Procurement has changed. Have you?

Alan Day
28 June 2017

Bad behaviour still exists among procurement professionals. Why does this matter and how can we deal with it?

“The way to gain a good reputation is to endeavour to be what you desire to appear”. So said Socrates, and he was correct. The world of procurement has suffered from a poor reputation, but in recent years we have become more strategic, more aligned with commercial value and better at understanding risk.

But there still exist some old fashioned and bad behaviour. Recently, after talking to a supplier, I became aware of some unethical, although not illegal, behaviour from a fellow procurement professional. Why does this matter and what controls have we got in place to deal with it?

The spend procurement typically deals with is large. While these may be just numbers for the procurement professional, they are often career or even corporation defining for suppliers and supplier account managers. Procurement is in a powerful position, where influence over who, where and how much your organisation spends with suppliers can change industries and lives. But that position of power can be abused, through individuals taking bribes, for example, or bullying suppliers.

This means we have to work hard at making sure we do the right thing, that we are the corporate conscience, and that our professions, departments and personal reputations remain untarnished. We need to care and walk the walk.

If we want procurement to be a ‘customer of choice’, or the chosen destination for internal and supplier stakeholders, then our reputation must matter. We need to ensure that high standards are maintained across our procurement profession so that suppliers aren’t put in these situations.

I asked my LinkedIn network three questions to find out how they felt about such behaviour among some in our profession.

1) Should we as an industry care if a person in our profession is behaving poorly?

The overwhelming view was that from an industry and individual point of view, procurement should care. People were concerned that the behaviour of a few individuals could have a catastrophic impact on the opinion, image and reputation of the profession as a whole. It is all procurement professionals’ responsibility to protect the reputation of the profession by being the ‘ethical true north’ of our respective organisations. Professional best practice ensures growth, prosperity and sustainable results. Damaging incidents only strengthen the need and arguably the desire to license the profession.

2) What should we do to address it?

People felt that it was critical that the issue is addressed to avoid the false impression of acceptable practice. Common view was that a whistleblowing policy followed by a secure line of communication (hotline) should be implemented. As one chief commercial officer advocated: “An effective SRM approach should include and support whistleblowing from within the supply chain.”

Other suggestions were for the need for organisations to implement internal and disciplinary committees for professional misconduct to further instil the fact that this type of behaviour is not to be tolerated and that there are correct and safe methods to communicate concern without suffering any consequences or ramifications.

Procurement professionals must maintain integrity, remain professional and ensure due process is carried out via the correct channels. Another CPO noted the need to engage with CIPSto enhance and support team development.

3) What advice would you give a supplier in this situation?

The collective view was to initially note or report anything untoward at the earliest possible moment to the correct individual/committee. This is not only for their benefit but also for the procurement profession to ensure that no recurrence of a similar nature is able to happen again. People felt that it is important that suppliers feel comfortable and to an extent safe when working with procurement. As a profession, procurement cannot afford to have people feeling belittled or bullied as this will only lead to the tarnishing of our reputation.  

The reputation of our profession is something that matters to procurement professionals, suppliers and businesses alike. We need to work together now to build the reputation by acting in an ethical way. This starts with doing the simple things well. Be responsive, take phone calls, be open and transparent, do what you say you are going to do.

The time is now to work together to build the reputation modern procurement deserves.  Every time we find poor behaviour we should speak out, report and share our experiences. All businesses should aspire to be the customer of choice and behaving in a professional ethical manner now is the best way to achieve this. 

Alan Day is chairman and founder of State of Flux. State of Flux is currently carrying out its 2017 Supplier Relationship Management study

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