Greg sat down with ScoutRFP. In part 2 of the conversation, Greg unpacks three ways companies can work to change sourcing behaviours – and gain street cred in the process.
Smart Procurement World topic highlight: How cross-functional collaboration in the strategic sourcing process can deliver savings beyond expectation, even in a very mature category. Presented by Mike Machell-Cox, Director Indirect Procurement, Sappi Europe.
Q: You’ve transformed sourcing processes at organisations across a wide range of cultures. What are some of the different strategies you’ve employed to manage that transformation?
Command and control
There is a corporate adage – the concept of ‘tell or sell’ helps define a company’s culture. A large Fortune 100 database-technology company, located on the San Francisco Peninsula, operated with a ‘command and control’ culture. You would pitch your plan to the CFO and discuss if it had business merit. If the plan was accepted, the senior leader would send a message to the company that the change was occurring. If you didn’t conform, there was the door. Buy-in wasn’t sought, but demanded when engaging with the business.
While expedient, it didn’t always lend itself to the best outcomes.
The sourcing salesperson
Up Highway 101 towards the Bay Bridge, a San Francisco pre-eminent cloud-based company was experiencing hyper-growth year on year. That explosive growth demands agility and open, transparent conversation – collaboration with urgency. Teams were bandwidth constrained in delivering on customer expectations. Change management in this environment is the opposite of dictatorship. It requires selling of ideas and an understanding of the benefits they, as well as the company, receive from accepting change.
At the cloud company, our team took a different approach in reaching out to the business to see how we could empower them from a speed-of-execution standpoint. The goal was to divide their role into two branches, freeing them up to deliver by diverting some of their operational responsibilities to my team. We found that agility required clarity of purpose around roles and responsibilities. To that end we created a RACI diagram. The objective was to identify who’s on point, who gets approval, who’s consulted, who’s informed, etc. You need to make sure even in a collaborative environment that there is some degree of structure.
The hybrid (aka: what gets measured gets done)
Further north, in Sacramento California, I leveraged an entirely different change management approach that was a hybrid of the two.
I sold executive leadership on a concept – the reasons for the change – and then partnered with Marketing and HR to develop a change management strategy. Our plan was to demonstrate value by up-skilling our people, enhancing our process, and lastly, looking to process and policy changes.
We developed our team’s brand promise, our street cred, and drove change behaviour using a drip campaign developed by Marketing. The campaign helped to define our brand and in doing so had some fun with the initiative. We operated this way for approximately two years before thinking of taking a measured policy approach.
We purposefully implemented a purchasing policy, procurement policy and sourcing policy with no accountabilities. Instead, we encouraged people to collaborate and play the right way using metrics. I subscribe to the philosophy of “what gets measured gets done,” so we drove awareness through numbers, then next year we’ll talk about accountability.
It’s all about finding a cadence that works with the pace of change at your company.
Mike Machell-Cox, Director Indirect Procurement, Sappi Europe, will be discussing how cross-functional collaboration in the strategic sourcing process can deliver savings beyond expectation, even in a very mature category, at Smart Procurement World Indaba later this month.