Want More Influence? Ask the Right Questions!

In a recent post over on Commitment Matters on getting to the top table, Tim penned a great post on where a CPO should be placed on the organizational chart, and why. Nine paragraphs in, after discussing the standard view of Procurement as a cost centre (which never gets direct reporting status to the CEO), the department that’s only visited when something goes wrong, and a barrier to getting things done, Tim made a great point. A CPO is only going to get a seat at the top table if it makes a significant contribution that visibly improve organizational performances.

This is only going to happen if Procurement shifts its emphasis from cutting costs to adding value. This requires Procurement professionals to change the types of questions they ask, the data they collect, the conversations they have inside and outside the department, [and] the areas in which they invest in skills. When Procurement approaches Engineering, it can’t be about “how can we help you cut cost” because, in Engineering’s mind, that translates into “how can we help you cut quality and increase risk of failure”. It has to be about “how can we help you source the highest quality products and services within your budget”. Similarly, when Procurement approaches Manufacturing, the focus has to be on “how can we help you ensure supply at the highest levels of service”? If a production line shuts down, that could cost a lot more than paying an extra 2% on the raw material costs. This isn’t to say that cost shouldn’t be a factor, as value can monetarily be defined as profit contribution – total costs of operation, but that cost can only be one, small, component. Once Procurement is trusted, then the questions can shift to “how can we help you get the level of quality and service you’re currently getting at a better price, so you can show a year-over-year cost savings and look like organizational heroes”.

I’d strongly encourage you to read Tim’s post on getting to the top table. It’s a great thought-piece.

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