Our People Are Our Greatest Asset: Intellectual Capital

With more on our Hot Topic series, Procurement Talent, Stephen Ashcroft of Brian Farrington Ltd, which has been specialising in procurement consultancy and training since 1978, raises his concerns over how inquisitive procurement leaders are about the value of their intellectual capital.

The intellectual capital of a procurement operation is either an asset to the organisation or it is a liability. The overall knowledge of existing intellectual capital is a significant challenge for many procurement managers. How do they test the knowledge and skills within the department? Is it a paper exercise or something much more substantial? Does HR have a positive role to play, perhaps with a structured methodology that will have the respect of the department? Who has identified what future knowledge and skills will be required for the organisation to meet its objectives and aspirations?

The future career of procurement specialists is often in the hands of the manager. This is a very significant and onerous responsibility. Some people’s futures amount to little more than an annual review -- a ticking the box exercise.

It may be argued that procurement skills are the least addressed by the profession. Professional examinations are founded on cramming basic knowledge into individuals. Regrettably, it is not supported by a requirement for Continuous Professional Development. Negotiation is a good case in point. Every buyer, and those in more senior positions, claim to be expert negotiators, able to drive superb bargains. Who knows what their abilities are? Who tests their abilities with business simulations? Who sits in on actual negotiations and does a debrief post completion of the negotiation? We know what the answers are to these questions in some organisations. Deals are done that would not stand scrutiny.

Partnering is, allegedly, a modern approach to buyer-seller relationships. It is based on trust. What skills are required to develop partnering arrangements? Who tests these skills in your organisation? Does the buying team have persuasive skills, team-building skills, patience, perseverance, ability to communicate at all levels with a supplier and the technical knowledge to gain credibility with technical colleagues? Does the skill of resolving disputes before they get out of hand exist? Having read some of the latest judgements on British and Irish Legal Information Institute (BAILII) where the courts have resolved issues, it would seem that these skills are seriously lacking.

Listening – pardon me? – is a much needed skill in procurement. Paying attention to detailed answers isn’t easy, particularly when meetings/negotiations go on for hours on end. A failure to listen can lead to serious misunderstandings, arguments, disagreements, breakdown in relationships and legal action. How many buyers have been trained to listen effectively?

In conclusion intellectual capital is undervalued and often ignored. So, where do you stand? Is it in the complacent school or the inquisitive school?

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