Category: Procurement

The narrative that organisations should seat procurement at the top table for organisations has been ongoing for decades.

https://www.1st-executive.com/blog/2019/10/does-procurement-need-a-seat-at-the-top-table?source=google.com

https://www.team-canopy.com/post/what-role-for-procurement-seat-at-the-table-or-trusted-advisor

What are your views on this dilemma?

Weismann has a point where he stressed that “essentially states that the pursuit of acknowledgement from the executive suite and the feeling that you are being personally and professionally disrespected if you’re not working at board level, is a fallacy”. He suggests that rather than focusing on the role of procurement in the C-suite, the main way to exert influence is still “the old-fashioned way: through performance”.

Even if you’re not at the table, Nick Verkroost talks about the importance of having a voice at the table  – Through the ability to be able to influence stakeholders.

There have also been many publications about the Soft Skills required for procurement professionals. Soft Skills are defined in the oxford dictionary as “personal attributes that enable someone to interact effectively and harmoniously with other people”.

There are so many examples of what these skills are, and correlation is sometimes difficult to achieve generally. The table below is taken from the following publication and is a good general benchmark.

https://www.theforage.com/blog/basics/what-are-soft-skills-definition-and-examples#soft-skills-work

Soft skills are non-technical skills that describe how you work and interact with others. Unlike hard skills, they’re not necessarily something you can learn in a course, like data analytics or programming. Instead, they reflect your communication style, work ethic, and work style.

Do you agree with this? Can soft skills be taught or are we born with them?

Throughout my career, I have wondered why we put a framework / box around these skills and define them as “soft skills”. Are we not doing them a disservice and undermining how hard it is to find people that really excel with these attributes, and  underplaying how difficult it is to train them? I always use the frame of “POWER skills” for that reason. What do you call them?

For procurement Professionals soft skills defined by the Chartered Institute of Procurement and Supply are.

What does this all mean? From the top 5 skills listed above and their detailed explanations, I think the key threads are the ability to build relationships through clear communications and collaboration whilst leading the engagement strongly, building successful value outcomes for all stakeholders and suppliers. A bit of a long sentence but captures the essence of above.

However, fundamental to procurement professionals and the most important attribute is the POWER to INFLUENCE!

Think about the procurement process! At a high-level – Plan / Source / Manage

As a support function,  Procurement rarely owns the budget and outcome of what is purchased. When discussing with stakeholders and budget holders about procuring a product or service delivering a customer outcome; how often even at the needs analysis stage does the stakeholder have their own ideas of who can deliver the outcome?

Similarly, when performing a market analysis how often does the stakeholder know the suppliers who could deliver the outcome?

Here is where you Influence POWER starts (especially if you know there are much better and/or new and innovative suppliers in the market than the ones offered up by a stakeholder).

In very technical fields senior technical leaders have gained their reputation based on their technical knowledge  – knowledge built over the course of their working life.

How do you convince a senior engineer that company x  (a name not recognised in the traditional market) can produce the highest quality outcome?  

So, you have analysed the market, obtained all empirical data, and presented it to the stakeholders but the engineer says,  “Over my dead body!” What do you do next? 

The ability to Influence is again the POWER that you need to take this individual on the journey of change. You can only influence if you have Trust with your stakeholders and that is built on relationship and delivery. This exact scenario happened to me and it took over 3 years of coaching and influencing to get a great outcome for the organisation).

Evaluation will require the Influencing POWER. When I hear you say! At panel shortlisting when you can’t get a consensus.

What are your thoughts about this statement?

The Negotiation stage is about preparation and understanding your organisations BATNAs (Best Alternative To Negotiated Outcomes), However during the process there likely will be stages where you have to use the Influence POWER to obtain some of your desired outcomes.

Management and Performance usually comprising KPI measurements and monthly meetings will also highlight opportunities where a procurement professional will have to use their Influence POWER. Especially when asking the supplier to go the extra mile to sort out an issue.

There will also be instances when you meet with stakeholders using the performance data supplied to either commence performance management, reward the supplier, or start a new sourcing process.

Our profession along with most professions today need lots of these POWER Skills and there is always plenty of debate about the priority attributes.

I hope this has helped to simplify and provided some food for thought on what a complex issue this is and helps you think about the main attribute that you need to have as a procurement professional.

A question I will leave you with: If you have the POWER of Influence as a procurement professional, then why do you need a seat at the C suite table?

My views and opinions on this vast topic are part of a much wider industry dialogue – I’d love to hear your insights and feedback too.

If you are interested here is other reading on influence Power

https://hbr.org/2018/02/how-to-increase-your-influence-at-work

How to Use the Power of Influence

13.3 The Power to Influence

https://www.forbes.com/sites/forbescoachescouncil/2017/11/02/power-vs-influence-knowing-the-difference-could-make-or-break-your-company/?sh=2c23260e357c

https://www.sciencedirect.com/science/article/abs/pii/S0278612516300589

Its been a while so I think you may enjoy this blog

We talk a lot in the procurement world about ethical procurement and how important it is to all the buyers in the modern era. Provenance is an element that can assist with the transparency of how the goods and services are manufactured and delivered by a supplier from any Industry.

