Hugo,

Fantastic post and very appropriate. The point that people matter most is spot-on; it’s a message I constantly reiterate in my talks, articles and discussions with senior executives in client businesses.

Many organisations continue to fall into the trap of thinking they can achieve sustainable purchasing success through technical tools like spend analytics, SRM and so on. But they forget that wonderful meals are never created by the cooking tools or ingredients; it’s always the chef that’s the key factor. So too are people the key factor in building purchasing success. Because it’s people that do the work, and it’s people that create performance, good or bad; not computers, strategies, fancy presentations or “world-class” tools.

The requirement to sift through Procurement staff to identify those who are ‘Ambassadors’ and those who are ‘Assassins’ is crucial. Ambassadors ‘get it’, and are engaged with the Procurement agenda. Whereas Assassins hinder functional capability and damage Procurement’s brand – they might need re-calibration, development support or encouragement to find their destinies elsewhere.

The range of skills you identify makes sense, though I’d add ‘Self-leadership’ as another critical skill.

Often talent assessment and skills development in Procurement places too much emphasis on technical skills. Yet it’s competence in ‘soft’ skills that creates a great purchasing person, especially in senior management roles. Good Procurement managers are business leaders with organisational savvy, not purchasing geeks.

Building people capability, as you point out, is a cornerstone of creating an effective Procurement function. I still see many Procurement transformations that focus on improving financial performance, via cost savings and ROI, for example, without enhancing the underlying effectiveness of the function. Such efficiency measures never reveal the true picture – you can be very efficient at doing the wrong things. It’s no surprise that some Procurement functions seem to go through “transformation” after “transformation”. The job is not that complex, and the world is not that byzantine either.

Those that seek lasting purchasing success without building underlying functional effectiveness will discover that you can’t draw water with a sieve.

A series of keynote speeches I gave for the Chartered Institute of Purchasing & Supply (CIPS) focussed on this issue. The route to enhancing Procurement effectiveness involves 5 fundamental actions;

  1. Build an effective Procurement organisation
  2. Deploy enablers (processes, systems and tools) that are fit-for-purpose, not necessarily “best-in-class” or “world class”
  3. Manage the supply base robustly, balancing good risk mitigation with extracting value (not the same as “cost reduction”) from suppliers
  4. Apply common-sense performance management to Procurement staff; suppliers; Procurement projects or initiatives; and the overall function
  5. Build the Procurement brand, and reposition Procurement in stakeholders’ perceptions.

It is impossible to achieve sustainable purchasing capability and success without these fundamental actions. But it all starts with building an effective Procurement organisation. And people are the molecules of any organisation. So, of course, as you very rightly put it, people matter most. 

I should add that the very nature of the purchasing job, sitting between the organisation and external supply markets, makes it even more vital for talent development to emphasise ‘soft’ skills. The purchasing job may not be that complex, but it sure is challenging. It’s a challenge often about our ability to master relationships with others, and with ourselves.

But challenges are there for our growth. And we learn best by doing. Or at least by trying, to succeed; to be making our best efforts, directed at the actions that will give us the outcomes we want, i.e., to be effective.

It’s rarely a walk in the park. I know from my own experience how frustrating things can sometimes get.

But each interaction or task we have gives us another opportunity to try again, and learn from the experience. The varied stakeholders Procurement people have to interact with are ample opportunity for ‘practice’!

The principle of trying to be better each time echoes Ed Luttrell’s comments on the efficacy of training. It’s true that training is not always the most effective mechanism for talent development. Though it’s often appropriate and efficient for technical skills, ‘soft’ skills or behavioural competences are best developed and nurtured through practice – learning by doing. And when that can be supported by good coaching or mentoring it’s even more effective.

You can’t teach a young man how to woo beautiful women in a training room. He’ll only really master the art from his experiences, good and bad. And if, in addition to his attempts, he gets counsel from Casanova, …  well, the sky really becomes his limit!

Of course, Procurement people who really want to excel, and be better than average, must take responsibility for their own growth and development. But any efforts to help people grow, whether through a transformation initiative or not, is an added bonus.

Investing in building Procurement’s ‘people capability’ is an investment in the only true asset the function has. Because it’s people that create performance, good or bad; as Hugo truly states, people do matter most.

© Sigi Osagie 2013. Features advance extracts from Procurement Mojo® by Sigi Osagie © 2014

Comment made on Procurement Leaders blog, 6- and 7-Dec-2013, in response to the post “Procurement Transformation – People matter most” by Hugo Eckseler, 3-Dec-2013