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Procurement Goals and Objectives for Individual Contributors: You Get What You Measure
This is the last in a series of posts on performance reviews and objective setting for the start of the New Year. Click here to read my recent posts on performance reviews from the manager’s and employee’s perspectives, as well as objective setting for procurement managers.
Most of us will soon be asked to think about our goals and objectives for 2014. This commitment deserves careful thought and introspection – you’ll be living with it for the remainder of the year. This also happens to be the best time to let your input be heard and take control of the upcoming year.
Why Goals and Objectives?
Continuous improvement expert W. Edwards Deming was once quoted as saying: You can’t manage what you can’t measure. Well-crafted goals and objectives are fundamental to any organization. They are measures of production from human capital.
It is your manager’s job to lay out your high-level objectives for the upcoming year. He or she is tasked with obtaining maximum productivity without overwhelming employees. Enlightened managers will solicit their team’s input on goals and objectives. Use this opportunity to negotiate your personal goals and objectives with your manager. If there are objectives that you sense are too aggressive, ask your manager to quantify a minimum expectation and a stretch goal.
What Gets Measured?
There’s no debate that cost savings is procurement’s primary metric As procurement professionals, our goals and objectives will likely be broken into two groups: cost savings objectives and all other objectives. Try to steer your objectives toward cost savings. These are high-visibility projects that are the most challenging, thrilling, frustrating, and ultimately the most rewarding. In short, this is how to stay operationally relevant.
If your job is more transactional than strategic, you can still include objectives that facilitate cost savings. Think of the compliance efforts that drive cost savings: using preferred suppliers whenever possible, confirming competitive bidding on large purchases, ensuring new suppliers meet your company’s payment term standards. Try to craft objectives that measure your contribution to the bottom line.
Wise companies view their procurement employees in terms of their return on investment. In other words, what do I pay this employee vs. what savings / value to they deliver? This burden does not lie with management alone. Be ready for this conversation by calculating your own ROI.
Few of us are lucky enough to spend all our time generating cost savings, and other goals and objectives can be time-consuming. For example, you may be assigned a special project to create a conflict minerals compliance program or to develop a second source on critical raw materials.
The intangible part of procurement is often missing from our goals and objectives: internally managing customers and externally managing cost, quality, and delivery issues with incumbent suppliers. Suggest to your manager that these more intangible objectives be captured and measured by customer survey or rounded feedback. Not only does this make your manager aware of your work load, it also subtly reminds them of all the work you do behind the scenes.
It’s a Living Document
However complete your goals and objectives seem they are a static representation of a dynamic effort. You are likely to be assigned additional projects throughout the year. Some of your initial goals and objectives will be reprioritized or dropped to accommodate new, higher priority objectives. Make sure that these changes are well understood between you and your manager and formally reflected in your objectives.
Additionally, you may find that some of the metrics used to measure your performance are not accurate or could be improved. Share these ideas with your manager.