IIAPS roundtable – soft KPIs for purchasing and supply

We’ve featured the International Institute for Advanced Purchasing and Supply (IIAPS) before – the new organisation set up and led by Professor Andrew Cox with the goal of developing advanced procurement certification and assessment globally. At their roundtable earlier this month, there was some good debate amongst the delegates, who were in general pretty senior practitioners from largely private sector blue-chip organisations.  We’ll feature a couple of those debates here this week.

One session was led by Volvo Group (not the car firms, the buses and trucks etc). It looked at development and use of Key Performance Indicators (KPIs) in procurement that relate to soft skills rather than hard.  So rather than measuring what savings Sue has made this year, or whether Jim turned round tenders in the appropriate timescale, soft KPIs might involve their attitude to working with colleagues, or their ability to participate in knowledge transfer within the team.

It’s clear that soft skills play a huge element in the success of any procurement team or individual. Influencing stakeholders – and that includes suppliers, but perhaps even more so internal colleagues. These skills are clearly essential now for most procurement roles.

But how do you do set measurable KPIs in that area? It helps if you have a corporate framework to relate to. Volvo clearly have a very strong culture, and they use this as a basis for assessing and developing soft skills in their people. They use words like “traditions, habits, attitudes, values, beliefs” when talking about this aspect of performance; words I must admit I rarely heard or used in my 20 years of managing and being managed in the procurement function.

This doesn't mean you take the focus away from the harder issues or measures, and Volvo clearly has a very structured and professional approach to the ‘traditional’ drivers of procurement performance. But the soft KPIs can add another dimension, hard though they are to measure. Incorporating some aspects within a scorecard approach, whether that is at function, sub-group or individual level seems to be the way to go, although the point was made more than once about the intrinsic difficulty of measuring these more subjective ‘outputs’.

Using surveys was discussed – and it seems to me that stakeholders (suppliers or internal) are as well placed as anyone to tell you if your procurement managers have the right approach and soft skills.  It was also interesting to hear that leading firms are now measuring workforce ‘engagement’ rather than simply ‘satisfaction’. It’s a great point – you might be ‘satisfied’ with your organisation because it doesn’t drive you to actually do much and pays you well! Engagement is a bit more two–way.

This whole area of soft skills is one that IIAPS are also looking at, with a focus on how to assess personal capability and build development of these skills into their work generally and of course their green / red / black belt assessment.

So a stimulating debate – not one with ready-made solutions, but I suspect it had most of the CPOs in the room thinking hard about their own approach - which is really what you want from sessions like this.

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