To lead the business through change, procurement leaders have to be willing to balance procurement fundamentals with big, bold moves.
In procurement, and business in general, change is inevitable, but it’s rarely comfortable.
In a recent episode of The Sourcing Hero podcast, Kelly Barner spoke with Priya Kumari, a manager at Kearney who specializes in strategic operations, sustainability, and innovation. Priya’s experience in consulting also gives her a broad perspective on the importance of procurement transformation, operating model design, and change management.
Tips for Successfully Navigating Transformation
As Priya explains, the key to successfully navigating any kind of transformation is understanding how different people perceive change. From there, procurement leaders can remove roadblocks for their team and help everyone understand what they’re working towards.
By creating an environment of transparency, structure, and security, team members will “have the appetite to experiment and try new approaches and reach out for help when needed.”
“People perceive change very differently,” she added. “It’s really very important to have a shared definition of what quantifies that change. What are the timelines we are looking at? What’s the order of magnitude and impact that we’re looking at? We all need to start speaking the same language so that I’m not running a marathon versus somebody else running a sprint.”
Bold Moves Paired with Procurement Fundamentals
Making bold moves in procurement doesn’t mean that teams have to reinvent the wheel. They can draw inspiration, insight, and even strategies or tactics from other areas of the business or industries and connect those dots back to their own initiatives. Not only does this save time and resources, but looking outside of your own function or team can spark transformative ideas.
“It’s about looking outwards at what’s happening in the industry, and maybe it’s not even the same industry,” said Priya. “You see companies competing and at the same time collaborating.” For example, consider common recyclable packaging solutions. You can take that same concept or inspiration, she said, then apply that to other industries like pharmaceuticals.
Yet even as procurement teams pursue innovation, they also must maintain focus on procurement fundamentals, which Priya says requires careful consideration of team structures and capabilities.
“It’s almost like a band. You’ve got your lead vocalists and your guitarists and everybody else, but you still need a choir to actually do a seamless performance,” she said. “The energy and inspiration comes from having clearly defined roles for each person within the team.”
Procurement Harmony
Oftentimes, procurement teams struggle to achieve this kind of harmony because they overemphasize some skills and neglect others. This imbalance can be reinforced by traditional procurement metrics that keep procurement’s goals or initiatives siloed from broader business objectives. This kind of disconnect, she says, is a transformation killer.
“A lot of organizations have a very siloed measure of procurement performance. They focus on, ‘did you get the cost down by 10 percent? Did you help me reduce the budgets by 10 percent? Did you cut down 10 percent of my portfolio? Or did you reduce from 100 to 20 suppliers?’ While these measures and KPIs are important, at the same time, they don’t allow the room for procurement to actually transform into an engine that’s helping the business.”
Nail the Fundamentals First
Procurement should also look to foundational areas like risk management, which shouldn’t be a one-time transformation exercise but rather a continuous process that requires sustained investment over time.
“The first step [in change management] is getting the foundations right. It’s like if I’m trying to travel to the end of the world, I want to think about what the weather’s going to be like,” she said. “For procurement, it’s about having your eyes on the ground and really understanding what’s happening in the market, what’s happening to your biggest suppliers.”
One of the more common barriers to building that strong foundation, especially during periods of transformation or change management, is what Priya refers to as the “secret strategy” phenomenon.
“I’ve seen large organizations expecting 10,000 people to deploy a strategy without knowing that strategy,” she said. “The strategy is so secretive and so difficult to explain that probably there are a few individuals sitting at the top who really understand it. But then everybody else is supposed to magically understand it in some ways and execute on it.”
This kind of opaque leadership makes it very difficult for procurement – and the business in general – to implement or sustain successful transformation. But, when they begin to approach it as a process of continuous improvement rather than one big-bang transformation, procurement is much more likely to achieve the outcomes they want.
To lead the business through change, procurement has to be willing to balance sustained effort with big, bold change, while also adapting and growing along the way. In this context, “heroism is about rolling up your sleeves and having a very unconstrained mindset for doing things. It’s about thinking broadly and learning continuously, because it takes a lot of effort to do small things continuously.”
For more on balancing big moves with procurement fundamentals, listen to Priya's full episode here:
