Originally published on December 17, 2020 by Supply Chain Best Practices
A deep knowledge of the culture, the team’s capabilities and the business process allows Velocity to better influence the client’s growth by way of an effective change-management strategy.
When it comes to implementing changes to a company’s long-standing current state of procurement, the biggest challenge is often aligning the business and/or the leadership that changes are even necessary. The business teams often fear for what the change means for their futures. The leadership may often be too close to the situation to identify, and make recommendations for, the gaps in processes, technology, governance, and team structure – areas where change is required. The internal biases that may influence the desired outcomes can prohibit the company from accomplishing industry best practices and realizing its full potential. The “way it’s always been done” shouldn’t preclude the business from evolving, maturing, and/or transforming.
Velocity Procurement, a self-proclaimed “partner in procurement”, offers a third-party, unbiased picture of a company’s operations and proposes solutions to positively impact their clients’ bottom line. The Philadelphia, PA-based advisory, consultancy and managed services firm focuses on minimizing the resistance to change within its clients’ procurement operations through cultural/organizational improvements, process innovations, and cost reduction efforts.
Pandemic aside, the recent need for innovation has never been more apparent than in industries such as retail, media/entertainment and manufacturing, where a decision to stick with the decades old business model that was instituted by the founder(s) can mean the difference in survival for said business. In the age of Covid-19, even more verticals are at risk, including airlines, hospitality, financial services, commercial real estate, and the list goes on.
“We’re at a pivotal time in procurement, and really all of supply chain, where we as procurement professionals and practitioners have a significant opportunity to create and deliver value to the business,” says Grant Dearborn, Managing Partner. “But this cannot be done in a vacuum, or in silos. Executives must consider the impact that transformational activities can have on the maturity of their procurement organization, and how that will extend to the health of their business and the broader set of organizational goals. Adaptation and innovation are a must in a competitive market, and to hinder these efforts to change is to effectively hinder a company’s growth.”
Velocity Procurement’s mission is a simple one: help client procurement organizations to be as impactful on the bottom line as their revenue generation efforts are on the top-line. Because every organization is unique, Velocity Procurement focuses on integrating with their clients’ culture to understand how the current state of the procurement organization came to be, and where the project sponsor(s) want it to go. It looks at each element of the process, from policies and procedures, to onboarding suppliers and signing contracts, to the processing of POs and supplier invoices. A deep knowledge of the culture, the team’s capabilities, and the business process allows Velocity to better influence the client’s growth by way of an effective change management strategy.
According to Dearborn, an effective strategy should always include hearing directly from the teams who are intimately involved, not just conducting impersonal surveys or scorecards. “We do our homework to understand not only what’s on paper, but also conduct workshops and face-to-face interviews to understand what’s really happening throughout the procurement lifecycle,” Dearborn says, “It’s a great way to get some of that inside information…the candid substance that can’t be found in a policy or process document. Often the folks closest to the processes have the most valuable insight into what is broken and why it may be broken. They have also may have put a some thought into how it can be fixed, so that becomes a great collaborative opportunity for us as a firm. The faster we can get to the root of the problem, the more effective we can be as a partner to help refocus efforts and move forward in the right direction. It also gives our consultants a chance to earn the trust of the organization one team member at a time.”
Velocity Procurement has validated, to no surprise, that corporate culture is established by those that wield the most influence. That typically comes from the top down, but it could even start at the bottom – being driven by those that work in the day-to-day operations and know the business beyond data points and executive summaries. Regardless of where it starts, the behaviors are often enabled by leadership – often unknowingly.
Through the process of reviewing, collaborating, and validating, Velocity Procurement provides a comprehensive, unbiased picture of the current state of a client’s procurement operation. “When you go through those conversations, you get different reactions,” Dearborn continues, “and it’s our responsibility to gauge those reactions and get our arms around them.”
Communication Makes for a Smoother Transition
Sarah Nelson, head of Velocity Procurement’s change management practice, has helped Velocity’s clients to prepare their organizations for changes across team members, process, and technology. In Velocity’s talent management approach, resourcing and the candidate pipeline come directly from the business; therefore, Velocity’s consultants are better equipped and able to relate and connect with the clients and their project teams. Nelson, like her colleagues, experienced first-hand in her previous role the very challenges she now helps to solve for.
“That extra touch in helping support the very team members within the practitioner community that we used to be a part of lends credibility to Velocity’s approach and methodology,” Nelson suggests. “We can relate and empathize on so many levels. It further opens the lines of communication and instantly builds trust with the client.”
Part of change management is providing the right guidance, along with proper training and ongoing support. For example, if 30% of team members will be impacted by implementing a new purchase requisition system, an organization must provide clear and concise messaging to those affected throughout the transformation process, not after.
Communication can also come in the form of awareness. One of Velocity Procurement’s clients called their procurement tool “SpendWellTM”, effectively tying the client’s business name to the initiative they were implementing. The company went through branding exercises and provided various swag items to team members to keep at their desks with SpendWellTM printed on them to remind them of the program. “It helps for the client to keep their team members engaged and add a little bit of fun while reminding them they are not alone in the transition,” Nelson explains.
A Collaborative Mindset
“Procurement is often perceived as the department that takes away budget and/or controls from internal customers,”, Nelson says. “Procurement historically has a negative connotation when their objectives (savings) are not communicated clearly to the business.” When she approaches difficult personalities or concerned team members with a more collaborative and empathetic approach, it changes everything from their body language to their outlook on the transition at hand.
“When you’re in our business, you understand that you’re often entering into hostile territory, so anything that can disarm team members is helpful. I begin all of my engagements by providing conference room snacks, because who doesn’t open up when presented with free food?”
Nelson’s top 3 suggestions for any organization entering into a procurement transformation, not surprisingly, centers around change management:
- Engage critical stakeholders early and often. “The earlier the involvement and participation that business stakeholders have will affirm their input as valued and strengthen their commitment.”
- Over communicate. “The more time invested, and the frequency with which you address those affected by the change, the easier it will be to help manage emotions and allow for early problem solving.”
- Find the right partner. “I can say this because I’m not in sales, but it’s so crucial to engage the right partner that is willing to invest in understanding what will work for your organization, not just some off-the-shelf change or implementation methodology. Working with the right partner helps to eliminate virtually all of the unknowns and speeds the time to value up significantly.”
Transforming procurement is much more than merely adding a new best-of-breed technology suite, adopting best-practices or upskilling the team. It is about knowing where you’ve been, assessing where you are, mapping where you want to go, and defining what and who it will take to get there. Business leaders don’t spend enough time learning from the past or considering what they have inherited when joining a new organization. It is here where effectively understanding the root causes, the levers for change and the maneuvers needed to stimulate change are combined for success. A procurement transformation done well is built on a foundation of effective change management.