Procurement Wears Strategy

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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.

strategies

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:

keywords
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.

 

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Procurement Wears Strategy

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