The Importance of Behaviours in Procurement

Transcription

1 The Importance of Behaviours in Procurement Senior Procurement Executives on How Behaviours and Soft Skills will Shape the Future of Procurement In February 2016 Langley Search & Interim partnered with David Loseby, Group Procurement Director at Arriva to host a round table discussion on the importance of behaviours and soft skills in procurement. Focusing on behavioural economics, David Loseby s recent research evaluates the changing face of procurement, the impact of behaviours in Supplier Relationship Management (SRM) and the skills and behaviours vital for effective procurement in the near future. Senior procurement executives from across the UK came together to discuss the importance of soft skills and behaviours in procurement; below we have outlined the interesting ideas and conclusions of the discussion, including the problems currently faced by procurement professionals and how best these can be addressed by investing in behavioural development and soft skills. What problems and issues is procurement currently facing and how can these be improved by investing in behavioural development and soft skills? There is a broad acknowledgement from procurement functions across the UK that there is both a practical use and application for the principles established in behavioural economics in procurement. Today s fast-paced economy coupled with rapid global changes, such as the evolving complexity of supply chains and increased pressures to simultaneously improve efficiencies, savings and SRM means that we need to proactively change both the habits and stereotype of the procurement professional. Procurement needs to wake up from the sleep of habit. Gerard Chick Chief Knowledge Officer Optimum Procurement Group

2 Too often those in procurement do not pursue Continuing Professional Development (CPD) or look outside of the profession for new ways of working or ideas. In the past, we have not consciously questioned how we behave or why we do what we do and we have often fallen into the habit of unconsciously complying with standard processes when in fact there may be a better, more efficient or effective way of doing something, if only we could employ our initiative. Linearity tends to underpin procurement functions and in terms of data and information this may be incredibly useful, but knowledge is often not gained in a rigid, linear fashion. We must allow more flexibility in our approach to change how we develop and expand our knowledge. Effective procurement also requires constant innovation: we need to continually refresh our behaviours and our skills. Becoming more consciously aware and recognising the need to change the self is the first step in addressing these issues. If we adopt the approach of learning by doing, we may have to accept that the act of making a mistake is acceptable and sometimes necessary in order to learn from our actions and advance the self to enhance how we operate as individuals and as teams. Is there a significant link between good soft skills and effective procurement and a link between awareness of the behavioural aspects and business success? My most effective teams have been successful because they have connected, communicated and collaboratively worked together. It s all about the environment connecting with people and understanding what they value and what drives them will give you your best performers. Nicola Dunne Procurement Change Consultant Oxford University Press Displaying optimum behaviours is not just an imperative to procurement: it serves a purpose cross-functionally and has organisation-wide benefits. A majority of senior leaders seem to recognise the importance of excellent behaviours to procurement functions and the strong link between effective procurement and business success, but the problem lies in how to take action. There s a bridgeable gap evident between the skills and behaviours of individuals and where they need to be in order to progress but how can we get them over to the other side? Standard processes and one-size-fits-all assessments do not get to the core of a person s capabilities, personal desires and values and determine how they will interact with other people this type of standard testing cannot give a complete picture of the individual and the unique value they will bring to the team. But how can we accurately assess this?

3 Executives often recognise the core skills that their organisation needs, but might lack the ability and resources to make a core change in their team. Fundamentally, we need a reason to change the way things are: we need to recognise and evidence the value of the improvements we want to make. Are the procurement requirements across different industries and sectors similar in this area of thinking? Optimum oft skills and behaviours are important to procurement, but the specific requirements for each can often be wholly dependent on the industry or sector in question, for example, the many different requirements of the public and private sectors. Private businesses and public sector organisations are recognised as radically different environments, with the latter seen as more compliance-oriented but not without a need to innovate and create competitive advantage. In some ways however, the necessary behaviours in procurement are the same across industries and organisations. Each business is a team, and every person in that team needs to know what they are buying and why. Every business has moving priorities we have narrow windows in which we can sell, so we need to fit into the needs of each department and speak their language. Unless we practise open and constant communication and build rapport, procurement teams across every sector may continue to be seen primarily as a support function mostly concerned with cost-cutting without adding real value. I have worked in both the public and private sectors; each has very different targets and different priorities. In public organisations, shifting that mind set from C for Compliance to C for Commercial is a big challenge. Faiza Rasheed Director of Procurement & Supplier Management Circle Housing Group How can we promote and popularise awareness in the value and advancement of excellent behavioural procurement in the profession? In procurement specifically, there can tend to be a lack of leadership and governance in this area. A Board Director with senior expertise in procurement will inherently understand the value of your team and if you get a place at the table you can bring your department with you. The attention and investment in procurement by the board will play a huge part in the ability to make changes to the function and eventually in achieving the buy-in from the whole organisation. Effective governance and leadership is essential to driving the right behaviours and developing quality employees as well as removing poor practices.

