Insights from Roche: People-driven change & procurement operating models fit for a new world

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Roche member exchange

Some things resonate more than others when groups of people who share common challenges come together, and so it was at the latest Procurement Leaders Member Exchange at the home of pharmaceutical giant Roche in Basel.

 

With an agenda focused on people-driven transformation, the quest for more effective business partnering and procurement operating models fit for the future, it wasn’t long before some common themes started to float to the surface. And while it’s impossible to summarise such a rich and varied discussion taking place over the course of a full day, here’s three thoughts that I took away from the session.

 

First: procurement must have an absolute focus on understanding the business need and scientifically match this to supplier capability. As a result, we can really begin to bring value and step up our role in the externalisation of business-critical services.

 

Roche has segmented how it can deliver business value into six broad areas – quality & availability, speed, buying experience, risk & sustainability, innovation and productivity & growth. By going on to deploy a ‘persona-based value contribution approach’ and ‘proactive business partnering’, where it takes a different approach to communicating procurement’s value proposition based on the “unique strengths and priorities of stakeholders”, it is able to clearly identify what procurement can deliver to individual business stakeholders.

 

The reality is that savings aren’t always what the business demands and by being laser focused on what it does want, procurement can become far more integral to the business. As head of strategy & transformation Patrick Foelck explained, he is looking for a commitment, almost a contract, between procurement and the business in terms of what they want, before he and the team even start to think about delivering against it.

 

A good example is with a CFO of R&D, who is unlikely to get excited by the pursuit of savings. Talk about speed to clinical trial, flexibility and quality or reallocating budget to allow for 11 trials rather than 10, however, and they will bite your hand off to get involved with procurement.

 

Second: agile working methods cropped up again and again, partly on the back of Roche sharing how it had established a dedicated team, complete with a significant number of scrum masters, to drive major cross-category initiatives at pace.

 

But also because many others who attended were exploring similar approaches. Indeed, UCB, one of those present at the event, has gone further still, removing whole reams of traditional procurement in pursuit of a more flexible, agile team.

 

This provided for a rich seam of discussion around whether category management was still fit for purpose, a debate I find extremely energising – after all, categories of spend are procurement-created and don’t always resonate with the business. While we didn’t arrive at a full and final conclusion around what the future holds for category management, it’s fair to say that it will evolve significantly from where it is today.

 

One suggestion was that procurement should focus on a small number of ‘super-categories’ only (raw materials or those with huge strategic relevance, for example) leaving the remaining spend to be managed through more of a business-development lens. Watch this space, as this debate has a way to run.

 

Third: people-driven change sounds suspiciously like jargon but is key to Roche realising its ambitions around operating-model transformation. With the procurement leadership team having set a 2023 strategic vision, they are leaving it to the wider team to develop the right approach.

 

This, they are doing through a clearly-defined initiative with ‘ideation’, ‘incubation’ and ‘scaling’ stages and using hackathons and other collaborative sessions with the wider team to help embed new approaches and build an operating model.

 

The reasoning here is that change is easier to implement when it takes root and grows from the bottom up, rather than being mandated from the top down – teams are far more likely to support change if they had a role in creating the vision and approach themselves.

 

With around 30 of us in attendance at Roche, exploring where the function is heading and what we need to do now to get there, it made for a inspiring few hours of content and conversation.

 

And I’ll leave you with one final takeaway which in many ways forms the pure core of what we mean by proactive business partnering.

 

“We need to walk around this place and sell our stuff – we need to get them into the engine and start creating value.”

 

Quite.

 

Visit Procurement Leaders for more information on how to get involved in the community and learn from a peer network of thousands of procurement executives globally.

David Rae
Posted by David Rae

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