Today’s procurement leaders want a new type of employee. Rather than someone who excels at sourcing and cost-cutting, they are looking for “strategic” staff who connect what the business is trying to accomplish and how procurement can help.
There’s a simple reason leaders want this change. Procurement staff who take a strategic, business-centric view are more likely to build strong relationships, craft creative solutions and pave the route for procurement’s involvement in the most strategic and lucrative projects. What’s more, strategic staff generate nearly five times as many savings as those who are not.
CEB research shows that there are six competencies that drive strategic performance in procurement:
• Functional expert – has knowledge of processes and products
• Influencer – relates to people, builds relationships, effectively presents arguments
• Results seeker – meets deadlines, identifies actions, achieves goals
• Innovator – thinks creatively, anticipates changes, produces solutions
• Adaptor – stays calm under pressure and handles criticism well
• Complier – follows procedures and encourages others to as well
But it’s not as easy as simply hiring people with these skills. Only 10 per cent of procurement professionals excel at all six competencies, and it’s no better on the outside. Less than half of one per cent of all non-procurement employees excel at all six.
Recently, a company we work with spent over six months looking for a category manager with this profile. In the end, the company was forced to fill the position with a candidate who had potential to grow but did not possess all the necessary attributes today.
So what’s the solution? Rather than investing resources in finding the perfect employee, procurement leaders need to build the perfect team that collectively excels in every area. Take a successful football team – it is made up of players who are strong at certain parts of the game; the same person who is scoring the goals isn’t the one defending. The same should be true of procurement teams. Our research shows staff who work on teams with complementary skills are 97 per cent more likely to demonstrate strategic performance than those who do not.
The first step in building a complementary team is to understand what needs exist. Using formal assessments and surveying business partners about their experience are two relatively simple ways to do this.
After the skill gaps have been identified, the next step is to address them. Procurement leaders should not seek the perfect employee but instead focus on the most important competencies for their teams and work from there to redistribute staff or realign responsibilities to correspond to individuals’ strengths.
Procurement leaders also need to ensure they are overcoming inertia that prevents optimal staff deployment. Friction between peers and misaligned incentives are common causes of this, so leaders should proactively facilitate group discussions and remove barriers to collaboration.
While the perfect strategic procurement employee may be in short supply, the ideal strategic procurement team is not. By taking a complementary approach to team building, procurement leaders can successfully transform procurement from a transactional to a strategic function.
☛ Ashwin Srinivasan is practice leader at the CEB