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Procurement teams today are constantly faced with challenges and opportunities from increased competitiveness, accelerated globalization and the growth of services as a key marketplace differentiator. It has therefore become important for organizations in a variety of industries to reassess their existing strategy and continue to validate its effectiveness based on both the present and anticipated future business environments. This is achieved by procurement transformation, a process that produces long term benefits to the organization.

The Need for Transformation

Procurement transformation is a holistic approach to improving all aspects of procurement in an organization, for purposes of achieving long-term sustainability. Continual procurement strategy planning and the resulting transformation initiatives contribute to billions in annual cost savings for businesses, while delivering leading products and services to the world. Such a procurement strategy supports the continuing desire of a business to remain competitive, drive productivity, cost reduction, as well as guarantee supply quality, security and continuity for customers.

The core element for any successful procurement strategy derives its value from its people, processes and technologies. These contribute in securing products and services in support of internal partners and external clients, thereby developing and delivering quality products and offerings. The benefits that result from this type of activity include:

Increased profit from the best type of commodity, labor and delivery cost reductions
Improved client and internal partner satisfaction based on improvements in supply quality, continuity and the value of products and services received
Optimized cash flow

Developing Your Strategy

Businesses need to operate under a continuous planning cycle to refine their procurement transformation strategy. This entails incorporating the following key elements for strategy development, which are applicable to all organizations:

Strategic Marketplace Drivers – Customer, supplier and competitive landscapes
Corporate Strategic Intent – This includes driving profits and growth consistent with the principles and strategic imperatives of the business
Procurement Business Design – Increasing procurement leverage, year on year productivity improvements, and facilitating strategic growth and value
Innovation – Incorporation of technological advances or process design that emanates from suppliers, laboratories and research teams

By following this model, a business is able to internally develop a set of strategic actions for addressing these challenges and take full advantage of opportunities in the fast paced marketplace. Key to this strategy is the alignment of the highlighted strategic actions into various imperatives that represent the nucleus of the procurement transformation strategic plan, which is applicable to most procurement organizations.

It can be difficult to motivate our teams when we are all so busy throughout the day. You may be thinking how can I motivate my employees in order to exceed expectations? What is the key to motivation? There are four areas that can dramatically affect your employee’s motivation to improve their production on the job.

1. Relevant Feedback – While this may seem like a no-brainer, many employees are not clear on what the expectations are for their position. Do your team members know exactly what is expected of them on a daily basis, and are they given feedback that is relevant directly to their job performance?

2. Specific Metrics – How are your team members able to gauge their own progress on how they are doing when they were never given any metrics for their position? If an employee is given a new task without proper metrics they will quickly become frustrated and will not perform up to their abilities or your projections. When metrics are established and are explained thoroughly your team will be able to feel that sense of accomplishment for taking on a new task and will no doubt rise to the occasion enjoying the range of responsibilities.

3. Ownership – In order for employees to feel empowered and to really excel in their positions they need to be able to maintain a sense of ownership/autonomy over their work. When you make them responsible for both the negative and positive outcomes that result from ownership you will find that they have a higher level of ‘buy in’ of the company’s goals and values. They will feel as though they are directly responsible for the success or failure of the business.

4. Frequent Feedback – Along with providing your team with relevant feedback you also must be sure your feedback is timely. Employees should know right away if an action that was taken is incorrect and should be educated on how to proceed in the future. If you wait days or weeks, the information is no longer fresh in their minds and the value has been lost. I hear all too often how some never hear from their bosses except when it is something negative. This is something that has to change immediately if you wish to motivate your team and increase their production. Providing positive feedback on a job well done goes a long way whether you realize it or not. Keep in mind that it has to be genuine and that you are not just saying ‘good job’ just to fill in a quota for the day.

It sounds like something that would be contrary to building a successful sales practice. But in reality helping a non-serious buyer to say no sooner might be the best thing you can do for several reasons, none of which are negative for business.

First it’s important to ask leading questions to find out if a prospect really wants, needs, and can afford your product.

Often a preliminary phone conversation can help you determine if a client is a serious prospect or just a tire kicker.

All of us have driven eagerly across town to meet for coffee with a “hot lead” only to have your brain picked, and put together a quote for someone who is not a serious buyer. Many prospects would rather meet you for coffee than say “no” up front.

If during your initial discussions you find out the client is motivated to buy, give them an out. While it’s easy for prospects to say “I don’t have any money,” often that is just a cop-out for the true reason.

Most people will find the money for things they really want.

The fact is people really struggle with the idea of saying “no” even when they are flat out not interested. For instance they:

May feel there is not a true need for the product
Are not certain it will solve their problem
Truly do not have the funds to purchase it at this time

When a prospect decides it’s a “no”, a dance begins between the sales person who is trying to read between the lines and the well-intended prospect who thinks it’s somehow kinder to avoid saying they are simply not interested.

Typically prospects who are not interested convince themselves that making up excuses in order to spare a salesperson’s feelings is better than saying, “No Thanks, I am not interested.”

Truth be told prospects are usually trying to protect themselves.

They feel so uncomfortable… they don’t think about the negative impact of time wasted following up on sales that won’t happen.

Next time you get the feeling a prospect is struggling, test the water by giving them an out. It’s more than a standard take-a-way, “This is not for everyone”. Getting to “no” sooner saves you time, effort, and the need for unwelcome follow-up.

Honestly let them off the hook by reminding them it’s a business decision and you won’t take it personally, sets the stage for long-term relationships and great referral sources. They will remember feeling good while being engaged in a conversation with you and feel good about approaching you when they do need to make a purchase.

Telling someone it’s OK to say “No” and giving them permission not to buy builds trust, invoking a favorable emotional bond between the two of you. Helping someone to preserve their dignity and feel like they didn’t hurt your feelings makes for a happier ending both of you can live with.

Be bold and address the pink elephant in the room by saying, “I don’t ever want to be someone you feel the need to avoid” and you may be surprised with the response you get.