How do I know if my Procurement Director is up to it?

I had a call the other day from a 'headhunter' at one of the big firms.  I haven't spoken to him for a year or so, but we get on well and he's picked my brain a couple of times since we last worked together.

He had a very interesting question.  One of his regular clients is the Human Resources Director for a large private sector organisation.  This HR Director has a suspicion that the organisation's Procurement Director is basically not up to the job, and that the procurement function is not performing as it should be.   But, he asked my friend, who then asked me, how could he know whether his suspicions were correct?  After a few minutes thinking, I suggested four things that the HR person could check reasonably quickly.

1. How much of the organisation's third party spend was procurement influencing (not controlling necessarily, but really influencing)?  It may be difficult to get a precise figure, but as the HR Director he would know for instance whether procurement had traction in the HR related areas.  A good sign if they do; less good if they don't.

2. Are there documented category strategies / plans in place, and when the HR person reads them, can he see that they reflect and recommend different approaches for different spend areas?  I can't tell him what they should say, but if (for instance) every one just takes a "beat the suppliers about the head" approach, then that would not be a good sign.  I would be looking for understanding of different market, supplier and internal dynamics in the different categories.  And obviously if there are no documented strategies or plans, that is not a good sign.

3. What training and development plans are in place for procurement staff; basic CIPS qualification or similar is a good sign and a good start but I would look for more tailored plans as a sign of a top-class organisation.

4. Quite simply, what do the other C-level executives think of procurement and the Director?

I did of course like any good consultant suggest that an external review of procurement would help to establish performance; but what do you think about my four points?  Are there any that are better, easier, more revealing than these?

(n.b. I am using 'he' for shorthand here but I have no idea whether the HR or Procurement Directors in question are male or female).

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First Voice

  1. Darren:

    Peter, further to point three you could also consider employee attrition and whether his staff are leaving on promotion or just getting out? Engagement with key suppliers may also prove beneficial. But maybe the fact that the question is even being asked may identify visibility concerns?

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