25 Quotes & 75 Questions to Boost Your Thinking on Procurement Success

25 Quotes & 75 Questions

TO BOOST YOUR THINKING ON

Procurement Success

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COPYRIGHT © Sigi Osagie 2014, All rights reserved.

This presentation includes content and illustrations from Procurement Mojo – Strengthening the

Function and Raising Its Profile by Sigi Osagie, published by Management Books 2000 Limited,

September 2014.

No part of this presentation may be reproduced, distributed or transmitted in any form or by any

means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission

of the publisher and the copyright-holder.

About Procurement Mojo

Procurement functions that achieve true success and enjoy great

esteem across the wider organisation are those that are effective.

They focus effort on the right actions to sustain capability, support

enterprise goals and maintain a credible ‘Procurement brand’ –

they’ve found their Procurement mojo!

Procurement Mojo – Strengthening the Function and Raising Its

Profile is THE definitive guide to building a credible Procurement

brand and a capability to match. It reveals practical techniques to

strengthen Procurement and raise its profile in the wider enterprise.

Drawing on his extensive experience of establishing and revamping

procurement & supply chain functions, Sigi Osagie shows how to get

your Procurement function firing on all cylinders. He uses real life

‘war stories’ to illustrate the importance of effectiveness and how to

up your Procurement game.

LEARN MORE at www.procurementmojo.com

http://www.sigiosagie.com/

http://www.procurementmojo.com/

Effectiveness is central to success in any realm of life. It

means doing the right things to get what we want.

Procurement effectiveness is about taking the right actions to

achieve the outcomes we want. You can’t win the lottery

without buying a lottery ticket!

Procurement Mojo – Strengthening the Function and Raising Its Profile

www.procurementmojo.com

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Most purchasing people agree that what Procurement wants

boils down to 3 things fundamentally;

(1) The capability to deliver on its functional obligations

(2) The ‘organisational space’ to get on with delivering those

obligations, and

(3) Recognition of Procurement’s value-add across the wider

organisation.

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True Procurement success is more than the conventional

notions of delivering “cost savings”.

The issues that prevent most Procurement functions from

achieving sustainable success tend to be the ‘soft’ issues, not

the technical issues we traditionally focus on.

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Procurement effectiveness means taking the right actions to

achieve sustainable functional success;

(1) Build an effective Procurement organisation

(2) Deploy enablers (processes, systems and tools) that are fit

for purpose

(3) Manage the supply base robustly

(4) Apply an appropriate performance management framework

(5) Build your Procurement brand.

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An effective organisation is foundational to your Procurement

mojo – because people matter most.

Those that seek “procurement excellence” without building

underlying organisational effectiveness will discover that you

can’t hold water in a sieve.

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Effective Procurement organisations consistently achieve

their goals and deliver sustainable long-term

performance success.

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Effective leadership is the keystone of building an effective

organisation; because a fish rots from the head down.

Get an effective Procurement leader, first and foremost.

Leadership is the glue that holds it all together.

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An effective Procurement leader is a ‘business leader’,

not a ‘purchasing geek’.

Inspiring people in the Procurement organisation is a vital

aspect of effective functional leadership. Procurement leaders

must make their people feel they are part of something special

and are making a valued contribution to enterprise success.

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SOME THINGS TO THINK ABOUT…

Ask yourself these questions – what do the honest answers reveal?

1. What is our Procurement leader’s leadership style, and is it effective?

2. How visible and accessible is our Procurement leader, and does he / she exude and propagate positive energy?

3. Does our Procurement leader provide clarity of purpose and direction to our purchasing people?

4. How well does our Procurement leader inspire our purchasing people, and align human capital and other resources towards a common purpose?

5. Does our Procurement leader invest adequate time and effort in developing our purchasing people?

6. Does our Procurement leader ‘walk the talk’ and espouse positive values and personal credibility?

7. How well does our Procurement leader champion the Procurement function and nurture effective relationships for the function’s benefit?

8. Is our Procurement leader a ‘purchasing geek’, or a ‘business leader’ with a strategic mindset, commercial nous, great people management abilities and organisationally savvy?

Goals are the North Star around which the

whole Procurement function must be aligned.

Not having goals for any organisation is equivalent to setting

out on a journey without a destination. Or, put another way, if

you swing at nothing you will hit it.

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9. Does our Procurement function have clearly defined SMART objectives?

10. How robustly do our functional goals align to the corporate goals and strategic direction?

11. How well do we understand our stakeholders’ needs, and where is the voice of our ‘internal customer(s)’ and the external customer in the goals we have defined?

