Three Things ‘Rock Star’ CPOs Know About Procurement Influence
Last month I had the opportunity to speak with Dave Bowen, Xchanging’s US Country Manager and CEO of MM4. Xchanging has now released two parts of the research they conducted into procurement and supply chain. You can read my coverage of the first two parts here and here.
In Procurement at a Crossroads, the book I co-authored with Jon Hansen (coming out this fall), we took a hard look at procurement’s longstanding desire for a greater presence in the C-suite. For many ambitious procurement professionals, the fact that CPO is not a standard executive level position is an indication that we have not ‘made it’ yet. For me, it is proof that we have been seeking the wrong thing.
Rather than chasing status, something awarded by others and affected by a number of factors outside of our control, procurement should invest in influence – and no, the two are not synonymous. It is possible to be influential without rank. There is always room for strategic movers and shakers between the traditional lines of a corporate org chart.
Since Xchanging’s research was based on responses from over 800 CPOs, I took the opportunity to ask Bowen about influence. How are the leaders Xchanging spoke with, building it and maintaining it? Here are some things that procurement ‘rock stars’ know:
Targeted Communication is Critical
It is not enough to generate the expected results, or even to surpass expectations. You have to spread the word about your achievements in the right way. Some of the CPOs participating in the study even have a dedicated internal PR person to make sure a relevant, tailored message gets across to each of procurement’s stakeholders. As Bowen said, “CPOs are increasingly recognizing the importance of managing internal communication around continued improvements and successes within their supply chain. In fact, many of our clients have gone so far as to create a role and subsequently hire a Procurement/SCM communications manager to standardize key messaging and promote the ongoing efficiencies delivered by the procurement/supply chain organization.”
This is particularly effective for the communication of strategic sourcing results. Since it is savings figures that count towards procurement’s metrics, we assume that is what others internally want to hear about. Not so. Savings is what matters to us. We need to talk to each person or group about what matters to them. Depending on their role or proximity to the category of spend in question, that may be payment terms, access to new materials, promising supplier innovation, reduced administrative time for departments buying against new contracts.
All IP Should be Gathered, Centralized, and Then Spread
Few other departments in an organization get the in-depth look into how colleagues work than procurement. We see operations and execution at their best and at their worst – and usually have access to related data that allows us to distinguish between what people think is happening and what is actually taking place. Procurement should collect any valuable IP – regardless of what kind – capture and centralize it, and make sure it gets spread back out to the far corners of the enterprise. So what if this improves others’ performance without contributing to our own direct results? It goes along way towards positioning procurement as ‘in the know’ and positions us as the people to go see when there is a problem or a void of knowledge – regardless of where in the organization the need is.
Technology is Not a Repository – but a Conduit
No matter how strategic procurement is, we can’t seem to get away from being identified by our technology. Part of the problem is that procurement technology is seen as a place where information sits. Spend goes in. Supplier information goes in. Bids go in. Contracts go in. Performance information goes in. Sure, reports come out, but what real value do most reports really have? Leading CPOs understand that procurement technology needs to be rebranded as the place where enriching processes take place. Information gets centralized, and new sourcing strategies can be discerned. Stakeholders, suppliers, and procurement put in their best ideas, and a partnership is created. We should never sell the value of our solutions as anything that sounds stagnant like a database or repository. All data – whether going in or coming out – should be emphasized as actively in motion, better for its contact with procurement.
Xchanging’s third and final results report is due out shortly, and I got a hint that it contains a look into what will be the leading trends in procurement in the months and years to come. If we are smart (and I argue that we are), we will start working now to build our influence so that when future opportunities arise we have the internal clout required to act on them.