Has Procurement Become the Victim of its Own Success?

Written by EO Executives on Mar 21, 2018


In many ways procurement has become a victim of its own success.

In the dark days that followed the global economic collapse in 2007-2008, business leaders consistently looked to procurement to help achieve the savings and efficiency that would not only improve the bottom line but, in many cases, also secure the company's future.

So, successful has procurement been in the past decade that the functions’ standing has risen to previously unthinkable heights. From being a back-office, order processing backwater, it has now become one of the most vibrant and critical organisations within a business.

Procurement and Supply Chain is now, arguably, vying with Finance, Marketing and HR as one of the most attractive areas to forge a career in, thanks in part to the fact that pay-rises in the function commonly outstrip those on offer in other business functions.

With graduate numbers struggling to keep pace, though, there is a common consensus that the war for procurement talent is being more keenly fought than ever.

And that shines a huge spotlight on the Chief Procurement Officers (CPO's) at the top, whose job it is to manage and retain that talent.

This quote from John Glen, Charted Institute of Procurement & Supply (CIPS) economist and senior lecturer in economics at Cranfield School of Management, provides one of the most accurate summations of both the fluidity of the procurement jobs' market and the role of the modern-day CPO. 

“Having attracted the best talent you can get, you have to think about how you manage that talent,” he says. 

“You have to retain the talent you have got by managing it effectively. People leave managers, they don’t leave organisations. Financial remuneration is important but you also have people coming into the profession who want challenging jobs. We have to think about how we manage the talent available to us.”

It’s his assertion that ‘People leave managers, they don’t leave organisations’, that strikes the strongest chord and serves to emphasise the critical role that top procurement executives – be they interim or permanent – play in firstly building a procurement team and then maximising its potential.

It is a fine line between bringing in the people who can transform your procurement organisation and then ensuring that the team remains sufficiently stable to achieve ambitious targets. Again, that comes from the top and the need for the CPO to outline a long-term plan that simultaneously inspires loyalty and fires the imagination of team members who feel truly involved in the process.  

“Stability underpins the whole drive of transformation,” says one leading CPO. “If you have people who are recognised within the business and want to stay within the business, then it’s a huge benefit. You can’t have people looking over their shoulders thinking ‘this is only going to last a few months’, you have to have that long-term view and a belief that what you’re doing and achieving is going to be sustainable.”

That is even more true at a time when head-counts are still coming under scrutiny. Doing more with less is a mantra that has been repeated ad nauseam since late 2007, but it is still one that resonates and one that means the modern procurement leader has to use every lever possible to get the absolute best out of every individual on their team.

In that sense, there are probably more parallels than ever between the sporting world and the business one, which explains why the likes of Sir Alex Ferguson are as in demand in business conferences across the world as changing rooms.  

The main difference being that senior leaders have to wait more than 90 minutes to see the fruits of their labour deliver results. 

What are your thoughts? Has Procurement become the victim of its own success? Be sure to leave your comments below. 

You may also like:

3 Ways Procurement Teams Should Navigate Risk

- What Makes a Great Procurement Team?

- How to Unite a Dysfunctional Procurement Team


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