If you think Procurement is a forgotten orphan in an evil witch tale

Read this article, if you think Procurement (or any other function, for that matter) in your company is not being taken seriously enough and you want to change it. If it is not considered important enough and you would like it to become a strategic function. If you think, that company does not give your department the opportunity to prove it’s worth. If everything you are expected to do is just have one more price negotiation, chase another late delivery, not issued invoice or resolve errors in delivery. Read this, if you feel like other departments have a big dissatisfaction with procurement. If, no matter what is it that you suggest, it causes more resistance than buy-in from people.

Poser Effect

It actually has got a name: the effect is called Poser effect. And you probably have heard about it in few situations. When talking about the clothes, it basically says that you should wear clothes to fit the role you are after, not your current role. It is a fact, that the clothes you wear, change the way other people perceive you. The effect also was observed in experiments, where it showed, that your outfit also changes YOUR perception about yourself. Scientific name to it is enclothed cognition . So what, you are asking?

You will be perceived the way you behave

And that is the answer to anyone saying “I would do more and bring more benefits to the company – but nobody lets me. Nobody thinks of us seriously.” You will be perceived the way you act. A little part of the overall impression will be your clothes, too (especially for the first impression), but I strongly believe that actions speak louder. It is up to you to show initiative and start acting strategic, prove you’re worth the place at the top table – or – “wearing strategy”.

How do you try on strategic outfit? Choose clothes

It’s slightly easier with clothes, right? But how do you check how (and if) procurement is aligned with company’s strategy? My suggestion is to refresh some classic business management concepts and apply to procurement function in your company.

Most important part – company’s vision and strategy. Firstly (and do not be surprised by the question) – do you know the vision and the strategy of the company? Because not all companies communicate it clearly. Some of them don’t even have one. Anyway, do not panic if you do not know it by heart. There might be a lot of variations on a very detailed level, but on a high scale, there are only three main possible strategies:

• Cost leadership – price strategy;
• Customer intimacy – service strategy;
• Technology/innovation – product strategy.

A company can be relatively good in all of them, but one of them must be the most important. Here are the main differences of main strategic directions.

Looking like this, you will agree, that procurement will have to be different in different companies. There is no “one fit for all”. If you are trying to implement extensive processes in a company that needs speed – do expect a lot of resistance and no buy-in.

How do you try on strategic outfit? Wearing it

Once you have established, what the company is trying to achieve, you have to measure it on your department or function. Again, there will always be a lot of aspects, but business classics focus on three main areas:

• People;
• Processes;
• Technology

Here are the main keywords to look for while checking the application of different strategies in different layers of organization using different strategies:

Wrapping up

Knowing the strategy is the key. Checking, how procurement’s work, goals and strategy is aligned to overall company’s strategy is a first step. If you find any gaps – act on them. Most of the time it means simply getting out of the table and start talking to everyone: business users, suppliers, management. You do not need to change organisational chart to be able to talk to people, do you? Listening to people, identifying improvement opportunities. Looking for answers internally and externally – who, if not procurement, has access to suppliers’ sites and to other, non-competing companies? Start noticing solutions and benefits for the business other than price reductions and bringing them to the table.

Start acting strategic

Once you embrace company’s goals and strategy – and start wearing it – everyone in the company will start considering you strategic.

My son: Mom, let’s talk about hair.

Me: I am listening…

My son: It is too long! Look!

Me: We discussed this yesterday. And the day before that. And the day before that. 

My son: Yes. But that was yesterday. Then the hair was shorter! 

Me: One day is not enough to reach the required lenght for cutting.

My son: But it is enough for you to change your mind! Can we cut it? Please?

Five minutes every day CAN make you better. Better negotiator, better professional, better mom (or dad). This one is for our best teachers – our kids!

This one goes out to all the ladies. I know, I know – we are all beautiful naturally. And (almost) never need any beauty supplies or treatments. But if you accidentally (!!!) find yourself in one of such places – here is what I learned recently.

First and most important – they are all businesses. Smaller or bigger – everyone is in business for business. Therefore, the goals, that they have; problems, that they face and methods, that they use in every day work are the same as you have at work.

New customer attraction

Go there only if you really need or want a specific procedure. Beauty shops, which have more ambitious growth targets, will be more aggressive to get new customers. They will be more flexible with pricing of the first procedure – or even offer it for free. It is good if you, as a service buyer, already have a firm opinion if you need the procedure. Also, if this is a series of procedures – if you are going to use all of them. Then getting one of them free of charge, negotiating prices of the other ones – everything will be beneficial for you.

If you are only curious to try, you might find yourself in a trap, spending money when you had no intention in doing so.

There are some beauty specialists, who do not need any new clients. Or, to be more precise, do not need them at a specific moment in time. Everything changes. If you really want to get there – be persistent and / or patient.

Building dependency

Just like in “normal office business”, service providers like to create dependency. The same rule applies with beauty stores and services. You might be sold:

• Very exceptional service (“only available in this shop in this country”);
• Completely innovative product (and there are oceans of those – every store will have at least few of them. The “newer”, the better).
• Follow up procedures: once you to have the procedure you came for done, you are told, that “follow up refreshers” are needed. Otherwise, “it won’t work”.

A quote from one beautician I know: “they have to need us. They cannot just stop coming”.

