, a prerequisite that will always remain. It needs to be reinforced with other measures of performance that demonstrate the breadth and depth of contribution the function can make. When the executive recognise what this could mean, then the journey can really start as they pull on this untapped resource they didn’t realise they had.

“Being good enough” may sound like a glib statement and a little defeatist, but it is probably the most pragmatic piece of advice going. Being world class is often a few steps too far for both the function and the organisation it serves. Whilst it is useful to know, it should be an aim for the future rather than an objective for this year. The imperative for now is “Being fit for purpose.”

This means meeting expectations exceptionally well, every time, whilst pushing the boundaries and demonstrating what “next best” might look like. Demands are only going to get tougher, so good enough is a constantly moving target that will require ever more ingenious innovations to maintain and grow the contribution of Procurement through 2014 and beyond.

First Voice

  1. Julian Moore:

    Great Article Ian. I think this could be applied to life also!

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