September 2024
Procurement exceptionalism
September 09, 2024 Filed in: Procurement
Procurement exceptionalism; how to lose friends and alienate stakeholders
Procurement exceptionalism is the belief that belief that people who work in procurement are exceptional in some way. Procurement practitioners are claimed to have characteristics or capabilities which are unusual or extraordinary which makes them different from other stakeholders. The term carries the implication that procurement people are superior in some way, usually in terms of commercial processes. The archetypal procurement villain José Ignacio López de Arriortúa famously required his team to wear their watches on the right wrist in order to emphasise that they were special and ‘different’ from their GM colleagues.
"Procurement; the master key to unlocking business potential"
I searched on LinkedIn for posts containing the word 'procurement' and came up with this statement. While we can forgive an influencer for a degree of puffery, I wonder how stakeholders in other functions might react to the news that their organisation's business potential can be optimised by adding the magic ingredient "procurement"? We may be able to ask them when they eventually stop laughing.
I have profiled the capability of procurement practitioners in organisations large and small, public and private, from Melbourne to Manchester and from Miami to Manila. I can say that there are some talented people in procurement and many people -including me- who have development needs. Procurement people are not -on average more capable than other knowledge workers.
Department, process or function?
Let's examine another phrase, also sourced from LinkedIn;
"In this article I reflect on the critical role procurement plays in driving business growth, managing supplier relationships, and shaping strategic decisions."
Let's give the author credit for the use of powerful verbs like 'driving', 'managing' and 'shaping'. Bonus points for getting both 'critical' and 'strategic' into the same sentence. But what does the sentence mean? In particular, what is meant by the word 'procurement'? The author does not feel the need to expand on what is meant, but in this context, it could mean one of three things. Let's examine them one at a time.
The first is procurement as a department. I suspect that this meaning is what the author intended, but let's state the obvious. An organisation can have class-leading procurement processes and class-leading procurement outcomes without having a procurement department. In everyday use if somebody uses the word 'procurement' we can assume that what they actually mean is the procurement department.
So is it reasonable to infer that the procurement department is "critical" to business growth? This will be news to most business development executives. I have worked with companies where new product development is a critical business process, and design, procurement, manufacturing and suppliers are united in achieving target costs. I have never worked with an organisation that would claim that the procurement department is the only enabler of business growth and I have worked with some stakeholders who would see no role for the procurement department in business growth. And don't get me started on 'shaping strategic decisions'!
The procurement process is a foreign land
The second option is that the author used the word 'procurement' to mean the procurement process. At the risk of being repetitive, can I point out that the procurement process is present in all organisations whether or not they have a procurement department. The organisation may procure well or badly. Stuff gets bought and delivered. Negotiations take place. Relationships are managed, with or without a procurement department.
The end-to-end procurement process involves stakeholders working in different functions, fulfilling different roles. This means that that the use of the word 'procurement' to mean the procurement process does not rely upon the assumption that people who work in the procurement department are more capable than other stakeholders. It is more inclusive and less conceited.
It is common to encounter stakeholders of the procurement process for whom the procurement process is a foreign land. They need guidebooks, translators and navigational aids to find their way from where they are to where they want to get to. For these stakeholders, the idea that the procurement process drives business growth or shapes strategic decisions would be greeted with derision.
The procurement department ≠ procurement
The third option is that the author used the word 'procurement' to mean the procurement function. This is a more abstract concept and the procurement function includes procurement governance, procurement organisation, the capability of full and part-time procurement practitioners, the quality of procurement processes and systems as well as other enabling resources that contribute to an organisation fulfilling its needs for external resources.
By decoupling the scope of the word 'procurement' from the procurement department or the procurement process, the phrase ‘procurement function’ allows us to adopt a more holistic approach to describing an organisation's capability. The benefit of doing this is that it does not involve the conceit of assuming that when you join the procurement department you magically acquire capabilities not possessed by other stakeholders in the business.
A second benefit is that it helps manage the expectations of stakeholders who naturally want improved outcomes from "procurement". How many of us have seen business cases for investments in procurement technology which assume that the cash releasing benefits of improved procurement outcomes will begin flowing after implementation? But then a constraint emerges; it might be limited procurement capability or clumsy procurement governance. Use of the phrase 'procurement function' highlights that there are other elements of the function that need to be addressed and that technology and systems are only one part of the procurement function.
What about 'shaping strategic decisions'?
For the avoidance of doubt, I believe that the procurement function can be a source of competitive advantage and I also believe that it is an important contributor to strategic behaviour. But we cannot allow exceptionalism to blind us to the fact that 'procurement' (i.e. the procurement function) is not the sole source of competitive advantage or strategic capability in an organisation.
We can be enthusiastic supporters and advocates for professional procurement without claiming that we have some esoteric knowledge or implying that our stakeholders are commercially naive and need us to rescue them from the abyss of their nothingness. If you were constituting a team to address a strategic challenge, would you involve people who thought that their peers are less competent than they are and believe that they deserve to be involved because of a word in their position description?