Cost and pricing strategies

Oh, yes, they are flexible! A lot. And these are the things you should know to be ready for the price conversation:

• Rent of premises. Services in London will be more expensive than in Grimsby – sounds logic, right?
• Investments into equipment. Service providers, working with old or no equipment at all, will have lower prices.
• Investments into trainings. Self-educated “YouTube specialists” will have different pricing structure. I am not saying the latter is bad – on the contrary: I know some specialists, who are amazing at what they do without any fancy certificates. Instead – they have passion for what they do.
• Ingredients, technology and materials used. The same beautician told me a story of a hardcore negotiating customer of hers: the customer convinced her not to use the local anaesthetic cream (because “she is very brave”) and reduce the price of the service…
• Efficient time usage, bundling. Recipe changeovers for production lines are expensive due to cleaning, downtime. The same here: setting up for a new customer, cleaning up after – it is not efficient time usage, nobody pays for it. I mean – it is not a separate line on the bill. But someone must pay for it. If you can – consider doing several procedures in one go and do not forget to ask for price improvements. If you came to a tanning shop to buy your monthly pass – ask, if they are planning any promotions. Buy when the promotion is on (some places will apply it immediately for you not to run away with your wallet).
• Perception. That works for both sides. Marketing is a very strong tool here. You might be ready to pay higher price because of references or the image that the beauty shop has. On the other side – beauticians are good sellers, too. They will evaluate how you look and will set the pricing based on that (do not overdress the first time you go there). They will observe your body language: if you show signs, that the full set of several procedures is too much for your budget – they will react and adjust to your budget. If you manage to sell the perception of bigger future business (“after this, I will want to do this and the other and then a little bit more”), they will adjust prices.

Easy for me to say. I learned all this already being on the procedure chair. Knowing things is not the same as being able to apply and applying them in real life situations. Care to try the tips next time you are in the beauty shop? Please share experiences!

Ha-ha! Very funny! I bet everyone else (not procurement, of course) thinks, that procurement is all about numbers, cost and budget reductions, limitations, taking away fun and bullying suppliers. Surprise! It is not only that! First of all – its people who work as buyers of all sorts. And most of them do have sense of humour which helps at work a lot.

So how does it work and why should you smile and laugh more at work?

Humour has a lot of benefits:

• Is joyful to yourself and others.
• Keeps things light and breezy.
• Increases employees’ morale and motivation, atmosphere at work.
• Makes embarrassing moments funny (like this one here – when I completely messed when Portuguese won European football championship).
• Helps with sales: builds relationships and keeps things in perspective.
• Blocks stress: increases endorphin and blood flow in general, relieves tension.
• Helps bonding – interpersonal, among team members. Sharing life stories, experiences which were funny, letting others learn from your misunderstandings – all of this brings people closer together.

There can be a lot of different types and forms of humour: verbal humour, physical humour, comedy in print. It is always important to choose best way to express yourself: as in any communication, there are some rules around it.

Do’s:

•  Observe colleagues expressions and reactions – the joke in your head sounds funny, but people are different.
• Keep it clean, short, subtle – jokes are different, people are different. So unless you know the people you are talking to very well – better safe than sorry.
• Respect customers, employer, co-workers. Not much to comment – there is a place and time for everything. We come to work firstly to work.Customers, employers are people paying your salary. And unless you are a professional comedian – you are not being paid for joking all day.
• Count to 10 and participate in moderation. Especially on the moments when you feel like “biting” someone with sarcastic joke – stop and think. And count to 10, if needed, until the urge passes.
• Choose your wording, timing, audience carefully.
• Practice.
• Make mental notes. Just like I did during a meeting with engineers. We were discussing some spare parts suppliers’ changeover and they were concerned about their response timing possibilities. One of the business requirements was that the new supplier has a “hotline”. Only the engineers used different name. They said “o-sh*t-line” (fine, fine – I did not invent this word). There and then, it was an amazing moment of laughter and a silence breaker, which helped people to express their main concern aloud.
• Select practical jokes VERY carefully. From being improper and distracting they can lead to health and safety disasters – and nobody is going to think it is funny.

And another part – don’t’s:

• Sarcasm. No excuse for abuse.
• Put up with insults.
• Don’t be the only one laughing. Or – the only one not laughing.

Another powerful tool is a smile. Smile to people and they will smile back. I practice this a lot. During negotiations, simply in office or on the tube. During negotiations I can ask most serious questions. A question like “so can you tell me then where does your company earn profit, if you claim that your margin almost does not exist?” from a grumpy buyer could be perceived as a form of aggression. While if you do it with a smile – it will be a game of words, not an expression of aggression, but the question will still be there.

Sometimes people get confused – they are no longer used to people smiling at them for no reason. Try this exercise: during your morning commute (especially in crowded places), instead of trying to drill a hole in your phone with your eyes, lift them up, make an eye contact with a stranger and smile. I do that. Yes, i get different reactions. However, most of them smile back.

Most daring experiment that me and my team did with humour was presenting a very serious subject on a quarterly assembly of all centres of excellence. Imagine a hundred people sitting in the auditorium and waiting for a subject “Resisting supplier price increases” to be presented. And what do they get? Check this out…

The message was delivered very successfully. The feedback about that subject was best ever. The content was still serious and good. But at the same time it was not just an ordinary boring presentation:

• our team had the best time ever while preparing the subject.
• people in the audience related to the subject very well.
• it was energizing, different, memorable – successful communication.

Procurement can be and is fun! Happy Friday everyone! Keep on smiling!