12. Is there a shared belief among Procurement staff in the goals of the function?

13. Is there a functional strategy or route-map in place to achieve our goals?

14. Are we in Procurement all clear on our functional goals and the priority actions that will enable us achieve success?

15. Have we communicated our goals and direction widely and effectively to our stakeholders?

Procurement functions, like all organisations, are about

people.

It is people who do the work and deliver results, not computers,

strategies or processes. Those things are simply tools or

enablers we use to get the work done. So people matter most.

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The aggregated talent of your people is the most valuable

component of your functional balance sheet.

You can never achieve true Procurement success without

developing your people capability, even with best-in-class

processes and systems and a sound strategy.

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16. Do we have the right aggregate talent and functional capabilities to achieve our priorities?

17. Do incumbent Procurement staff have the requisite level of technical competencies and soft skills for their job roles?

18. Have we aligned our people and resources around our goals and key priorities?

19. Is the organisational structure clear? Is it appropriate and effective? And does it adequately align to our priorities?

20. Are roles and responsibilities clearly defined and known to all?

21. Do people’s job roles provide adequate opportunities for learning and development?

22. Do our purchasing people understand how their individual work contributes to Procurement’s goals and the success of the wider enterprise?

23. How do our people really feel about working in our Procurement function? Do they feel engaged and inspired? What evidence is there?

24. Are we investing adequate effort and resources in developing and sustaining our ‘people capability’?

Procurement ‘performance success’ is not just about the

numbers or hard tangible results; how we go about achieving

the numbers (the behaviours and attitudes we exhibit) is as

important as what we achieve.

Recognise and reward good performance in ways that reinforce

the desired organisational values. Inappropriate reward

structures drive suboptimal behaviours, attitudes and,

ultimately, performance.

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25. Do our people all have individual objectives, and are they aware of their performance against those objectives?

26. Do those individual objectives align to the department goals and priorities, and are they appropriate for the job roles?

27. Are individual objectives SMART and adequately stretching to provide opportunities for growth?

28. How well do we keep score on individual performance? Is performance measured, reviewed and discussed with individuals? Do we measure what is important, or what is conventional or easy to measure?

29. Do we manage performance to imbibe tangible or ‘hard’ aspects as well as behaviours and attitudes or ‘soft’ aspects?

30. Are people held accountable for their performance and behaviours?

31. How do we recognise and reward good performance, and how do we highlight and address poor performance?

32. Do we have an equitable approach to rewards based on desired performance and behaviours?

33. What messages are we sending out by the way we reward good performance and tackle poor performance?

Culture is everything in any organisation. It is the embodiment

of who we are collectively and what we stand for

– our organisational DNA.

The culture in your Procurement organisation says more than

any scorecard, sourcing strategy or P2P process. It reflects what

your Procurement function is about.

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Your Procurement mojo demands a culture that espouses

progressive values – values that ignite people’s passions and

drive positive attitudes, behaviours and performance.

Yet it is our attitudes and behaviours at an individual level that

shape the culture in Procurement. So are YOU a ‘Procurement

Ambassador’ or a ‘Procurement Assassin’?

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34. What is the culture in our Procurement organisation?

35. What does the culture say about us? And how does it support or hinder our functional effectiveness?

36. Have we clarified our desired behaviours and values to all our purchasing people?

37. Does our culture adequately embody the values we espouse – values that ignite people’s passions and drive the behaviours for success?

38. How do I, as an individual, contribute to the culture – am I a Procurement Ambassador or a Procurement Assassin?

39. Do I embody effective self-leadership in my thinking and day-to-day activities?

40. Do I spend the bulk of my time on things that are truly important rather than things that are merely urgent?

41. What should I be doing, or doing more of, routinely to nurture a progressive culture that supports our Procurement effectiveness?

Deploying enablers (processes, systems and tools) that are fit

for purpose is more important than the quest for “best-in-class”;

best-in-class may not always be best for your Procurement

function and its particular context.

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Adopt sound processes that simplify your operations,

including supply risk management and Supplier Performance

and Relationship Management (SPRM).

People find it easier to understand and follow simple, clear and

pragmatic processes.

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It is people who make enablers fit for purpose, or not.

When you examine Procurement processes, systems or tools

that are not fit for purpose, the underlying root-cause issues can

usually be traced back to decisions, thinking patterns and

actions by ‘people’.

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42. Have we defined and implemented processes, systems and tools that enable people to be effective in their work and deliver their results efficiently?

43. Are our processes formally documented and well communicated?

44. Do the processes clearly articulate the process steps; responsibilities; and outputs / deliverables?

45. Are all process steps value-adding; have we eliminated all value-draining / non-value-add activities from our processes?

