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In this guest post, Procurement Leaders invites former procurement chief and member of Coupa's visionary council Jack Miles to look at why the quest for a mandate can often trip procurement into becoming difficult to partner with.
Starting with a new procurement team, I always used to ask this question: "If you were our customer, would you do business with us"? In many organizations, the answer was no. They were not there to help. They were not engaging. They were there in a stand-back way, waiting for people to come to them.
To win the respect of senior management and join their ranks, work proactively on becoming a resource and a value-added business partner to your colleagues across the business.
Most companies can benefit greatly from the skill sets procurement brings to the table. So, what can procurement folks do to strengthen their position with CFOs, the finance team and business leadership so they can benefit themselves and their organizations?
Operate differently. A lot of it is attitude and approach. Too often, procurement is the group that is more apt to tell people what they can't do, versus helping them find solutions.
I'm not saying that's easy. It's always a challenge to break into organizations and get people to change from doing things themselves to working with procurement. One of the things that many people ask about procurement is "Do you have a mandate?” Meaning, "Is senior leadership telling people that they have to use you"?
Well, having that kind of mandate is about one of the worst things that can happen to a procurement organization. Work instead to become someone people voluntarily want to partner with. Here's one example of how to do that.
At one company I worked with, we were having a challenge with a group that went off and did their own thing quite often. One of their deals, a major contract with a services provider, needed the chief financial officer's approval. This was about a $10-15 million deal, and when the CFO came to me I said, "Let me work the process through and see. If you handle it, it's going to be a whack. They're going to feel that the CFO is telling them what to do. Then they're going to have to come and work with us and it's going to be a negative. Let me try to turn it into a positive."
Fortunately, he agreed.
I called the executive responsible and told him I had heard about the transaction, that I had been asked to take a look at it, and that I would I be happy to do so. I already had seen most of it, but I asked him if he would provide me the information.
He readily agreed, and we sat down and went through it. I offered some thoughts and suggestions and he looked at me and said, "Wow, those are some pretty good ideas."
I said, "Yeah, but here's the challenge. Where's your deal?"
"Well, it's already done," he said.
I asked, "Can you go back and make some of these changes?"
As it turned out, there were a couple of changes that he felt he could make, but several more that he didn't think would fly. I went back to the CFO and said, "None of these are deal breakers. But, I think it could have been a more favorable deal for us had we gotten involved in the beginning." That was fine; it was the best we could do and we still did a little bit better than his original deal.
The big win, and the longer term benefit, was that as part of that conversation the fellow on the business side agreed to make sure he got us involved in future deals. I told him how I would prefer to have had the deal structured. We went back and forth, and ultimately agreed on that. I also agreed to tell the CFO that the deal was an okay deal, which it had to be because it was already done. But the commitment going forward was that his functional area and our functional area would work together on transactions like this.
The easiest thing to do at the time would have been to go back and tell the CFO the deal was terrible, and let him pick up the phone, chew the guy out and tell him he had to work with us.
But what would that have gained for anybody? In my view, nothing. It would've put everybody in an antagonistic mode and made working together difficult. My approach was to work with my colleague, demonstrate the fact that we could add value in transactions like this, and win his trust.
He met his commitment and we worked together as business partners on many deals from that point on, to the benefit of everyone.
Partnering and engaging is the key to advancing your goals and those of your organization. Don't take an arrogant approach where people have to come and work with you. Avoid building mandatory, governance-type relationships that position you as a bureaucrat or a roadblock in the process.
Instead, develop collegial relationships. Help people accomplish what they want to and in the time frames in which they want to do it. You'll get a lot more people wanting to engage and partner with you and everyone will get a lot more benefit.
Jack posts on Coupa's blog, which you can find here.