I came across The Hackett Group’s recently published 2018 Procurement Key Issues Report this week, written by AOP and The Procurement Revolution alumni Chris Sawchuk and Constantine Limberakis. (To download a copy of the report for free, click here)
“While procurement leaders acknowledge the importance of strategic enterprise objectives, including expanding procurement’s influence, elevating the role of procurement, and improving agility, procurement’s ability to address them is low.
The Hackett Group’s research identified four key capability areas where procurement must improve in 2018: aligning skills and talent with changing business needs; measuring and managing procurement performance and business value; obtaining more value from existing suppliers through relationship management; and obtaining more value from existing categories through category management”.
All the above could be summed up with the headline from Accenture’s just published Procurement Masters Report: “Own global business outcomes, not procurement.”
I don’t believe I have had a harder time writing an issue of this newsletter than I have had with this one.
These papers all underscore, in one way or another, something that has troubled me for some time (and the reason I started Art of Procurement). The development areas are ones I recall from throughout my entire career and it seems like we have made no tangible progress elevating procurement. Does this mean that we are struggling to make progress, or that these priorities are so critical to our value proposition that we seek to improve them annually, as part of a continuous improvement journey? Or perhaps that the needs of our businesses continue to shift, and we find ourselves being reactive to their evolution?
Or could it be that as a group we may very well be stuck in cognitive dissonance?
In the end, however, we must find a way to breakthrough; and while there is never a silver bullet, I do believe we best position ourselves for that transformation by working to put the customer – internal and external – at the core of all we do.
Leaving a Mark
The Hackett Group provides us “catalyst-actionable” information. One also finds a few a rays of sunlight in the list of Major enterprise initiatives planned for 2018 (FIG. 2). Notice that the top 6 items are about being a catalyst: transforming culture, elevating the importance of relationship and being the client of choice and doing so in a responsible manner.
The following two figures (3 & 4) caught my eye as much for the information they convey as for how they convey it:
There are two interesting things to me about the lists found in Figures 3 and 4:
- The critical development areas related in Figure 4 are Hackett’s take on what would allow an organization to meet/provide the development goals listed in Figure 3. They are all definitely in the catalyst’s wheelhouse.
- In both lists Hackett evaluates the ability to produce those results (or take on those areas) at no better than “moderate”:
“Concerns about procurement’s ability to address critical development areas go beyond capabilities required to help the enterprise meet its goals. Our analysis found critical development areas that affect the function itself and also highlighted gaps between what procurement believes is important and what it can actually deliver” (I trust a bit of Dunning–Kruger effect is going on in these assessments!)
What also strikes me is that Hackett use “important” as a scale. I would suggest the addition of an “impactful” scale.
Missing from the entire discussion is mindset, a catalyst “way of being”, even though all the analysis points directly to it. Perhaps it is a thing that is hiding in plain sight. Might the “reason” be that Hackett assess the professionals as only moderately good (at best) at these things is that organizations do not highlight or incentivize for catalysts? Another way to look at it is, that in order to level up (move from moderate to high ability), an organization must increase the relative number of catalysts in their midst and importantly, provide the safe space that enables this to occur.
Some questions to ponder:
- Am I tracking with what we, as an organization, want to achieve with our time and attention?
- How would the professional I want to be take on what I am about to take on? How would the group we want to be take on what we are about to take on?
- What would make this conversation relevant tomorrow, next month?
- What is one skill set, workflow process, or approach that I (we) need to own between now and 2021?
- What does progress look like and how is it measured?
Being a Catalyst
As always, if you come across an article, whitepaper, video or podcast that you would like to share with your fellow catalysts, please send a quick email with the details. I read every email and am eager to read yours.
This Week in Procurement
- Four Negotiation Tips from a Hostage Negotiator | Katie Jacobs, Supply Management Magazine
- Samsung Jumps on the Blockchain Bandwagon | Sam King, Bloomberg Technology
- Balanced Perspectives on Small Suppliers’ Smallness | Kelly Barner, Buyers Meeting Point & Palambridge
Plus, check out this article that I wrote for Outsource Magazine:
- Procurement Outsourcing: Warming to the Catalysts in Our Midst | Philip Ideson
This Week @ AOP
Digitization is a hot topic in procurement today, and while it will undoubtedly have a big impact on the future of our profession, it is often difficult to separate the hype from the reality. There are few organizations better positioned to help me explore this topic than HfS Research – a company I have followed for a long time – and their Chief Strategy Officer, Saurabh Gupta.
In this week’s episode, Saurabh provides a “Three Horizon” roadmap. Horizon One technologies are those that must be explored and utilized today, while Horizon Three technologies are those that are more experimental. I also asked Saurabh to share details of HfS’ “OneOffice” thinking, and to answer a question that has long been on my mind: how exactly an analyst research report is written.
The Future of Sourcing Awards
The SIG Future of Sourcing Awards program celebrates companies that are transforming, innovating and leading the sourcing and outsourcing industry. I’m delighted to be involved, and I look forward to showcasing the best submissions across AOP over the coming months, leading up to the award ceremony at the SIG Fall Summit in October.
You can submit a nomination for yourself, an individual or a team in one of 10 categories. Nominations will be accepted until June 8. Visit www.futureofsourcingawards.com for more information.
One Last Thing….
I’ll be on the road again next week, leading a conversation at the SIG SIGnature Event in San Francisco on Wednesday (April 25th) on the topic of creating a team of catalysts, while the next day, Thursday (April 26th), I will be participating in the JAGGAER REV2018 event in Las Vegas. If you are attending either of these events let me know – I’d love to catch up!
Until next time,