Leadership in a Modern Procurement Department

Leadership is one of the most important yet misunderstood traits C-suite executives need in the 21st Century. For many, creating a vision or showing competency by taking on the bulk of a department’s responsibility seems to be path to effective leadership. However, strong leadership is more complicated than that. Modern leadership requires knowing when to delegate and when to take on an assignment. Perhaps most importantly, great corporate leaders know how to pick their battles. This piece explores these concepts and discusses ways procurement officers can become leaders for their team and the entire company.

Delegating Strategically

The spectrum of procurement’s roles in a company has increased significantly over the past several years. Regardless of whether the size of the procurement department has correspondingly increased, many procurement officers see their specific workload growing. Many are now at a crossroads on how to manage the added responsibilities. Delegating is the natural answer, but if tasks are delegated to the wrong person, then those doing the delegating may find ultimately themselves with less time to manage the same tasks or worse. Complicating things is the reality that senior leadership may prefer that particular tasks not be delegated for sensitivity or other reasons.

How then do you determine when to delegate work? There are a few metrics you can use to help you make those decisions. First, take an analytical look at the performance record of those employees to whom you consider giving additional work. Longevity is relevant, but analytics suggest that relative competency is the stronger approach when delegating. Look at what projects the employees have been given and determine if they meet the following standards: Did they turn the project in on time? If necessary, did they work well with other people on the project? How did their work perform relative to your expectations? What was the concrete benefit of the project? Did they seem engaged in the project? While some of these questions may seem obvious, by taking a look at the aggregate results, you will be able to make a stronger determination on to whom to give a particular project.

Another metric is the scope of the project. Different levels of importance require different analysis. First, consider who is giving you the task. If it is coming from the CFO or another key stakeholder, and the priority is “mission critical,” then it may be wise to take the task directly. This response shows your commitment to addressing their interests. Moreover, if the project is that important, those requesting the work may well prefer your skill set to that of another employee. For example, the company may require procurement officers to be directly involved in negotiations with third party suppliers. On the other hand, the lion’s share of assignments are likely not of the high-stakes sort. When you receive medium-priority tasks, it is inefficient for you to take them on yourself. Moreover, by delegating, you have a great opportunity to vet the strength of your employees for more critical projects in the future.

Many procurement operations make use of teams to concentrate on important tasks. If your department does not make use of teams, a good first step is to create teams with a mind to the key areas and problems you want them to tackle. Some focuses for procurement department teams are finding new suppliers when expanding to a new region, increasing company efficiency, improving relationships with other departments, and exploring innovative changes to procurement. Once the teams are assembled, start sending assignments their direction. At the end of several projects, reevaluate each team. See if moving around team members is a viable option if one project is lagging behind.

Keep an eye out for which members of the team provide leadership to help guide the process.

Keep an eye out for which members of the team provide leadership to help guide the process. These individuals will be an increasingly important link in your chain of effective delegation.

Critical Team Building

As noted above, teamwork is critically important to departmental performance. Thus, a strong leader must be intricately involved in developing the team’s talent, collectively and individually. This section focuses on ways leaders can use a team effectively, including by presenting examples to show your team what and what not to do, becoming a coach, and setting metrics and team objectives.

While each group is unique in terms of its assignment and group dynamics, strong leadership requires you to find similarities among groups and use relevant case studies to demonstrate the positive results of teams working together. The case studies should include incidents where success has resulted, where the results have been mixed, and where the team was unsuccessful. A spectrum of case studies allows each team to understand what may have to change throughout the project if they wish to be successful. And understanding the risks and rewards of working together allows each team to perform better.

Team building can also be applied to improve the procurement department as a whole. The Chief Procurement Officer is responsible for developing and leading the entire group, and part of that role involves serving as the department’s coach. A coach needs to set realistic expectations for each member of the department as well as for the department itself, helping everyone understand his or her role in advancing the interests of the team. Part of being a good coach involves challenging the team and giving them the opportunity to succeed or fail based on their own efforts. It also involves identifying the skills of different members of the team, including leadership potential in particular and helping the team better leverage those skills to achieve the department’s vision.

Before a team starts a project, set clear goals and metrics for the entire team and individuals.

Goals should be ambitious yet concrete.

Goals should be ambitious yet concrete, providing the prospect of a tangible outcome that all members of the team can claim as their own. Being able to claim ownership over part of a project increases the buy in from team members, boosting the likelihood of efficiency and the project’s success. Individual goals and metrics will show that you are actively involved and concerned for the success of each person, thereby increasing the odds of optimal individual performance.

Teamwork is a critical component for an effective procurement operation. Effective collaboration builds confidence among other departments, making it easier for the team to gain independence and control over critical sourcing and other decisions. It also empowers members to engage in innovative thinking and builds important leadership qualities that lay the foundation for long-term department success. In the end, the procurement operation, through your leadership in team building, will achieve more and significantly help the company.

Adept Business Diplomacy

Working strategically with key players in a company is incredibly important for leaders—particularly those of departments like procurement where interaction with other teams is fundamental to the job. This is because executives in other departments can have a material effect on your department’s success. They can serve as your strongest proponents or, conversely, your strongest opponents. This section will provide a few strategies to build relationships with non-procurement leaders to make your own work more effective.

A smart leader understands when to be an advocate for other departments. In determining what efforts of those departments to support, think first about the project or its product and whether there is the potential for a positive impact on procurement. Perhaps most importantly from a pragmatic perspective, gauge whether you think the project will receive a green light from key stakeholders. If success looks likely, consider advocating for the project. You will demonstrate support for other potentially useful allies—even if the support is of little impact. In appreciation for your efforts, the other department may reciprocate when you fight you next battle over one of your own projects.

If a project at issue is coming from your department, convincing outsiders of the importance of it may be vital to success. As such, you may wish to consider several tools to gain the support you need. First, be sure to understand specific needs and preferences of each person you are trying to convince, and leverage those when you make your pitch for the initiative. Preempting concerns can streamline the process for approval and turn opponents into advocates.

Preempting concerns can streamline the process for approval and turn opponents into advocates.

If there is likely to be disagreement, provide clear examples of savings, increased efficiency, or other benefits for the company in the language of your opponents. Of course, remember to be respectful throughout. Even if success results from the effort, residual bad blood from the process could make your job harder in the future.

If the disagreement does not go in your favor, you will inevitably be disappointed. However, defeat provides an opportunity to lay groundwork for success later. By supporting an adverse decision and fighting to help the company succeed despite not getting the most favorable result, you demonstrate a team-player mentality that could support you in the future. In the end, if your colleagues and leadership perceive you as someone who puts the company and the decisions of its leadership first, you may end up on the winning end the next time around.

Conclusion

Leadership is critical in any senior corporate role, yet it is difficult to master. Unfortunately, there is no perfect playbook to guide corporate executives in their efforts to provide leadership to their teams. However, by taking advantage of opportunities to delegate, to build powerful teams, and to leverage positive peer relationships, you will give yourself and your team the highest odds for success.