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10 Commandments for Procurement Professionals

“When do the procurement professionals become candidates for the CEO role?” This is a regular question at professional procurement networking events.

The number of corporations that recognize value in the procurement profession remains limited, as evidenced by the number of procurement roles at the executive level. Chief Procurement Officer (CPO) is not as familiar as Chief Financial Officer (CFO) and is still met with a questioning raised eyebrow in some social circles.

It's time to raise your hands, stand up, stand out, and join the growing tide of procurement people who are transforming companies, economies, and countries.

“But how is that possible in a world that values and measures revenue and cost primarily,” the voice of scepticism whispers.

Below are 10 secrets discovered by an operational and strategic professional who has worked in both the public and private sectors:

1) Think and communicate value.

Even if your personal performance targets relate to price and cost reduction, ensure that your conversations about performance communicate the value that you have added.

Value can be demonstrated in many forms, including extended warranties, improved quality, innovation from suppliers, reduced working capital, tax efficiency, and risk reduction. All these contribute not only to long-term sustainable cost base reduction, but also have an impact on revenue generation through satisfied customers and competitive advantage.

Leading procurement solution providers have developed tools to measure the return on investment (ROI) in the procurement department. Before making the decision to invest in these, start the value conversation with your key internal customers and stakeholders. Start today.

2) Align with an influential mentor.

A mentor does not have to be your direct boss or somebody senior, but ensure that the chosen person is influential with your stakeholders. A great example of this is a positive relationship with the quality department or technical manager.  A quality department that sings your praises quickly dispels any misconception that procurement trades off quality for price. Supplier audits are a great opportunity to build a meaningful relationship of learning and honest feedback.

In a service environment, the sales and marketing department can be great allies. Seek them out for advice and support.

3) Communicate, communicate,  communicate.

Join your internal customers' forums, whether they are monthly meetings or email communications and give regular updates on progress (even if it is bad news).

Create visible visual reports of your top three key performance inidicators (KPIs) in the department, so that your focused and performance-driven culture is experienced by those entering your space.

If you are a leader of a procurement team, compliment your team for tasks accomplished in these forums as this raises their visibility as well.

Invite yourself to forecasting and budget meetings if you are not already in these forums, so that you can use this information to anticipate changing business requirements that will have an impact on the supply market and vice versa.

4) Remember that you are a service to others but, most importantly, distinguish the difference between customer service and servitude.

Enough examples have been witnessed where procurement is instructed where to source and from whom.  The justification for this is often speed required (disguised as efficiency) and limited specifications or scope of work. Counter arguments should include risks associated with a limited pool of suppliers, opportunities associated with increasing the available supply base and the threat of a perception of bias.

Do not be afraid to challenge colleagues, given your knowledge of the market and industry competitors.

5) Take the time to understand your stakeholders' source of pain.

Knowing your stakeholders' targets and source of pressure assists in your communication on how procurement can alleviate them. Ultimately, everyone in the organization has a common goal, even if there are occasional conflicts between departments. Focusing on the goals of those you support will build trust and lower resistance to changes that you may want to introduce.

6) Take time to educate and train your end users on risk managementc

Spend time with your end users on risk identification and mitigation prior to the purchase. This could be a 10-minute conversation relating to an off-the-shelf item from a new supplier, or a detailed session during a strategic sourcing project. It is important that they are familiar with potential risks and have actively participated in the decision process of whether to take the risk or transfer it.

7) Exceed expectations by managing expectations.

It is important to be clear about both what you can do as well as what you cannot do. Always getting the lowest cost airfare advertised is not possible on peak business flights, and this needs to be clarified before your negotiation skills are challenged.

8) Continue your professional development journey. Join a discussion group.

Training does not only need to be in the form of formal courses. The Internet, professional discussion groups, and industry journals allow you to keep up-to-date with current trends and build your own personal confidence.

Take a sales course. The skills required for success in procurement are not dissimilar to sales.  A large part of raising your visibility would involve internal negotiations on deadlines and capacity as well as support for creating change.

9) Work hard as well as smart.

There is no substitute for demonstrating commitment to the ultimate goal of the business.

10)  C reate the opportunity to have fun.

Creative and enthusiastic employees are not only attracted by the opportunity of working in a high-performance team, but want to have fun in the process. Use small opportunities to reward other people or departments for their contribution to procurement success. Introduce a reward of a chocolate brownie for the best scope of work, run a procurement workshop on sourcing by using the baking of a cake as an example, and get the participants to source the ingredients and eventually bake and eat the cake. Creativity, fun, and flexibility should not be the preserve of the marketing and sales team only.  Learn from them.

Let us know about how well or poorly you've done in following these commandments in the commments sections below.

3 comments on “10 Commandments for Procurement Professionals

  1. kjosefschmidt
    February 3, 2015

    Keep the highest standard of ethics. If your internal customers see a procurement colleague accepting gifts, dinners, or golf outings, it might bring up questions about that person's loyalty.

  2. Hailey Lynne McKeefry
    February 4, 2015

    @kjosefschmidt, that's an excellent addition. Even the appearance of impropriety hurts. Thanks for chiming in. 

    Let's put it out to other EBNers: what would you 11th commandment be?

  3. kjosefschmidt
    February 4, 2015

    My friend & former colleague Mr. Troy Bourgeois added: • Don’t be afraid to rotate; places, jobs outside of procurement • Learn the total financial picture; not just the procurement view • Volunteer to manage a new team that does not fit in the procurement umbrella while still being the head of procurement. (new small acquisition, skunk works effort for new product, etc.) Thus, the CEO has someone in charge he/she can trust instead of a new manager while he assesses the new group’s effectivity.

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