4 In looking at how we can promote procurement and increase our popularity, we need to look at what we have done historically to achieve this. How are we marketing procurement? What are we saying about ourselves and why we are important? It goes back to evidencing how we are really adding value and requires emotional intelligence: we need to train our staff on the value proposition and how to present it. Sometimes it can seem that procurement speaks an entirely different language to the rest of the business. We need to remedy this to ensure that we are speaking the language of our business to help them understand why we add value and how we can work together. Alan Day Chairman and Founder State of Flux Sometimes as procurement professionals we can become so defined in our box that what we are speaking about becomes a foreign language. Ultimately, we are now seeing a real disconnect with the value we actually bring and the value we are perceived to bring to our organisation. We constantly think that there s one way of getting the right deal and we rarely actually have conversations between our team and with the rest of the organisation about how we can best deliver the critical business imperatives. We need to consider a radical rethink procurement has to constantly reinvent itself. Procurement has a unique problem. Every person, whatever their professional position, is a buyer in their personal life. We have to prove that we execute it better. Procurement needs to sell its own value we need to give businesses and departments something that they couldn t have thought of or successfully actioned themselves that really benefits them. Can we link specific approaches or skills to specific outcomes? With the link between optimum behaviours and effective procurement already established, could putting together a toolkit for the unknown unknowns i.e. the things that we do not know we do not know, prove a proactive solution? If we want specific outcomes, we must use training, development and incentives to drive the corresponding behaviours that we need we have to lead the change ourselves. We need a relationship with our teams and across departments in our businesses day in, day out to have any influence and any real rapport. The business of procurement is business it affects the entire organisation. Of the skills needed for SRM, only one is receiving more training than is required: negotiation. Alan Day Chairman and Founder State of Flux

5 In terms of hiring, we need to try actively to attract candidates with specific skill sets to obtain the outcomes that we want to achieve. We need to look at a person s CV and qualifications first, but then take a closer look at the softer competencies: social abilities and life skills. We also need to keep our teams fresh by continually examining and making necessary changes to our own behaviours and that of our senior people as well as new grads who join our teams. The future of procurement: ways of working, emerging trends, risk factors In terms of hiring, we need to ask: where are all Procurement currently operates under a shield of profitability: if we re making a profit, why should we change? Gerard Chick Chief Knowledge Officer Optimum Procurement Group our grads going to come from? Broader mind sets can be brought in by graduates purely because of the fact that they have different experiences and unique perspectives on the world. The grads of the future are not necessarily going to want, already be on or desire the narrow career path that today s traditional procurement might offer them so how do we attract, retain and develop this talent? A broader career path is needed to create these future leaders: rotation and job swapping might be interesting ways of opening people up to other skills and considerations. We also need to break down inhibitions and barriers and change perceptions to move out of the rigidity we currently have and give flexibility to our teams in terms of career paths. We need to keep procurement an interesting and attractive option to obtain the best talent. Processes are easy to teach and to learn, but excellent commercial acumen is hard to find. The top skills that procurement executives will be seeking in new team members might include: Determination and perseverance Curiosity Resilience Proficiency in establishing and maintaining relationships Excellent communication Being highly personable Can we make procurement as easy as buying on Amazon? We need procurement to be immediate, hassle-free and with instant value. Ian Brooks Global Procurement Director Indirects & Policy Tate & Lyle