How does Provenance work and do we really care about this when we buy something?

Lets start with a definition – what is Provenance?

Provenance (from the French provenir, ‘to come from/forth’) is the chronology of the ownership, custody or location of a historical object.^[1] The term was originally mostly used in relation to works of art but is now used in similar senses in a wide range of fields, including archaeology, paleontology, archives, manuscripts, printed books, the circular economy, and science and computing.

The primary purpose of tracing the provenance of an object or entity is normally to provide contextual and circumstantial evidence for its original production or discovery, by establishing, as far as practicable, its later history, especially the sequences of its formal ownership, custody and places of storage. The practice has a particular value in helping authenticate objects. Comparative techniques, expert opinions and the results of scientific tests may also be used to these ends, but establishing provenance is essentially a matter of documentation. The term dates to the 1780s in English. Provenance is conceptually comparable to the legal term chain of custody.

From <https://en.wikipedia.org/wiki/Provenance>

Provenance was designed to gain trust through authentication and transparency. Since the 19th Century it has been a key part of the art world both from an ownership and collection function. It is second nature for Museums, Galleries in the Art world and has expanded to other sectors within these markets.

Researching the provenance of paintings — The principles of archival provenance were developed in the 19th century by both French and Prussian archivists, and gained widespread acceptance on the basis of their formulation in the Manual for the Arrangement and Description of Archives by Dutch state archivists Samuel Muller, J. A. Feith, and R.

From <https://www.google.com/search?q=when+did+art+provenance+become+important&oq=when+did+art+provenance+become+important&aqs=chrome..69i57j33i160.13602j1j15&sourceid=chrome&ie=UTF-8>

There is a great article on “How provenance affects the value of art & collectibles ”  and it explains why in this world it is so important.

From <https://medium.com/codexprotocol/how-provenance-affects-the-value-of-art-collectibles-51fa1269f215>

So how important is the adoption of Provenance in the Procurement and Supply Chain World?

Harvard that explains “the why as”

“The origins of a company’s products used to be pretty murky. Beyond the supply chain function, virtually no one cared. Of course, all that’s changed. Consumers, governments, and companies are demanding details about the systems and sources that deliver the goods. They worry about quality, safety, ethics, and environmental impact. Farsighted organizations are directly addressing new threats and opportunities presented by the question, “Where does this stuff come from?”

From <https://hbr.org/2010/10/the-transparent-supply-chain>

Remember the iPhone factories and suicides’ of staff, what about modern slavery and poor working conditions in the fast fashion industry to name a couple of relevant examples of why it is import to have transparency in our supply chains.

Safety has also been a criteria for Provenance in the supply chain.

Food safety has been see as high risk world wide due to many stores of contaminated products. Who can forget in late 1980s Bovine spongiform encephalopathy BSE or commonly know as Mad Cow disease in the U.K? I still cant give blood here in NZ!

https://en.wikipedia.org/wiki/United_Kingdom_BSE_outbreak

New Zealand has a reputation for having rigorous food safety standards and high-quality produce. Consequently, there is a high risk of food fraud, and food contamination incidents around the world are driving the need to protect this reputation.

We are even more interested now on paddock to plate provenance of our food. A nice rack of lamb on are plate and I can hear someone thinking! Was it from a lamb that was fed on grass grown organically – without pesticides? Was it ethically slaughtered in an abattoir ? How was it package? ( no plastic ) and how was it transported? ( emissions ). Does the supermarket I bought it from pay the living wage?

Listen to this Radio New Zealand article about a Dunedin-based company Oritain uses chemical fingerprinting of produce to verify the origin of foods another form of provenance stamping.

From <https://www.rnz.co.nz/national/programmes/ourchangingworld/audio/2568243/food-provenance>

We all know the issues about Bangladesh and fast fashion – This is a great article from NPR and another from NY times that really opened up the issues with fast fashion ethical manufacturing of fashion items and not only the conditions of workers but the impact the dumping of waste on our environment.

https://www.npr.org/2013/05/02/180557959/ethical-fashion-is-the-tragedy-in-bangladesh-a-final-straw

I hope you have enjoyed this quick insight – my aim is to give you some examples to read and enlighten you about how provenance has become one of the most important aspects of goods and services that we procure today. The Buyer is making decisions based on Ethical Sourcing! I think we do care about provenance and it will only increase.

With the advent of COVID 19 traceability in the supply chain has become a far more important exercise and topic not only due to risk of late or non delivery by many other factors either positive or negative. See the Boston Consulting Group model below and the many factors that could influence the supply chain;