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Jonathan Webb, head of strategy research at Procurement Leaders, is covering the key events at the Singapore Forum 2014. For more details about the Forum, please click here.
The morning of the Singapore Forum kicked off with fascinating talks on procurement transformation.
Interestingly, both talks described their use of John Kotter’s work on transformation in which he deduced eight steps that characterise successful projects:
Underlining this, the opening keynote, given by Chae-Ung Um, VP of global procurement at LG Electronics, provided a detailed blueprint for implementing transformation. The key watchword was planning.
This was central in converting the purchasing function from an unguided, immature back office, into a centralised, global adviser. In 2009, the function only had a single metric: savings of $200m. Within one year of the creation of a formal procurement function, the team delivered savings of $500m. Former CPO Tom Linton famously described this as “as easy as picking money off the floor”.
The role of recasting talent was also central to this. “We teach people how to influence people,” Chae-Ung Um stated. “The more you influence the more you save. Anything we now touch, we save at the double-digits level.”
In the next presentation, Yannick Feder, group purchasing director at Hyva, reiterated the importance of managing relationships: “It’s very important to win both people’s hearts and mind. If you don’t have that, you can forget your theory; your transformation won’t work.”
In order to enthuse both stakeholders and procurement teams, Feder empowered staff with greater responsibilities in strategic delivery and insight. He created his own motto to describe this: “Don’t give a child a fish, build his desire to fish.” The idea being, once granted the responsibility to act strategically, a buyer is naturally motivated to align with organisational objectives and become more innovate.
In many senses, delivering transformation requires first a plan to deliver energised and engaged teams.