Stakeholders, governance and procurement – big questions, no easy answers

For most of the big questions in procurement, I have clear answers. They might be nuanced to some extent, it might be different answers for different situations, but I do know what I believe. But there's one major question in procurement that still makes my brain hurt. Or put it another way – I will find myself agreeing with two speakers or writers within days of each other, but each proposing very different views.

That issue – or set of issues really -  is around working with stakeholders, procurement governance, mandates and the like. Putting it in its simplest form, should procurement seek a mandate from the CEO or equivalent, to say to everyone in the organization, “you must use procurement”.  Or is it all about how procurement can persuade and work with stakeholders to show our value – ‘selling’ procurement, if you like.

Now we might define 'user' in different ways, but I’m sure you know what I mean. Life is easier in some sense if we seek a policy that forces budget holders to use the services of procurement.  But if we rely on persuasion and influence to gain a strong position and significant spend coverage, then arguably that provides a more sustainable base for the function, rather  than relying on positional power. And the arguments on each side are strong. A mandate, assuming it is communicated and enforced (mind you, that raises some issues in itself) cuts through a lot of potential pain. It enables procurement to take real committed spend to the market. However, it can cause bad feeling amongst users, particularly if the capability or capacity of procurement is not really up to the task.

Persuasion has the benefit that people using procurement do so because they want to – so their commitment and attitude is likely to be stronger than those who are forced into it. However, without a mandate procurement can end up spending all its time on the internal selling rather than delivering value for the supply markets. And procurement people and functions have not always been very skilled around the whole stakeholder management picture.

I can see both sides of the argument. And on May 21st, Guy Allen is leading the next BravoSolution sponsored Real World Sourcing briefing session, titled “Owning the Space – Working with Stakeholders”.  He’s going to explore some of these questions, and one of his sub-headings is “the importance of not selling procurement”.

It should be fascinating to see what he has to say about these issues – and there are a handful of places left, so book here for a thought -provoking session, an excellent lunch and a good networking opportunity at the Don restaurant in central London.

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First Voice

  1. Trevor Black:

    I find the concept bizarre, if you are working in an organisation and if the finance, legal, quality or sales people are not up to the job, you just do it yourself. There is something seriously wrong if you have to market yourself to your stakeholders in order for them to use your services. I don’t buy this tosh. Can you imagine the consequences of everyone just doing their own thing as they believe colleagues in other disciplines are not up to the job? If people aren’t up to the job get rid of them. Procurement is also not about being in a popularity contest and often if you are not liked it’s because you are doing a great job. This is basic management and you don’t need a course to understand it. This is how it works in the real world and seeking a mandate to enforce compliance from the CEO only reflects on either a lack of confidence or that you are working for a Mickey-mouse organisation.

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