Procurement exceptionalism is the belief that belief that people who work in procurement are exceptional in some way. Procurement practitioners are claimed to have characteristics or capabilities which are unusual or extraordinary which makes them different from other stakeholders. The term carries the implication that procurement people are superior in some way, usually in terms of commercial processes. The archetypal procurement villain José Ignacio López de Arriortúa famously required his team to wear their watches on the right wrist in order to emphasise that they were special and ‘different’ from their GM colleagues.
"Procurement; the master key to unlocking business potential"
I searched on LinkedIn for posts containing the word 'procurement' and came up with this statement. While we can forgive an influencer for a degree of puffery, I wonder how stakeholders in other functions might react to the news that their organisation's business potential can be optimised by adding the magic ingredient "procurement"? We may be able to ask them when they eventually stop laughing.
I have profiled the capability of procurement practitioners in organisations large and small, public and private, from Melbourne to Manchester and from Miami to Manila. I can say that there are some talented people in procurement and many people -including me- who have development needs. Procurement people are not -on average more capable than other knowledge workers.
Department, process or function?
Let's examine another phrase, also sourced from LinkedIn;
"In this article I reflect on the critical role procurement plays in driving business growth, managing supplier relationships, and shaping strategic decisions."
Let's give the author credit for the use of powerful verbs like 'driving', 'managing' and 'shaping'. Bonus points for getting both 'critical' and 'strategic' into the same sentence. But what does the sentence mean? In particular, what is meant by the word 'procurement'? The author does not feel the need to expand on what is meant, but in this context, it could mean one of three things. Let's examine them one at a time.
The first is procurement as a department. I suspect that this meaning is what the author intended, but let's state the obvious. An organisation can have class-leading procurement processes and class-leading procurement outcomes without having a procurement department. In everyday use if somebody uses the word 'procurement' we can assume that what they actually mean is the procurement department.
So is it reasonable to infer that the procurement department is "critical" to business growth? This will be news to most business development executives. I have worked with companies where new product development is a critical business process, and design, procurement, manufacturing and suppliers are united in achieving target costs. I have never worked with an organisation that would claim that the procurement department is the only enabler of business growth and I have worked with some stakeholders who would see no role for the procurement department in business growth. And don't get me started on 'shaping strategic decisions'!
The procurement process is a foreign land
The second option is that the author used the word 'procurement' to mean the procurement process. At the risk of being repetitive, can I point out that the procurement process is present in all organisations whether or not they have a procurement department. The organisation may procure well or badly. Stuff gets bought and delivered. Negotiations take place. Relationships are managed, with or without a procurement department.
The end-to-end procurement process involves stakeholders working in different functions, fulfilling different roles. This means that that the use of the word 'procurement' to mean the procurement process does not rely upon the assumption that people who work in the procurement department are more capable than other stakeholders. It is more inclusive and less conceited.
It is common to encounter stakeholders of the procurement process for whom the procurement process is a foreign land. They need guidebooks, translators and navigational aids to find their way from where they are to where they want to get to. For these stakeholders, the idea that the procurement process drives business growth or shapes strategic decisions would be greeted with derision.
The procurement department ≠ procurement
The third option is that the author used the word 'procurement' to mean the procurement function. This is a more abstract concept and the procurement function includes procurement governance, procurement organisation, the capability of full and part-time procurement practitioners, the quality of procurement processes and systems as well as other enabling resources that contribute to an organisation fulfilling its needs for external resources.
By decoupling the scope of the word 'procurement' from the procurement department or the procurement process, the phrase ‘procurement function’ allows us to adopt a more holistic approach to describing an organisation's capability. The benefit of doing this is that it does not involve the conceit of assuming that when you join the procurement department you magically acquire capabilities not possessed by other stakeholders in the business.
A second benefit is that it helps manage the expectations of stakeholders who naturally want improved outcomes from "procurement". How many of us have seen business cases for investments in procurement technology which assume that the cash releasing benefits of improved procurement outcomes will begin flowing after implementation? But then a constraint emerges; it might be limited procurement capability or clumsy procurement governance. Use of the phrase 'procurement function' highlights that there are other elements of the function that need to be addressed and that technology and systems are only one part of the procurement function.
What about 'shaping strategic decisions'?
For the avoidance of doubt, I believe that the procurement function can be a source of competitive advantage and I also believe that it is an important contributor to strategic behaviour. But we cannot allow exceptionalism to blind us to the fact that 'procurement' (i.e. the procurement function) is not the sole source of competitive advantage or strategic capability in an organisation.
We can be enthusiastic supporters and advocates for professional procurement without claiming that we have some esoteric knowledge or implying that our stakeholders are commercially naive and need us to rescue them from the abyss of their nothingness. If you were constituting a team to address a strategic challenge, would you involve people who thought that their peers are less competent than they are and believe that they deserve to be involved because of a word in their position description?