17 February 2014 | Peter Garnett
Supply chain processes have been rapidly evolving over the past few years to accommodate the growing demands of both consumers and businesses alike.
Procurement, as a role, has also evolved in enlightened organisations, with the progression of commercial understanding and as a result, professionals in the sector seeing their remit grow significantly, to now go far beyond the management of expenditure transaction processes. The job role has a much bigger contribution towards the overall business objectives, culture and values.
However, there remains a distinct lack of representation of procurement professionals at board level. For example, FTSE boards tend to be widely made up of those with a financial or accountancy background. Procurement is one of the most under-represented roles at board level.
Many organisations are yet to accept the transformation of the procurement professionals’ role in influencing and driving organisational performance. Some of the benefits of procurement are also quite commonly misunderstood or under appreciated. This can include relationship management, financial contribution, competitive advantage, risk reduction and reputation enhancement. Yet, it is arguably not these barriers, which are preventing procurement professionals from progressing to board level, but the ‘behavioural competencies’, or personality traits they possess.
My experience in the procurement sector, and specific research into the behavioural competencies of procurement professionals has illustrated ‘poor fit’ scenarios with examples of professionals lacking in certain critical skills required for the role and sought after by executive management groups. This situation has usually resulted from a lack of understanding and definition by the organisation of the specific behavioural competencies required. For example, heads of procurement tending to demonstrate high capability in risk assessment yet also tending to demonstrate low capability in focus on profit, prioritising compartmentalised costs instead. Without this strategic profit focus, it’s no wonder that the perception of such people is functional rather than executive.
Although organisations are beginning to realise the potential of successful procurement on their bottom line, they may not be realising the critical importance and wider application of the specific skills possessed by procurement professionals.
Procurement is a boardroom topic – there is no doubt. However, until the behavioural competencies of procurement professionals are defined and assessed, rather than assumed, then procurement will not contribute strategically, instead continuing to be perceived as a tactical provider and therefore under represented at board level.
There is some exceptional talent in the procurement sector, but it’s important that businesses and public sector organisations realise where this is and why this is. As a profession, we need to be doing more to ensure that the appropriate talent is being identified by strategic behavioural competencies and business contribution and that those identified are positioned as future business leaders.
☛ Peter Garnett is head of procurement at Crimson & Co