In part 1 of this series, I addressed the misaligned nature of the past relationship between procurement and marketing – as well as the disruptive potential for companies that can bring these two teams together. In this post, I will build on the intangible steps marketing and procurement can take to work as a more cohesive partnership by discussing what they can really do to harness collaboration?
Corporate America is School for Adults
First, a trip down memory lane: school. Picture one classroom, where the academic fundamentals were learned, students became familiar with their environment, and an understanding of educational expectations were developed. After mastering this level, multiple classrooms were introduced, with various classmates, subjects, and group projects to encourage and empower students to learn social fundamentals; communication, collaboration, and accepting differences. These educational constructs were learned as early as age 12, but they are often not carried over into the world of business. Corporate America is much like a classroom: an employee starts their career in a function, be it procurement, marketing or the like, and for a time is tasked with learning the fundamentals; to gain familiarity with the strategic initiatives and expectations of the function. After mastering the fundamentals, however, employees should begin to master the same social fundamentals they learned in school; communication and collaboration with other departments, and an understanding of their differences.
To bridge the divide between marketing and procurement, a classroom scenario in which the two can learn directly from one another should be implemented. A physical presence facilitates a greater understanding of the vernacular, priorities, and perspectives of the other function. Direct training in branding, group workshops, and regular ‘team’ updates in which both marketing and procurement are at the table encourages mutual respect and alignment.
Implement an Agency Relationship Management Program
When speaking about alignment between procurement and marketing, it is important that the two agree on what metrics most accurately measure success and drive value. Cost savings is important to both procurement and marketing, but for marketing, it is second to quality. Marketing teams have significantly evolved over the last several years, as have the brands they support, but what remains the same are the following fundamental focus areas: they want to build great brands with the help of great agencies who do great work. How can procurement deliver savings while marketing maintains not only quality work, but fair and equitable relationships with their partners? Through the implementation of an agency relationship program in which supplier performance is monitored based on both cost AND quality.
Agency relationship management is designed to strengthen the partnership between the marketing team [client] and agency, while simultaneously creating a more structured program. One of the most critical components of an agency management program is the use of balanced scorecards. The best scorecards are not lengthy, but concise in targeting the real needs of the marketing team. They factor in both factual, quantitative data—invoices, contracts, ROI—and more subjective, qualitative data—surveys and interviews. This evaluation process shouldn’t end after the initial scorecarding, but should continue in the form of ongoing performance benchmarks.
Another component of an agency relationship management program is the 360 degree feedback process in which both the client and agency share their perception of what is and isn’t working. The goals are to realize alignment, improve performance, and increase collaboration between the two. The 360 degree feedback process not only increases awareness through self-reflection, but also helps to ensure engagement by reminding both parties of their strategic priorities and hilighting where underperformance may exist.
An agency relationship management program allows procurement to collaborate directly with agencies to help exceed their marketing stakeholders’ needs, but not their budgets. Procurement can effectively evaluate incumbent agency relationships, consolidate the selection process, and aid in negotiations to ensure an animosity-free transition to a new agency, or a realigned and reenergized scope for the incumbent agency. The key to a successful program is to remember that good relationships are required to facilitate creativity, and creativity doesn’t have a set price. To refer back to the school analogy, learning and the establishment of clear expectations are critical success factors.
Marketing and procurement have come a long way in recognizing how to leverage the unique skillsets of the other, continuously working towards a mutually beneficial partnership. When marketing and procurement work as a team, they deliver brand momentum and sustainable growth that results in greater business impact.