Many procurement organisations are feeling the pressure to increase speed to market. Coupled with this is a rising expectation to produce more product innovation. Organisations, such as Syngenta, a leading global agriculture company, are turning to agile methods to increase the impact of its local procurement teams. This is leading to new operating models, but also a greater reliance on its employees and leaders to navigate the transformation.
Asia is a region of growing economic potential, and increasingly home to some of the world’s leading-edge procurement innovations. With 28,000 people located across 90 countries, Syngenta, is adapting its own agile approach in the region. The company’s ambition is to be the most collaborative and trusted team in agriculture, providing seeds and crop protection innovations to enhance the prosperity of farmers, wherever they are. Over the years, its scientists have continuously been introducing new products to the market, providing new technology and solutions to aid farmers and contribute towards global food security for a growing population.
Syngenta is committed to helping farmers adopt sustainable agricultural practices and technology to mitigate and adapt to climate change, becoming more resilient to extreme weather events and other effects of global warming. Syngenta’s Good Growth Plan outlines a holistic approach, including better input technologies, soil management and improved efficiency. All of this is desiged to enable farmers to provide enough safe and nutritious food for a growing population while also taking care of the planet.
Asia, in many respects, is an ideal home for business innovation. In the context of Syngenta, the imperative to innovate stems from the requirements of its regional customer-base to grow at scale, respond quickly to opportunities and have the ability to develop solutions of high local relevance. Unlike other regions, the predominant profile of a farmer is one of a small-holder with under two hectares of land. It is these small farmers in particular, who are vulnerable to extreme weather and market changes, but because of the size of their businesses, are at the same time exceptionally adaptable to new technologies and new initiatives.
It is against this background that Syngenta decided to pilot a new agile operating model in the region. The APAC procurement teams were the first in the global procurement function to gather experience with applying this approach.
Thomas Mascali, head of indirect procurement APAC and China, led the transformation journey for his regional team. A challenging, but rewarding experience as he concludes, “it was our objective to enable faster decision making in all countries across the region and to improve our responsiveness to the business. Building the indirect procurement team’s ability to operate in this way was critical in order to best support a fast-moving business.”
Syngenta strives to continually deliver new ideas, new insights and to lead disruptions in the marketplace. This means procurement must have the ability to meet an increasingly complex suite of challenges and develop suitable solutions quickly. "There is simply no time and value in complicated decision-making bodies or processes," notes Mascali. This, he says, includes "multi-level sign off for every single decision in a country".
Syngenta’s APAC procurement team consists of a strategic team based in Singapore and procurement business partners supporting the local business across a range of different countries. Previously, many decisions were escalated up the hierarchy. This slowed responsiveness and frustrated customer delivery.
Mascali decided to kick off the implementation of the new model with a “voice of the customer” survey.
He interviewed over 50 internal stakeholders to gauge their view of indirect procurement across the region. This survey revealed that while procurement delivered on its promises in many aspects, the function was seen as enforcing processes that were perceived to be complicated.
“Stakeholders were looking for speed, responsiveness and easier ways of working. We needed to help improve our speed to market,” Mascali summarises. That became the vision fuelling the function’s journey towards a more agile model.
Next, the key sourcing processes were reviewed and streamlined, allowing procurement to synchronise pace with the rest of the business.
Agile models are intended to speed up decision-making processes, advance flexibility and increase local responsiveness to the business and customers. A key enabler was to push more decisions to the frontline – to empower individuals within the local procurement team to be increasingly responsible for making their own decisions at a country level. A significant part of this transition, therefore, is to trust the teams to take on responsibilities.
“By enabling local procurement business partners to take ownership of a range of decisions, we removed the need for endless multi-level communications and unnecessary approval steps. Instead, we provided local country teams with the ability to provide an immediate answer to an internal query,” Mascali says.
One of Mascali’s early initiatives was to increase the approval limits of procurement business partners, enabling them to make faster decisions on more significant amounts of spend. This also meant that they became accountable for the decisions and solutions they were delivering to their stakeholders.
Developing these new procurement processes brought another agile principle to life: learning by doing.
“Initiatives that are still at a development stage are quickly trialled and tested with our customers. Within a short timeframe, several rounds of feedback and alignment can be sought and the process adjusted,” Mascali notes.
“Only when delivery and speed is recognised by the internal customer, the practice is shared throughout the team.”
This is a big change compared to the previous way of operating where the organisation would spend significant time and effort developing a perfect initiative upfront, but could only tell if it worked after implementation.
A change in management style and mind-set was supported by a clear mandate from the leadership team.
“Challenging the status quo was a critical success factor to drive the change,” says Mascali.
To be effective with agile methods, leaders need to adopt a more creative, mentoring style. This means empowering the people and systems around you to find the right solution that fits the local situation.
These requirements effectively recast the role of the leader. Mascali saw his position as casting a guiding light for newly empowered professional experts to make their own judgements to deliver upon the vision and the targets, rather than execute, control or decide on everything.
“Agility for me is about speed and flexibility, but unless you have a North Star you can also have a ‘pretty mess’,” Mascali says. “As my role as a leader evolved to focus more on supporting, developing and guiding my teams, I was also expected to provide a clear direction and strong values.”
Mascali looked to create a culture that more readily embraced innovation. Part of this was to build an environment where teams have the ability to accept failure – and then move quickly to adjust and try again.
“Instead of protecting themselves from the possible negative consequences of failure, I encourage our teams to be much more concerned on how we drive innovation,” Mascali says. “For that to happen, I needed to create an environment that enables and empowers people to try new things and accept that they will fail.”
“To be honest, I was not 100% convinced when we started the process and I did not see the value it could bring. However, I decided to keep an open mind as being agile does not start with tools and process - it really starts with the mind-set of your leaders,” he explains.
Ultimately, this mind-set shift, alongside greater individual responsibilities, may seem risky or troublesome for some, but Mascali already sees a positive return on investment and believes that people are "really growing under the new model".
Three tips for deploying an agile procurement methodology: