Confessions of a Corporate Shopaholic

I was chatting with a few ex-colleagues the other day over their attempt of securing top management buy-in for procurement’s engagement in the above-the-line marketing spend arena, in the last month of 2010.  The idea was noble and worthwhile, but the outcome turned out to be a complete flop.  Not only did the company President say it out loud, in front of all business leaders, that procurement has no place at the strategic marketing sourcing table, he had asked my ex-colleagues to support only from the terms and conditions perspective.  Great, they now have to clean up other people’s mess with no decision-making power whatsoever.  They can now kiss goodbye to any potential savings in the area, and most unfortunately, the whole reputation of the department.  Procurement has now sunken to a new low in that organization, and it is utterly demoralizing for anyone to work in that environment.

So what went wrong?  I probed a bit more into how that meeting was conducted from an attendee, and could summarize into the following few points, just for sharing.

1. Missing Strategy

The procurement presentation team, which included a Senior VP, a VP and a Director clearly knew what they wanted to accomplish by the end of that top management meeting.  They were supposed to showcase the success stories of how they had helped the company in reducing costs, driving quality, improving efficiency, and ensuring compliance.  The President and other heads of business were supposed to recognize the importance of that team, and sign on to a pledge to request the cooperation and support of fellow businesses in engaging procurement from day one.  They would set harsh goals for the department to help the company save even more money, but at the same time ensuring businesses come first.  Procurement needs to be flexible and responsive.  The game plan should now be changed. 

Unfortunately, the procurement presentation team failed to come up with a workable strategy in meeting this achievable goal.  They had not touched base with the affected businesses beforehand.  They had not discussed offline with fellow heads of businesses, even on a causal basis, to gauge the climate of the top management’s circuit and recruit alliances.    They were simply struck by surprise of the President’s reaction, and once the comment was made by the latter, there was simply no turnaround at all.

As I have said repeatedly before, procurement leaders need to treat internal selling as their life-long mission.  They have to keep themselves abreast of the company’s latest priorities and pains.  Sitting behind a desk never gets the work done.  If the leaders have spoken with their comrades before the meeting, they could have changed the strategy entirely.  If I had known that the President isn’t my biggest fan, I would choose to work my way up from below and leverage on my successes with the business leaders and use them to sell for me.  Such top management meeting should then be avoided in the fist place.

2. Poor Homework

I was told that the presentation team was not well prepared in terms of success stories.  Instead of showcasing past results and customer feedback, they played the cop card.  This is always risky.  When you want to be assertive, you better get all your bases covered so that you know there are absolutely no holes to your story, and that nothing can backfire.  Of course, from my tone so far you can guess that didn’t happen with my ex-colleagues.  They illustrated a case where procurement was wrongly bypassed.  The accused was dismissive and immediately called the person in charge as rebuttal.  They then confirmed right on the spot that the procurement VP in fact signed on the authorization form.  Crap.  How can anyone not get the story and facts straight before tabling it up as a “weapon”?  Again, if you are ready to fire, you better make sure your bullet-proof vest is secure and tested.

And how “non-strategic” is it to use the threat tactic?  My threat tactic, on the other hand, is to bring forward how the uncooperative departments will lose out from not getting my expert advice and services, from those who see my value in supporting their business goals.  Level it up, guys.

3. Absence of a Fallback Option

Just because the team was caught by complete surprise, they had never contemplated a plan B.  Instead of re-negotiating the cost savings target, or tabling other measurement metrics now that sourcing is out of the question, the team ended with even more laborious tasks that the team may have trouble shouldering.  At the end of the meeting, the cost savings target remained to be sky-high, sourcing power was stripped, and more headcount would be required in areas where procurement’s efforts cannot be quantified.

If there is a case study where everything went completely wrong, this would be it.  The morale of the story however is that all of it is completely avoidable in the first place.  I am interested in following up further on how the scenario progresses, and shall provide coverage in this space.  Fascinating learning material it is!