The secret of success for any Chief Procurement Officers? Consistently adding value and staying relevant. That means continually improving your knowledge and skills, lest opportunities (promotions, pay rises, job offers, or simply chances to be a better procurement professional) pass you by. Yet this is often easier said than done.
Sometimes it feels more important to simply concentrate on the minutiae and the day-to-day of procurement—hit the quarterly targets and budgets, review purchases for compliance, and write those RFPs. Never mind reading up on innovative new ways to manage tail spend, or reviewing the latest procurement portal, you might be thinking, it’s more important to hit the deadlines. Value add work can be done another day. Or never. But becoming entrenched in your team’s version of technology and best practice means losing sight of where the industry is going—and ultimately being left behind.
Former Intel CEO Andy Grove used to say only the paranoid survive—and there’s something to be said for that line of thinking. It’s always important to keep up to speed about new developments in your field. And if, like me, your business is procurement, then there are countless opportunities for you to become an expert in a brand new way of thinking; there’s something new every day. .
But it can be hard to take the first steps; the sheer scale of where to start can lead to intimidation, if not outright choice paralysis. Where do you find the most up-to-date information? How do you know what’s current? How do you become part of the conversation?
One trick I learned early on in my career was to take cold calls from tech salespeople, and meet with sales reps as often as I could. This might sound strange and a surefire way to eat into your valuable time—but hear me out!
Technology sales reps—especially from entrepreneurial startups—are a valuable source of information. They generally have new and interesting ideas about how to solve a particularly perplexing business need—diversifying your supplier base, clamping down on maverick spend, centralizing procurement data. If there is a problem facing Procurement, you can be sure one of these entrepreneurial companies is working on a solution, and I have always found the cold call meeting a great way to stay current on technology advancements, trends and best practices.
Some people may not think this same way. They see cold calls as more of a time suck than productive meetings. Don’t get me wrong, I’m not suggesting you suddenly say yes to every cold call request you get. But I would encourage you to take one or two more—especially if they’re in areas that could help your procurement team add value to your organization.
To make the most of your time, you need to be transparent with the rep and manage their expectations. Don’t pretend you’re going to buy something if you’re not. Simply explain that you’re interested, not yet ready to buy, but keen to learn more. And don’t just sit there and listen to the sales pitch—interject, engage, and lead the conversation. You’ll be surprised what you will learn about your own industry, your team and best practice procurement. And you’ll see firsthand what staying curious can do to your own career.
As a CPO, I was even able to turn my penchant for taking cold calls into a number of advisory roles—for companies like Amazon Business, Aravo Solutions, Coupa, CXO Nexus, Oracle, Scout/Workday and Zip. No matter what trends emerged in the industry, I worked hard to never fall behind or be left out of the loop. One such cold call led to my introduction to Fairmarkit’s founders, Kevin Frechette and Tarek Alaruri. From that first pitch, Fairmarkit seemed interesting to me because of how they were deploying their technology—embedded within the purchase query by using natural language processing and automation. It just seemed a really smart and easy way to solve so many procurement problems.
TK months/years later, I saw an average of 11% savings return on spend under management, increased policy compliance, dramatically improved supplier diversity results. All because of that first, 15 minute cold-call.
Fairmarkit is disrupting the procurement space by helping teams scale without having to invest incremental human capital. They are creating a new dimension in procurement—managing the tail and curbing tail spend.
Now is the time to be a proactive CPO. The health ovf the procurement department has been proven to have a strong correlation with the corporate performance of an organization. According to McKinsey, stronger procurement leaders are able to find their company more savings, reductions in the cost of goods sold, and a higher average EBITA. What McKinsey calls “Procurement Followers,” on the other hand, are not adding anywhere near the value-add to their organizations as are the leaders in the field.
McKinsey warns that when procurement professionals do not devote enough time and resources to adding value, and instead concentrate on short term, operational issues, they do not play a leading role in their organization—in fact, they are undervalued.
For CPOs to shine, they need to think long term, be forward-thinking innovators.
For me, taking cold calls was in hindsight a key factor enabling me to transition from practitioner to industry more gracefully. I found the opportunity to join Fairmarkit both interesting and compelling as we are disrupting the procurement space with our value proposition. That was my path—what will yours be?
Whatever it is you can do to shake yourself out of a do-nothing attitude, or even to take yourself to the next level, do it now. Be open to being a better CPO. Be open to the art of the possible. In the end, you won’t be disappointed.