Buyers oftentimes find themselves between the literal rock and the hard place. Their stakeholders want it all. They demand lower supplier prices from procurement to then complain about the underlying supply chains being too lean, too static, and too risky. They want constant supplier innovation and the highest sustainability standards but all at no additional costs.
If this was not enough, procurement is constantly challenged on the accuracy of their delivered results. With stakeholders claiming that their numbers are not real, that their efficiency gains are not tangible and do not flow to the company’s bottom line.
On top, procurement’s external stakeholders, their suppliers, also perceive them rather as a necessary evil to overcome than a partner to engage with.
It seems whatever the buyer does they get it all wrong. It is no wonder then that in many cases buyers resign to old patterns of behavior because why bother to change?
How can buyers get out of this dilemma of constantly being in the wrong? How can procurement break free from under the rock and the hard place?
What many procurement professionals have missed realizing is that their job is no longer that of an administrator that should be told what to do, but that of a business leader that is expected to know what needs to be done.
Procurement’s new role is to manage conflicting KPIs and opposing stakeholder opinions. And that is by design.
In fact, procurement is not caught between a rock and a hard place at all but got promoted to a leadership function within their organization, facing the same challenges any leadership position would face: volatility, uncertainty, complexity, ambiguity.
Trying to square the circle is what leadership is all about: a constant realignment of company goals, and conflicting interests, taming the loudest voices, whilst encouraging a discourse on how to balance short-term needs with long-term results.
Procurement needs to start to assume this new leadership role instead of romanticizing old times where a 3% savings target was the only KPI to worry about.
Leadership is hard because it requires one to form an opinion on how to optimally reach company goals. It forces one to have a clear view of how to leverage the supply base, where to invest, and where to cut costs in the supply chain. As a leader procurement is hence tasked to constantly rebalance their priorities to support the business and to push back on stakeholders and their requests that are not in line with the overall company goals.
Leadership includes being an enabler as well as a devil’s advocate. The buyer’s role is to consult their stakeholders and offer arguments and solutions on how to balance and address short- and long-term challenges as well as to restrain ideas that are not beneficial to the organization.
Procurement is no longer that contract executor but a strategic contributor to the company’s success.
To be in this leadership position and to be offered this opportunity is an achievement that procurement should be tremendously proud of. Company leaders have entrusted their buyers to allocate company funds in collaboration with their stakeholders in the best way possible. To bring the best supplier capability into their organization that drives sales and contributes to growth for the company.
All of this is work. New skills are required, new tools are needed, and a new leadership mindset needs to be built.
It is no longer true that internal stakeholders do not understand what procurement does. The tide has turned. Procurement’s stakeholders are very much aware of its potential, its importance, and value. They look for the buyer to step up and finally be the strategic, commercial partner that they need. An in-house consultant that is ready to enter into an adult-to-adult conversation with them, that challenges them on the status quo, and that supports the business to drive company results without just giving in to the loudest voice in the room.
It is hence neither a rock nor a hard place that makes buyers feel uncomfortable these days but the lack of guidance they receive to assume their new responsibilities as company leaders.
As procurement professionals, let’s embrace our newly gained responsibilities and start acting as customer-centric and strategic partners to our company stakeholders today. Not because we have to but because it is the next evolutionary step in procurement.
