Making Procurement Initiatives Work

This week I was in Charlotte, N.C., attending ProcureCon Indirect, a conference for executives who manage procurement of indirect spend, such as travel and meetings services. It was a great opportunity to meet and network with these folks (About 100 procurement executives came from over 44 companies!) and learn what kinds of challenges they face in reaping system-wide efficiencies and savings from procurement.
I sat on a panel, "Driving Change from the Bottom Up Towards Strategic Indirect Sourcing," along with Brett Mauser, Director Sourcing Strategy & Best Practices for Winn-Dixie Stores, Inc., and Jason Kwan, CPO, VP Global Strategic Sourcing, Manpower, Inc. Judging from the
questions the audience posed to the three of us, I'm certain attendees picked up some great best practices for change management -- what works, what doesn't and the landmines to avoid along the way.

At ProcureCon, I did a lot of thinking about my days at Hewlett-Packard, where as a global category manager for corporate card, hotels and meetings, I worked with HP’s management across the world negotiating travel contracts and creating and implementing worldwide purchasing and supplier strategies. One of the significant best practices I could share was to be aware of the myth of the "M" word, that is, "mandate." A lot of procurement folks get a false sense of security that once they get an executive mandate that directs employees to comply with a new strategic initiative, such as using preferred suppliers only or following a designated process, then everything has fallen into place.  All is and will be golden.

WRONG! In my experience, even with a mandate, people still operate like there is none. Even if you have CEO-, CPO- or CFO-level support for your project or initiative, it doesn’t guarantee that your offices overseas will comply -- and that's due to a lot of reasons. It might be due to laws or regulations in place in a particular country or region. Or, it could come down to a simple case of who's got more authority; a lot of times a country's general manager or highest level executive has more influence over employees there than a C-level
executive back in the U.S. -- home to headquarters.  Bottom line is, you can’t assume everyone will fall in line and comply without any resistance or change management plan in place.

In Germany, for example, nothing can move forward without approval of employee representative bodies called Works Councils, present in nearly all companies larger than 250 employees. So, even if you're armed with the "M" word from headquarters, you're still required to get local-level sponsorship and support.  Bottom line: there’s no magic and immediate panacea for change management -- with or without the "M" word supporting you.  You still have to do targeted communications regularly, as well as engage and enlist support from various countries and regions around the world.

Going beyond the issue of a mandate, remember that every company, based on their own corporate culture, has varying degrees of acceptance when it comes to change management.  The most successful makers of change pro-actively survey the landscape for points of pain, potential pushback areas, managers and others who may offer resistance. Successful change-makers seek critical feedback and information from stakeholders and internal customers, and then they carefully craft project plans, timelines, milestones and deliverables -- along with appropriate communication -- to ensure that all stakeholders on whatever level of authority are aware of both the benefits and progress of the project or change management process.

At the conference, someone asked if it was better to carry

a stick or carrot to drive change.  Actually, the answer is both!  At HP, I always positioned senior management as the stick bearers, while my team and I positioned ourselves as carrot bearers -- actually it was
more donuts, bagels and Starbucks coffee (When meeting with stakeholders, food goes a long way towards establishing a collaborative environment and an atmosphere of trust.).

If more procurement professionals accepted the reality that they also have to be sales people in order to get optimum adoption and maximize change management, the process itself would be less laborious and definitely more successful.

To read about some other procurement best practices, click on this whitepaper link that covers integrating corporate travel, procurement and meetings management strategies.

Kevin Iwamoto is vice president of enterprise strategy at StarCite. This post is syndicated from his blog, Strategic Meetings Management