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For procurement management success, partnership trumps mandates

 

During my long career in procurement management, I worked with many folks striving to get recognition, senior-level engagement and ultimately move to a higher level of the organization. I often saw the aspirations of these talented individuals frustrated because they weren’t operating in a way that was going to get them where they wanted to go.

 

Most companies can benefit greatly from the skill sets procurement brings to the table. So, what can procurement management folks do to strengthen their position with CFOs, the finance team and business leadership so they can benefit themselves and their organizations? Operate differently.

 

Change your attitude

A lot of it is attitude and approach. Too often, procurement is

the group that is more apt to tell people what they can't do, versus helping them find solutions. Starting work with a new team, I always used to ask this question: "If you were our customer, would you do business with us"? In many organizations, the answer was no. They were not there to help. They were not engaging. They were there in a stand-back way, waiting for people to come to them.

 

I’m not saying that’s easy.  It's always a challenge to break into organizations and get people to change from doing things themselves to working with procurement. One of the things that many people ask procurement managers is, "Do you have a mandate?” Meaning, "Is senior leadership telling people that they have to use you"?

 

That may sound easy on the face of it, but having that kind of mandate is about one of the worst things that can happen to a procurement organization. Work instead to become someone people voluntarily want to partner with. Here’s one example of how to do that.

 

How to avoid mandated 'partnerships'

At one company I worked with, we were having a challenge with a group that went off and did their own thing quite often. One of their deals, a major contract with a services provider, needed the Chief Financial Officer's approval. This was about a $10-15 million deal, and the CFO came to me and asked, "Jack, have your folks been involved in this"?

 

I looked at it and I said "No." He reached for the phone, preparing to issue a mandate. 

 

I said, "Let me handle it."

 

"What are you going to do?,” he asked.

 

I said, "Let me work the process through and see. If you handle it, it's going to be a whack. They’re going to feel that the CFO is telling them what to do.  Then they’re going to have to come and work with us and it's going to be a negative. Let me try to turn it into a positive."

 

Fortunately, he agreed.

 

I called the executive responsible and told him I had heard about the transaction, that I had been asked to take a look at it, and that I would I be happy to do so. I already had seen most of it, but I asked him if he would provide me the information.

 

He readily agreed, and we sat down and went through it. I offered some thoughts and suggestions and he looked at me and said, "Wow, those are some pretty good ideas."

 

I said, "Yeah, but here's the challenge. Where are you with your deal"?

 

"Well, it's already done," he said.

 

I asked, "Can you go back and make some of these changes"?

 

As it turned out, there were a couple of changes that he felt he could make, but several more that he didn't think would fly. I went back to the CFO and said, "None of these are deal breakers. But, I think it could have been a more favorable deal for us had we gotten involved in the beginning." That was fine; it was the best we could do and we still did a little bit better than his original deal.

 

Focus on the biggest win

The big win, and the longer term benefit, was that as part of that conversation the fellow on the business side agreed to make sure he got us involved in future deals.

 

It was a quid pro quo for the two of us. I told him, "You know what? You don't really have the best deal out there.” We agreed on that. I told him how I would prefer to have had the deal structured. We went back and forth, and ultimately agreed on that.

 

I also agreed to tell the CFO that the deal was an okay deal, which it had to be because it was already done. But the commitment going forward was that his functional area and procurement management would work together on transactions like this.

 

The easiest thing to do at the time would have been to go back and tell the CFO the deal was terrible, and let him pick up the phone, chew the guy out and tell him he had to work with us.

 

But what would that have gained for anybody? In my view, nothing. It would've put everybody in an antagonistic mode and made working together difficult. I thought it was better to work with my colleague, demonstrate the fact that we could add value in transactions like this, and win his trust. It worked. He met his commitment and we worked together as business partners on many deals from that point on, to the benefit of everyone.

 

Partnering and engaging is the key to advancing your goals and those of your organization. Don't take an arrogant approach where people have to come and work with you. Avoid building mandatory, governance-type relationships that position you as a bureaucrat or a roadblock in the process.

 

Instead, develop collegial relationships. Help people accomplish what they want to and in the time frames in which they want to do it.  You'll get a lot more people wanting to engage and partner with you and everyone will get a lot more benefit.

 

Jack Miles is the former Secretary for the Department of Management Services for the state of Florida. He serves on Coupa's Visionary Council. A version of this article previously appeared on ProcurementLeaders.com

 

 

 

 

 

 

Jack Miles

Jack Miles  

Jack is an advisor known for his experience developing and executing business strategies and his ability to deliver operational excellence in functions which typically under perform in most companies. He has lead procurement teams in both the public and private sector and is a member of Coupa's Visionary Council.