46. Do the documented processes reflect actual working practices?

47. Are our systems, tools and other enablers truly fit for purpose? Are staff adequately competent with these enablers?

48. Do our enablers fully leverage technology to maximise efficiency and productivity?

49. Are there any non-Procurement-led enterprise processes which hinder our Procurement effectiveness?

50. How well do our Procurement enablers align to our functional responsibilities and goals?

The supply base is simply an external aspect of the enterprise

value chain. Think of suppliers as an extension of Procurement

capability.

The performance of suppliers is reflective of Procurement

itself and what it stands for. Nurturing effective relationships

with suppliers is as important as managing their performance.

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51. Do we have a structured supply base management agenda, and how well does it align to our corporate strategy and enterprise needs?

52. Do we adequately incorporate actual or demonstrated supplier capability and reliability to our sourcing decisions?

53. Are we in Procurement deeply versed in knowledge of our supply markets, with solid understanding of market forces and levers?

54. Do we routinely manage supplier performance and relationships in a structured and cohesive way?

55. Do we deploy comprehensive risk management across our supply base or supply management activities?

56. Is our supply base management effort proportionally focussed on those vendors that are truly critical or strategic to our enterprise?

57. How well do the business / technology roadmaps of our key suppliers align to ours?

58. How well do we identify and leverage intelligence and industry expertise in our supply markets to enhance value, reliability and innovation?

Procurement initiatives which do not have a predefined

process must be managed with the discipline of

project governance.

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Great Procurement functional performance only comes from

great performance in the 3 ‘engine rooms’ – individuals,

projects and suppliers.

Your Procurement performance management framework must

span the 3 performance engines and the aggregate functional

performance.

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59. Have we defined performance objectives for individuals, suppliers and our Procurement projects that align to enhanced functional effectiveness?

60. How well do we keep score across the key dimensions of our performance? Do we measure what is important, or what is conventional or easy-to-measure?

61. Are our approaches for performance management of individuals, suppliers and Procurement projects aligned, consistent and coherent?

62. Do we report, review and communicate our actual aggregate functional performance with a structured, formal scorecard?

63. Are our KPIs appropriate and indicative of the things that really matter to drive enhanced Procurement effectiveness?

64. Do we tackle underperformance robustly and identify necessary improvement actions to stay on-course for our Procurement mojo?

65. How well do we follow through on defined improvement actions?

66. How does our actual performance compare to our stated goals and to best-in-class benchmark standards?

Purchasing folks can learn a lot from successful consumer

product brands – develop organisational savvy and create a

strong brand positioning for your Procurement function.

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Positioning Procurement effectively is about creating positive

brand perceptions; because Procurement’s influence in the

enterprise is largely determined by stakeholders’ perceptions,

not the organisational structure.

The more stakeholders feel that Procurement is meaningful to

their organisational existence, the better Procurement’s brand

position.

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If you were running your own business and your stakeholders

were your customers, how would you handle them, knowing

they are the source of your daily bread?

‘Connect’ with your stakeholders emotionally to gain rich

insights on their drivers and motivations, and how you can be

more meaningful to them.

Effective stakeholder engagement intrinsically entails shaping

their perceptions of Procurement.

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Leverage effective PR to position Procurement in

stakeholders’ consciousness such that their perceptions of the

function are favourable.

Procurement PR is vital because in today’s organisational

landscape it’s no longer adequate to be doing a good job; you

must also be perceived as such.

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Selling a Procurement brand proposition that doesn’t match

the delivery capability is like selling a sports car to a punter only

for him to discover it’s been built with a scooter engine.

Your brand building efforts must be backed up with solid

functional capability and delivering results.

A credible Procurement brand is the pinnacle of functional

success.

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67. Is our Procurement function positioned to provide clear leadership of purchasing activities and relevant contributions to enterprise priorities? Is our approach integrated across our internal customer operations?

68. How well aligned is our Procurement function with Finance? Are our purchasing governance protocols effectively integrated with enterprise financial management activities?

69. How effective is our communication – to the Procurement team, to internal customers, to other stakeholders and to senior executives?

70. How effectively do we manage internal customer expectations and relationships?

71. Is our Procurement value proposition to stakeholders clear and compelling, and does it align appropriately to their organisational goals and priorities?

72. Do we measure / monitor our service to internal customers, and how satisfied do they feel about our service delivery performance?

73. Do we leverage effective PR to propagate a high profile and consistent visibility for Procurement?

74. What is the brand awareness of our Procurement function across the enterprise, and how favourable are the perceptions of Procurement held by stakeholders?

75. Do we have a credible Procurement brand?


Visit www.procurementmojo.com to learn more.

http://www.procurementmojo.com/

Business

25 Quotes & 75 Questions to Boost Your Thinking on Procurement Success