6 There is a recognition across procurement executives that the delineation between operational and strategic procurement will become more pronounced going forward and for those working at the high end the demand for better skills will increase in the next 3-5 years. The procurement of the future will require frictionless decision making in the realms of Amazon internet and mobile shopping and click-and-collect purchasing; we will need highly intelligent and technical people to make this possible and we must preserve our minority of strategic procurement professionals. Does an ideal procurement person/personality exist? Communication is the most critical competency for procurement, and everything else will follow. Faiza Rasheed Director of Procurement & Supplier Management Circle Housing Group Building relationships, communicating across different cultural environments, excelling across all levels in the business: these skills and behaviours are urgently needed by procurement functions but are becoming increasingly difficult to find. In particular, the characteristics that are sought in junior procurement people objectivity, data analysis, process, logic skills, segmentation, facts and analytics are the polar opposite of the qualities that businesses desire in their senior executives. This presents a huge challenge for people who want to progress through the procurement function and it needs to be urgently addressed to ensure that the odds are not stacked against junior procurement professionals and therefore that the function does not miss out on top talent. Ultimately, to achieve an effective procurement department and contribute to business success, we need a wide range of skills and behaviours that are highly relevant to the individual needs of the organisation. We need a range of skills and abilities we need every type of procurement person, from analytical thinkers and problemsolvers to good people persons. We should examine this issue in an organisational context. Laura Opara Global Category Director

7 How can we best facilitate the improvements of procurement teams and the recognition of the importance of optimum behavioural procurement going forward? Procurement can often drive its own behaviours. Robert Copeland Procurement Director UK & Ireland G4S There s a definite differentiation between the public and private sectors and indeed between organisations themselves. There s a particular problem that affects every single procurement function across the UK: how we can get our value recognised by governance. To achieve the recognition of and investment in procurement, we need to express ourselves and evidence our worth by using business speak instead of procurement speak. Procurement cannot continue to operate with a one size fits all approach we need a more flexible approach to account for what fits with each sector, organisation, team and individual path. We must provide the necessary training and development for each individual to get to where they want to go, and where we need them to go, in order to secure the success of the procurement function and the business. How can we make changes to get the flexible, curious people we want? Resilience seems to be one of the key skills desired by many different types of organisations in the future. There s a definite segmentation of operational to strategic and this needs to be reflected in the way that we look for new hires and develop our teams. We need to think very carefully about what to do to help our people going forward, our biggest investment needs to be in our people. Some of the biggest challenges we have are often self-imposed it s up to procurement itself to make the changes we need. Summary: How Can We Follow Up and Commit to Actively Making these Changes? To summarise the discussion, one of the most critical challenges anticipated by senior procurement leaders will be accessing transferable competencies from Behavioural Economics (BE) and incorporating these into effective Behavioural Procurement (BP). The inflexible processes and ways of working currently practised by many procurement functions mean teams are constrained by traditional and more static ways of thinking: we only trust what we already know is successful.

8 Procurement executives are starting to recognise the need for and potential benefits of soft skills i.e. behavioural competencies, and that these skills will be required in the very near future. Particular behavioural qualities such as trust, credibility and reliability will be increasingly valued over traditional analytical and savingsrelated abilities, however the operational elements of procurement have equal opportunities to benefit from BP. Ultimately, to change the mind-set of procurement functions and indeed whole organisations to recognise and proactively seek the relevant behaviours instead of arbitrary formulas like four box matrices, we need more than a one-dimensional approach a change of Leading Providers of Executive Search A move from more rigid tool kits to competency kits will enable the growth and development required to help teams discover and fully take advantage of all the potential opportunities for improvement. David Loseby Group Procurement Director Arriva behaviours on a dual axis of self and entity, i.e. both within the individual and within the stakeholders and supplier community is the key to unlocking the practical effectiveness of Behavioural Procurement. David Loseby and Langley Search & Interim will be holding a follow-up event on behavioural procurement in spring To register your interest, please contact us at aimee.treasure@langleysearch.com. Further details will be provided to interested parties imminently.