ProcureCon Asia Virtual Summit CPO Panel: Agility in Procurement
Rob Halsall, Managing Director of The Executive Athlete, moderated the expert panel discussion. Arun Kumar, CPO at Perfetti Van Melle, Chae-Ung Um, Global Head of Procurement of LG Electronics, and Christina SS Ooi, Group Procurement Officer at FGV Holdings joined him.
What is your perspective all of an agile way of working within the procurement sense?
The panelists related agility to being more productive, customer centric, more efficient and effective. With the high level of volatility and turbulence in today’s world, agility in procurement is about being nimble through its reaction, by thinking and acting quickly when faced with a challenge.
“We must always be ready with alternative sources of supply. We do need to anticipate supply disruptions where a Business Continuity Plan (BCP) will be invoked”- Christina (Q&A)
It is also about keeping customers at the center of focus, having multiple checkpoints with the customers as their priority might change at different points of the transaction. To minimize disruptions, procurement teams need to be adaptable and flexible in improving customer experience and giving them exactly what they want.
Chae-Ung suggested two prerequisites towards building an agile framework in procurement. Firstly, everyone has to be on the same page in defining agility within an organization. This mental lens will orient them towards understanding the vision and guide them in responding with appropriate actions, responses and skills.
“Practice joint-KPIs with internal stakeholders so that we are 100% aligned with them. This way, our internal stakeholders will see Procurement as their trusted advisor and business partner. In fact, if our procurement SPOCs could be co-located at the clients’ work place that would definitely help to create and foster better work rapport and close engagement with our clients” – Christina (Q&A)
Secondly, is to instill all stakeholders with a global mindset - making the impossible, possible. It is important to bridge the gap between strategy and execution, and codifying this philosophy and making it part of the culture will get employees in the habit.
Have you ever experienced situations where an approach with agility did not work or did not have the desired business outcome that you're hoping to achieve?
When agility kicks into play, it is about the change readiness of that organization in adapting to a ‘new normal’. This means a new way of working. The critical thing in any organization would be the leaders being the stable foundation, leading with a common purpose and empowering people, else, the rest of the troop will just fall flat.
In light of leadership, every leader needs to muster soft skills in maintaining and building relationship. Especially in procurement, you need to be persuasive to influence suppliers and buy-ins of senior management. Having a good EQ and rapport with colleagues when you are working cross function in creating a cohesive and productive work environment. Most importantly, being able communicate effectively on all levels.
Arun touched on the point of creating the right conditions for success. An organization needs to quickly assemble teams with the right talent by training them and bring them up to speed with the necessary tools. This creation of a dynamic eco-system enables people to build up their expertise to address new challenges and opportunities, to put their talents to the benefit of the company.
“Bringing in innovation, understating the business’s strategy and helping to deliver that, facilitating improvement in operational efficiency (through’ well executed SRM, etc.,), grooming future leaders and connecting closely with stakeholders are few of the avenues in which Procurement could seek to create value for the business” – Arun (Q&A)
Lastly, as with all new strategic processes, we sometimes have to face some setbacks. Understanding the challenges, learning from the complexities and working on its implementation can be successful. However, as the panelists highlighted; an important principal of agility is testing and learning. Trial and error is instrumental to any learning process, and ultimately, we can only gain from it.
What are some critical success factors to inculcate an agile way of working in helping make a good and rapid decision in support of key business priorities?
Christina was certain of two critical factors. First, to kick off with a clear taxonomy of the plan. Not every team can be an agile team. Hence, the leadership team is strongly linked to determining the capabilities of various teams comprising the chain. Next, would be accountability. True accountability in focusing on driving improvements as a collective effort.
“Very crucial to have 100% C-suite support for the Agile program. In fact, the C-suite themselves must practice the agile way of working. I would recommend a regular cadence (monthly) with C-suite while the rest of the troops have a bimonthly cadence with the appointed Steering Committee”- Christina (Q&A)
For Arun, it was about nurturing an enabling environment - making sure there is clarity in the message, mandate and role to perform the tasks at hand better. At the same time, there should be good metrics to make sure everyone stays on track in the right direction and the right speed.
“More important is to have the buy-in of your team. Remember, “Agile” may be a fancy term, but is commons sense way of approaching how you deliver your goals. Your goals are always there and, one way or the other, you will need to deliver the” – Arun (Q&A)
“Culture eats strategy for breakfast,” said Peter Drucker. In accordance, Chae-Ung shared that one needs to build a forward-looking working environment by analyzing its culture and learning to manage within its boundaries or, if necessary, change it. The other thing is the training program, no matter how minimal the task is, you have to train people. This is the investment into your most important asset: your employees.
Challenges that you might face when you go through that transition process to this new way of working.
The panelists shared that the main obstacle is actually the people themselves. At times, resistance is tied to the culture and the climate of the organization. Setting a purpose in motion requires cultivating a shared identity despite diverse cultures or hierarchy. Organizations can start by taking small steps initially and expand further after time.
“Nothing beats forming agile teams from internal people because our own employees know best about the internal culture and the climate of the organization – the internal tensions, the internal pressures, the internal players (who’s who), the internal joys, and most importantly, the internal sentiments of the organization’s history and legacy.”- Christina (Q&A)
Leaders have to start preparing the people for change way ahead of the execution. Spend time and energy in getting people used to the concept. Transformation should not whitewash the past, but create the conditions for people to adapt to, initiate and embrace change.
Some examples would be to:
• Create the safety and space for people to solve problems, take risks and innovate.
• Encourage team members to articulate problems and approach colleagues for advice.
• Assure team they will be given all the support , help and guidance they need.
“… but when there is a significant resistance, having support from the external consultants does help to jump start the program” – Chae-Ung (Q&A)
Lastly, recognize the achievements and motivate your people while having some fun. There is no better way to get a team to keep doing more of what works and less of what does not unless they are happy. Establishing a positive environment, a team can overcome setbacks and bounce back with a common effort and a direct plan in line with the organization.
How has developing an agile way of working affected the culture within your direct team or your broader business?
According to Christina, procurement teams have always been view as being very traditional in their mindsets. She personally sees agility as a catalyst to leapfrog to the next level, because everybody wants a World-Class procurement team right now. Competitive advantage goes to the teams who can roll with the punches. Procurement has become the strategic driver in delivering value that simply was not effective to achieve under old paradigms.
“Organizations review their top management periodically to inject diversity and freshness to the overall ecosystem of the organizational climate. That said, the Procurement organization must relentlessly push for the entire organization to view Procurement from a new perspective – not as an administrative back office function, not as a reactive tactical team, and not as a rubber stamp.”- Christina (Q&A)
Have you invested in or developed any specific digital solutions to assist in your agile delivery?
Chae-Ung suggested that first we needed to understand what data we had to make the process better. In a digital age, we are inundated with tons of information so we will need to analyze and extract the value from these data.
Secondly, organizations need to have a simulation to maximize their opportunities- i.e figure out for what works best instead of cherry picking. Having greater visibility means enhanced information sharing, faster communication and making better, more informed decisions.
Conclusion? All the panelists agreed that agility is both a skill set on the mind and thinking, but also an execution capability!
Want to find out more, or catch sessions just like these? Take the Virtual Plunge today: