As we approach year-end and wrap up planning for 2015, it's a great time to step back and take stock of what our Procurement Team has accomplished, what we want to accomplish in the next 12 - 18 months, and how we are positioned to accomplish those goals. The few weeks at the very end of the year is frequently a slower period of time, and may afford us the time to ask (and answer), several important questions that we rarely have time to think about:
Who are the three strongest members of my team (and why), and who are the three weakest?
A tough question to be sure, but an honest answer will go a long ways toward helping move the organization forward next year. One of the things I used to hear is that there are three types of people in the business: Those who make things happen, Those who watch things happen, and those who “wonder what happened”. We can ill afford to have the third group on our team for long - we have to find a way to pair them up with the first group, and make them productive for their stakeholders and the organization. This is the time for the tough discussions about why projects were not successful, or why a team member always seems to have trouble aligning stakeholders. Don't put off the initial talk - sometimes communication is the key to resolution! And, on a positive note - what can those strong performers do to mentor those that need the assistance? This can be part of their development plan, and the sooner you get them started - the better off your organization will be.
What's my plan to develop my team in 2015?
You probably have left some training dollars in the budget, but as leaders we have to think more broadly. Developing our staff is about Leadership, Management, Specific Skills, and Required Training. This is a great time to sit down with the leadership team and actually PLAN where your key folks (see notes on strengths and weaknesses above) are going to be developed. Who is going to speak at a SIG Conference or other event as part of their personal development? Who is going to develop the internal stakeholder materials and communicate to senior management within your firm? These are all development opportunities, and if you don't discuss them now with your leadership team - they will be deferred in the heat of “making the numbers” in 2015!
What do the numbers tell us - how do we compare, not just to the prior year, but to other organizations and to where we want to be?
We all measure performance, but I am always surprised at the lack of discipline beyond “cost savings” and sometimes by the lack of specificity on even basic measures such as this. Take some time to think about, and articulate, how the Procurement team adds value beyond cost savings. The best Procurement leaders are passionate advocates for their team and value creation - and you need to take the time to be familiar with the performance of your team and how the numbers support your business case. This is the time to assemble your performance dossier or scorecard - and communicate it to the organization. A lot of folks see it as “tooting their own horn”, but I prefer to position it as advocating for my team. Study after study has shown - what gets measured, gets done. And, I continue to be astounded at the number of procurement organizations with no formal measurement (or communication) of their value contribution. Comparing your organization to external benchmarks is a way to determine where you may need to focus energy in 2015 - but remember that you have to ensure apples-to-apples comparisons to be meaningful.
What projects were most successful (and why) - and which were least successful?
What made individual projects successful, was it the procurement team leader, an engaged stakeholder, a supplier that “came to the party”, a great technology, support from a third party consultant, or some other specific attribute. Be specific about how you define and measure success (in any project), and what exactly what combination of elements came together to ensure the result. Cost savings, in and of itself, is not the sole measure of success. Many IT Departments and Sourcing Teams touted their cost savings as evidence of “success”, while the supplier markets were experiencing cost deflation that should have ensured success. At the same time, they were underinvesting in core technologies and necessary refreshes that would allow competitiveness for years to come. In early 2015 we will continue to see oil prices decrease, and our teams should be readjusting cost savings expectations across the energy and fossil fuel raw material spectrums to recognize this. What are we doing to ensure that the next run-up in costs will not create issues for our teams - in either supply availability or cost? By the same token, what projects did not work well - and why were they delayed, or failed to meet their target. I have seen sourcing projects lag from 18 - 32 months for no reason beyond an inability to bring together disparate stakeholders. This is the time of year for you and your team to brainstorm on how to break those roadblocks!
Where can we add value that we don't today?
Are there categories of goods or services where we can help the business/function to implement improved supplier strategies, reduce risk, minimize transactions costs or leverage spend? What is our plan for expanding Procurement's influence to all Third-party supplier relationships? Are there geographies or business units that we can assist - by influencing their spend without necessarily being center controlled? How do we communicate good buying habits and extend our influence to every transaction? How seriously do we take our role in bringing business and market intelligence to the organization? Are there opportunities to use our suppliers to educate our stakeholders about what is available in the marketplace?
Can we move further forward in the Planning Process?
The end of the year is a great time for Procurement to look at opportunities to get more involved in the business and attend staff meetings, strategic planning sessions and quarterly review sessions. Often we get left out of these, or our participation is inconsistent across commodities or categories. This is a great time to push our entire team with the goal of getting added to one additional planning session each quarter. And, that extends to each of us - we have to pick up the phone and ask to present our year-end numbers (see above) and priorities for 2015 at as many January Staff Meetings as possible. Here is our chance to advocate for ourselves!
Naughty or Nice...
And, of course, as leaders, we actually do need to put everything together and consider who has been naughty or nice. Who do we need to reward in some manner, and who needs to have a career (difficult) discussion about their shortfalls? These are both necessary - keeping in mind that we have a lot of different levers that we can pull in both instances. However - if we don't stop in December, and MAKE IT HAPPEN, we will be surprised when the best people leave, and the weaker performers don't change their behavior!
Here's hoping that each of you have a great Holiday Season and more nice conversations that naughty ones!