16 October 2003
Purchasers were urged to manage less and lead more at this year's CIPS annual conference in London. David Arminas looks at what this means in practice
Few delegates at the opening address at this year's CIPS Premier Conference, given by business iconoclast René Carayol, went away unmoved by his pleas for purchasers to manage less and lead more.
Carayol threw down the gauntlet to the procurement profession in an impassioned and often humorous presentation, saying the choice must be made between people and processes.
Purchasers now have many well-developed processes for buying products and services, supplier management, quality assurance and many other functions. But by burying their heads in these processes, even if they are doing them well, purchasers will not be leading their teams.
The former IT director made no bones about his admiration of another speaker at the conference, Sir John Stevens, commissioner of the Metropolitan Police and "the best leader I have ever been in close proximity to". Stevens showed great leadership by going on the hustings, meeting regular officers in their headquarters and making decisions on the spot.
"He changed the culture of the organisation," said Carayol. "The thing he did more than anything else was engagement with people."
The key question for purchasers is whether they are obsessed with their processes, many of which have taken years to fine-tune and put in place. Are they doing this at the expense of communicating with the people around them, both inside and outside the procurement department?
Purchasers will struggle with several major issues as they reconsider their relationship with process-orientated management.
One issue is how to strike the right balance between a reliance on good processes and knowing when to bypass them to make decisions, especially at times when the company needs answers or results quickly.
Processes, such as good rules for e-auctions or supplier selection, have been developed because they instill an auditable order into corporate activity. If the process can be audited or followed through, then the decision can be seen as transparent, open to inspection and objective. This makes for less nepotism and unethical behaviour. This is the good side of processes that purchasers must not lose sight of.
Another issue is how willing a purchaser is to sidestep processes and make decisions that may or may not be right. A wrong decision could harm their chances of promotion. Worse, at a time of corporate survival, management boards may ask a purchaser why decisions were made without due process or normal consultation.
As one delegate said, it is harder to go outside the processes if your company is downsizing and people are losing their jobs. "When will you be next?" he asked.
There is also an internal issue for purchasers. Rising above the processes also comes down to individual talent; management style and organisational ability will play a role.
Leadership qualities, such as better communication and influencing people, are not about processes. They are about personal presentation and charisma. In many instances, these are not easily taught. Carayol believes the best leaders are the best listeners and communicators. But many consultants will admit that no matter how many courses a person takes, these talents will remain more inherent than learned.
Purchasers have been clamouring for procurement to be recognised as strategic. It is much in vogue to be setting up strategic procurement policies on everything from corporate social responsibility to global purchasing. But Carayol believes that strategy is nothing without action. In fact, strategy is simply a set of coherent actions that lead to a sustainable competitive edge.
His advice is simple for purchasers in the present global environment, where speed of action can mean corporate survival: "Don't be afraid to act, and if you are wrong, apologise."
It may sound simple, and simple messages often are the most easily understood. But the power of the message should not be underestimated as purchasers gradually claim their places at the top table because of their reputation for technical excellence.
But the technical skills to develop good processes and save on the bottom line may not be the ones that sustain them at the top, according to John Haslam, principal consultant with Hoggett Bowers, an executive recruitment consultancy.
"People get to the board because of their technical skills, but they won't stay there if they lack inspirational skills," he said.WHAT DO YOU THINK?
Do purchasers spend too much time on process and not enough on people? Vote in our poll at www.supplymanagement.com