Agile methodologies challenge businesses to do more with less. Not only that, but they challenge them to do that at a faster pace. Many leading procurement functions are embracing this and are successfully deploying rapid project-management techniques into efforts to improve time-to-market.
While the World Procurement Congress brings the procurement world together in London this week, the global Procurement Leaders community is still very active throughout the world. Last Friday, the Sydney Summit united some of Australia’s most forward-thinking executives where thoughts turned to how they could deliver more from their agile projects.
Outside of technology firms, financial services have been among the foremost pioneers in agile thinking. In Australia, it is no different, and the Commonwealth Bank of Australia (CBA), who co-hosted this event, and many others offered a number of key insights into agility.
An agile mindset takes time to develop – a presentation from Karen Sutton, CPO at CBA, provided a fascinating insight into the realities of applying agility in a traditionally minded organisation. The main finding was that the ‘theatre’ of agile (scrums, stand-up meetings, etc.) were quickly adopted, but people were slow to embrace a truly agile mindset and would actually go back to their old ways of working fairly quickly.
The critical impact of agile techniques, however, is only realised once employees behave in an agile fashion. The methods, principles and values of agile are numerous, and can each be deployed in various situations, but they all stem from a singular mindset. Without that mindset, any number of scrums will not succeed. Sutton said she had challenged herself to create a procurement function that is focused on agility, flexibility and balance.
Agile is starting to challenge procurement’s old mindset – “Processes exist when people have done something wrong,” said one delegate.
They continued by suggesting establishing a new policy was “an abdication of leadership” before going on to say that the fundamental issue related to talent management and bringing onboard the right talent is you trust people to deliver value.
It was agreed that organisations as a whole, including procurement, tend to be reluctant to part with processes that have underpinned business for decades. Executives are quick to deploy policies, frameworks and action documents. But such approaches have only modest success in creating more strategic purchasing.
Agile, on the other hand, demands that staff are not only trusted to plan more forward-thinking projects, but are also empowered to see through their plans and deliver customer value quickly, without allowing unnecessary processes to hinder execution.
Agile is enabling a new type of leadership to emerge – The openness of agile allows organisations to operate a ‘servant leadership style’, in which, said one delegate, “the role of the leader is to make the team efficient, not to report to you”. The visualisation of daily and weekly tasks allows leaders to quickly spot areas that need additional support and focus their attention on anything that is acting as a block.
This is a method in which the ‘theatre’ of agile techniques can begin to shift behaviours and even mindsets. The first behaviour agile project management methods create is the habit of accountability. In that respect, agile leaves few places to hide, which may make corporate survivors uncomfortable. But, for those that embrace the change, and the new spirit of accountability, their actions are more noticeable to the wider company as well as leaders.
Agile is empowering procurement to push back other functions - The main issue with applying an agile philosophy in a financial services firm is the pushback experienced from the three powerful internal functions focused on risk management. For internal auditors, the switch to agile represents a potential material risk. Attendees were quick to suggest that conversations between buyers and risk managers, however, remind them that procurement owns the policies against which it is getting audited. If the auditors don’t like the new agile practices, then procurement should re-write the policies.
This is an empowering notion for ambitious procurement functions. They are better placed to create policies and processes, which help surface functions to deliver rapid value to internal customers. The traditional practices of tenders and P2P processes are useful in so far as they control potential risks, but, if they slow execution, alternative, more agile practices can be considered. Agile processes are not a rejection of these controls (true agility requires rigour and structure) but an introduction of speedier methods into the business. If procurement can successfully implement these projects it can also reform the risk control policies deployed to audit company-wide purchasing.