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Maybe 'friends' is too strong, but surely we should be able to collaborate, right? Sales and procurement have long been 'the opposing party' to each other. Both teams have had a history of behaving badly (to use an Anthony Iannarino phrase). But is it possible for us to collaborate to drive more value for the business?
In a podcast that I did with Anthony Iannarino on this, he said that sales wants to be consultative and trusted advisers, but that's not always how salespeople behave. Many times they behave transactionally. They're measured on quarterly goals, and annual goals, and they have quotas, and metrics. Those measurements can drive transactional behaviors. Likewise, in procurement (depending on the leader) we are equally guilty of driving for dollars and savings at the expense of strategy and the 'right decision' for the business. Now, don't get me wrong, I am definitely not saying you shouldn't drive for savings/profit, but I am saying that the needs of the business come above your savings targets and savings should not be the primary goal (category dependent, obviously).
The truth is, in order to be more competitive and drive innovation, both sales and procurement need to work together to be more consultative and advisory to the business. There are pockets of this happening in the business world, but it's a lot more rare than you think.
So what can we do to be more strategic and collaborative with each other to drive more value? Well, for one thing, we can start asking each other better questions. Instead of focusing questions on price and payment terms for the 'solution'. Why not ask what the real problem is? So often we get stuck in throwing out a stack of tactical solutions to strategic problems and just hope something sticks. It helps in the short term, but it's likely that the problem will keep surfacing in other places. And so we get stuck in a self-created pattern of plugging holes with our fingers in a leaking dam. Properly defining and framing the problem is so often overlooked. We're all guilty of this. I know I've done it. Ask the question! What is the real problem? Drive down to the root cause! Then solve for the root cause, not the symptom.
Second, we need to begin to rethink how we, as procurement teams, approach negotiating. Now I'll likely get some nasty hate mail for this next statement, but here goes: Your suppliers need to make money. There, I said it. I'm reading a book called, Finance Unleashed, right now that talks about this a lot better than I can. But ultimately, businesses rely upon their suppliers for innovation and solutions, but those same businesses then starve those suppliers of working capital (which is required for innovation) by driving down margins and putting in place ridiculous payment terms. Why? To meet a quarterly target? Look, I'm not saying you need to roll over and take crazy prices, but I am saying that we (procurement) collectively need to admit that we've been behaving badly for a while and it's negatively affecting our own businesses!
I realize what I'm suggesting here is a tough pill to swallow for some. I realize what I'm asking for may fly in the face of your leadership and the metrics that have been predetermined. But we need to start somewhere. If you're reading this blog, you're one of the very few that actually care about improving your skills. You're going to be the folk that change things. But it's not all on you. We all need to drive change. We all need to become more collaborative. Please don't misconstrue this post into thinking that I'm a proponent of doing whatever a salesperson/procurement says. I am not saying that you should accept the first price you're offered. I am not saying you should show all your cards. I am not saying that you should hug and sing Kumbaya. But I am saying we need to be open to being collaborative and we need to be the ones who begin that conversation.
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