The majority of CPO’s do not believe their team have the skills to deliver!
Now, this is an opinion that really counts. 324 Senior procurement leaders, across 33 countries with a combined total representing US$4.4 trillion? Surely their opinion counts?
But what exactly are we counting here? The recent Deloitte Global CPO Survey (2016) has some startling numbers indeed, and ones where the opinions of those 324 need to be listened to.
Whilst the top 3 strategies for CPO’s are:
- Consolidating spend;
- Increasing level of supplier collaboration; and
- Restructuring existing supplier relationships….
…all great ideas until we see this:
This number was 48% only 2 years ago, so an increase of 14%!
Or should we say a decrease in the perceived ability of teams to deliver. Sad, but true.
So how is it that these opinions have changed? What has driven the decline in perceived capabilities across procurement teams? Some thoughts (and I’d love to hear your experience of why you think this has declined!):
- A 3-year decline in spend on training budgets, now sitting at less than 1% on increasing capability and setting teams up to be successful;
- Strategies not aligned to existing capability OR existing capability not aligned to strategy. Either way, the two aren’t talking so we end up with a misalignment of expectations.
- Clients and CPO’s expecting a certain level of performance, but the expectation is missed time and time again as teams employ existing methods and old remedies;
- The procurement of a decade ago is still alive and well, but doesn’t serve the 3 strategies or the clients, suppliers and stakeholders. Procurement professionals have a skill set that is needed in business, they also need to be seen as true business partners, rather than a team to engage after the fact;
- No true assessment of skills to know (a) where the gaps are (b) what is needed to be focused on first to map back to strategy and (c) Managers and leaders not having clear performance, development and coaching conversations with their teams on how to fix these gaps on the job, in the classroom and by mentors and peers.
When you know where your teams core skills and capabilities are benchmarked, enable them with the most up to date thinking, tools and techniques, then your strategy is within reach. Without it, we continually go back to misaligned expectations and nothing changes. This may be why the SkillsGap Analysis tools offered by Comprara have proven to be so successful.
Now, more than ever, procurement professionals need to elevate their skills and recalibrate how their stakeholders, clients and suppliers see them. Working together differently is essential to the cost savings that companies look for procurement professionals to extract.
Would love to hear your thoughts on how your procurement strategy and your teams’ capabilities are lining up!
The Deloittte Global CPO Survey 2016
Procurement: at a digital tipping point?