Shifting Procurement's Mindset to Face the Challenges of 2023 and Beyond
Advice for shifting procurement’s mindset to face current-day challenges head on and how to continue driving change, solving problems, and creating value amidst adversity.
By Hugo Britt | March 2, 2023
Ever since he burst into America’s collective consciousness in the 1930s, Superman has seemed unstoppable. Drawing upon his super strength, lightning speed, and other abilities, there was no challenge that Superman couldn’t overcome.
But there’s one thing that can harm the Man of Steel: kryptonite. The green, crystalline material emits radiation that weakens Superman and robs him of his incredible powers.
Which leads us to the question – what is procurement’s kryptonite? What is the one thing that robs practitioners (or as we like to call them, Sourcing Heroes), of their powers, hamstringing their ability to drive change, solve challenges, and do good?
Shifting procurement's mindset
According to Anthony Clervi, Una’s CEO, and Senior Director Kris Lance, procurement’s greatest weakness lies in our own mindset or misconceptions, and shifting this mindset will give Sourcing Heroes the potential to unleash their superpowers and really make a difference.
Anthony and Kris recently joined Kelly Barner the 100th episode of The Sourcing Hero podcast to discuss what procurement professionals are truly experiencing this year, along with the importance of embracing this positive attitude in the face of constant adversity.
“As soon as you say ‘we can’t do that’, your brain shuts down. But the mind is like a parachute – it only works if it’s open.”
- Anthony Clervi, CEO, Una
A challenging period ahead
As the conversation got underway, Anthony and Kris warned that the current economy presents a mixed bag. Economic weakness in the U.S. is forecasted to intensify and spread, with persistently high inflation and rising interest rates expected to tip the economy into a recession. Real GDP growth is expected to slow to 0.3% in 2023 before climbing to 1.6% in 2024.
Inflation remains high at 6.4% despite dropping from the peak of June 2022, demand is cooling, and unemployment is still low , even considering we’ve seen some high-profile layoffs, including 12,000 roles at Google. The cost of utilities is going up and raw materials may be harder to come by in the months ahead.
But with disruption comes opportunity. “All of a sudden, asset values are going down and interest rates are going up,” says Anthony. “Every business is looking at cashflow.” Procurement can help, but only if they have the mindset required to rise to the challenge.
Embracing a positive mindset
Kris notes that procurement teams often struggle with their internal brand, leading to negative and unhelpful perceptions such as “bean counters” or “penny pinchers” and thinks we need to take some responsibility for this. “Some practitioners may have created their own monster,” he says, “by leaning towards being too averse and becoming decisively indecisive. This ends up in no action being taken, and any wins being negated by inefficiencies and wasted time.”
Worse, this negative perception prevents procurement from being able to excel – or barely even to execute. Warning signs include procurement lacking the ability to sign off on things, implement new programs, and make significant changes. “[If the business] only allows procurement to do the tedious work, it stifles progress and puts the function in a tough spot to excel,” says Kris.
Anthony believes Sourcing Heroes have enormous potential to collaborate and drive positive change. “Numbers don’t lie,” he says. “Procurement can evaluate numbers, contracts, relationships, current and new partners to make a difference. But they need to be welcomed to the conversation proactively, and not after an accident or fire drill takes place. The sooner you get procurement involved in the process, the better the price will be.”
Shifting mindsets at the top
Both Kris and Anthony stress the importance of shifting mindsets at the top. “Invite the leadership team into the procurement world and explain what is going on,” recommends Anthony. “Drop the procurement lingo and adjust your language to cross over that chasm. Show the C-suite the potential for cost savings and our ability to do so much more for the organization.”
Stay relevant. Get familiar with your organization’s enterprise-level priorities and align procurement objectives, targets and KPIs with these goals.
With disruption comes opportunity. Seizing those opportunities depends on your mindset in order to forge ahead.
- Kris Lance, Senior Director, Una
How your GPO partner can help
By design, The Sourcing Hero podcast doesn’t typically promote group purchasing organizations. Shoving the concept in procurement’s face isn’t Una’s end objective. Our goal is to become a trusted partner within the procurement space and we do that by offering various perspectives from practitioners and business leaders alike.
It’s worth noting, however, the similar challenge procurement faces internally (focused on savings and nothing else) and how GPOs are perceived by others in the sourcing space. A GPO’s ability to manage spend and suppliers and create value is often a misunderstood resource, and one that is often overlooked by procurement. These misconceptions can also prevent procurement from living up to its full potential.
When you partner with Una, you’ll quickly realize we’re not like the typical group purchasing organizations out there. By leading with education and value, and the understanding that procurement is not one-size-fits all, we’re lifting up as many Sourcing Heroes as possible while helping them meet and exceed their goals. We do this not only because procurement is cool, but because procurement is completely vital to the business.
For more, check out the audio clip below and listen to the full episode of The Sourcing Hero podcast here.