Why isn’t your function seen as the strategic value creator you know it is?
Procurement typically relies on two big stories to tell the CEO or other stakeholders:
Story one: Functional Transformation.
Procurement is changing. Fast. Digitisation is revolutionising the sourcing and P2P process. As a forward-thinking procurement leader, you are investing, keeping up and even stretching further than others. You expect the board to be as excited about this as you are. But are they?
Story two: Results and Performance.
You have contracted with the CFO to define meaningful metrics of Procurement performance and you are showing improvements across the scorecard. Everyone is delighted, but you soon start to notice that the savings and other achievements are simply banked and used as the base for next year’s stretch. Where is this road leading you?
For the CEO, the internal workings of your functional processes are frankly not interesting and year-on-year improvement in your results and ROI is a given. What you need to do is to grab their attention with something that changes how they think about their business and moves them to act.
That’s why you need a third story to tell: Transformational Sourcing Categories.
In every industry and every company there is a very small handful of sourced categories that have the potential to fundamentally impact the direction of the company. Forces that drive these categories are typically:
- Innovation that can lead to new growth opportunities
- Sustainability risks and opportunities – especially when the category is very close to the final brand or product
- Structural long-term availability or pricing risks
- Radical reshaping of the supply industry
And others..
Your challenge is to identify these issues, create a powerful call to action at the most senior level in the business and then to mobilise and lead the large and complex cross-functional effort needed to respond to them.
This takes two things.
- Expertise and strategic perspective
- The time needed to go deep and get to the heart of the issues and to craft the message
If you’re a CPO then you almost certainly have the first, but not the second.
With half a lifetime of experience of these issues and how to present them I will work with you and your team to make this happen and give you the ammunition you need to put Procurement where it belongs – at the heart of shaping the company’s future.