Webinar Notes: Aligning Procurement Initiatives to Company Culture

This week’s featured event was hosted by the Next Level Purchasing Association and was presented by Tim Reis, a procurement manager with 10 years of experience, a regular columnist for Next Level Purchasing’s online magazine and a holder of the SPSM certification. Most importantly, he is an active practitioner.

The first mistake we can make as we consider the importance of corporate culture, is brushing it aside as being ‘fluffy’. The idea of culture may be esoteric, but that does not mean it isn’t critical to procurement’s success in very concrete ways. And with the pressure on purchasing and procurement to create value and collaborate, the ‘soft stuff’ IS the ‘hard stuff’. If culture is, as Tim stated, “the stuff that binds and holds things together” then it is also the stuff that binds and holds stakeholders to us and our initiatives - if we align with it properly.

“That’s nice, but we don’t do things like that around here.”

We’ve all faced challenges associated with culture, and probably heard a hundred versions of the above quote. Assuming everyone wants to save money, our initiatives may fail because our approach to them is wrong, even when our strategy and motives are right.

Corporate culture is made up of the collective values and beliefs of that organization. To figure out your company’s culture, consider their broad views on risk, change, process, creativity, approvals, and contract formality. Ask yourself, what personality types are the most influential in this organization? What kinds of projects are the most or least successful?

Tim outlined five types of corporate cultures:

• Hierarchical – traditional, lower risk, e.g. banking
• Dependable –resistance to fast change, emphasis on meetings and approvals
• Enterprising – pure meritocracy that encourages creativity and ‘thinking outside the box’
• Social – built on collaboration, trust, relationships, e.g. non-profits, R&D, small businesses
• Entrepreneurial – high level of competition, must take calculated risks to maintain market share

While identifying the type of corporate culture can be identified by looking at internal personalities, priorities, and values, it may be driven by external factors. Tim recommended doing a situational analysis by studying the external environment and deliberately selecting an optimal response. Just as evolution favors certain traits that preserve a species, industries favor certain cultural values. The banking industry thrives by being conservative, and RIM has struggled for not being dynamic enough in response to demand changes in the consumer electronics market.

If your strategy and objectives are right, you are still at risk if you are not working from the same cultural foundation as the rest of the organization. “That’s nice, but we don’t do things like that around here.” It’s not that your colleagues don’t want to save money. You may just need to slow down, get the buy in up front, and win people over to your idea. Tailor the initiative to the organization as a whole and watch everyone get on board.