Interviewing Phil Ideson was quite exciting for me because Phil was actually somewhat of an inspiration for me and part of the reason I started the Negotiations Ninja Podcast. If you're ever trying to find out information about procurement and what the trends are, where everyone's going, where technology is moving, latest processes and procedures, he is the guy that is going to get you that information on his Art of Procurement podcast.
We're both procurement guys and both have podcasts and if that wasn't similar enough, when we got to talking, we realized that the similarities in our backgrounds is actually quite startling. It feels like we've known each other for a long time. On this show, Phil and I wax poetic on procurement negotiations and some of the challenges that procurement people face in negotiations and we dive into the major trends that each of us see in procurement negotiations and what is coming for procurement in the future.
We collaborated and recorded for his show at the same time, so check that show out in the show notes!
Guest: Phil Ideson
Mark: Hello negotiation junkies. Thank you so much for joining me, Mark, on the Negotiations Ninja Podcast. Today we have Phil Ideson, the man, the myth, the legend.
Phil: I'm not sure about that, Mark.
Mark: The host of The Art of Procurement podcast, the great blog, The Art of Procurement. You've seen all the weekly posts. You've hopefully signed up for the newsletters. Phil, how are you?
Phil: I'm doing good, thank you Mark. And thank you very much for the overly generous introduction. I think it's great to actually connect and talk to you today. I'm really excited for this.
Mark: Yeah, you know what, I've been wanting to do this for a really long time. For those of you who don't know, Phil and I are sort of in the same space in that we're both procurement guys by trade, but kind of talk about different things. On his podcast, it's really holistic. I mean, soup to nuts, anything you want to know about procurement, Phil talks about. It's probably the best show about procurement, specifically, you're going to hear on the internet today. Mine is certainly more focused on the negotiations' aspect of things. Certainly Phil was a great inspiration for me.
I'll start off by saying, thank you Phil.
Phil: Thank you. You're making my ego far higher than it deserves to be.
Mark: I'm building you up to chop you down, then.
Phil: Yeah, I know. It's funny, you know, I make things up as I go along and experiment. I've been delighted with the Art of Procurement and the podcast that I built, and what's come of that. But, for me it's just all about we're all a community of procurement professionals. My background is deep procurement, background across a variety of different things, variety of cultures, industry, categories, you name it. I started to be a generalist in procurement. I was on the buy side, on the sell side. I just really wanted to bring together the experiences people are having so we can all learn from it.
Mark: I love that. What is the genesis? How did The Art of Procurement all begin? It's so fluid and so good in production, surely at one point in time it wasn't.
Phil: Oh, yeah. I won't, but if I was to every go back and listen to episode one, I'm sure I would completely cringe. That's not just saying 170 sounds like somebody who's on the BBC or anything like that, because I'm learning with every single episode, but there's definitely been a learning arc, let's say, of when I started.
When I started, well, let me step back a little bit. When I set things up, I'd been probably 16 years in my procurement career. I said I was on the buy side, I ended up working for a large consultancy involved in procurement outsourcing. There was something at the back of my mind where I always wanted to try and do something on my own. As I was thinking about that, I ended up leaving my job. I chose to go and set up my own business, and I'd started to listen to podcasts a lot. Listened to them as an inspiration, that I could possibly go and learn from these people so maybe I'd be a little bit more informed about what to do when you go and set up your own business.
As I was doing that, I just thought, "There's nothing in procurement, so why not try something in procurement?" The idea of doing it scared me. It still kind of gives me the butterflies every single time I get on and start recording a podcast, but I really believe in self-development. To develop you have to make hard choices and choices that may not be comfortable to you, and you've got to put yourself in uncomfortable situations sometimes. That episode one was me putting myself in a really vulnerable, uncomfortable situation to try and develop myself as opposed to thinking, "I'm made to do podcasts, this is easy." It was a challenge when I started. When I started it took me like three months, probably, to actually to it from a decision I'd made that I wanted to do it, because I tried to put it off for all kinds of different reasons, and figured out, "I'm going to learn by doing so. Why not start now?"
Mark: Yeah, and isn't it funny that that's where all the growth happens is when you take that step to have those uncomfortable moments and you realize, "Yeah, screwed that one up, but now I know what not to do."
Phil: Yeah. I talk about the power of the edit button, so that always made me sound a little bit more intelligent that I probably was, and gave me a little bit of comfort. But it is all about just doing things that are uncomfortable, and I just find that's where sustainable learning comes from. One of the things that I really wanted to do with it was to really help others realize that they're accountable for their own choices, the decisions that they make, and those might not be easy decisions. But if we can create some kind of space, which is a safe space from to learn from decisions that other people are taking, then maybe it takes some of that fear and some of that risk away.
Mark: Yeah, and certainly your show definitely communicates that, and it's an area that's safe where people can learn. And learn from both the successes and the failures of others. You speak extensively to many of the leading minds in procurement today. Are there recurring themes that you see that keep popping up over, and over, and over again that we should be paying attention to as procurement professionals?
Phil: You know, it's interesting when I talk to people, where people are on this maturity journey, it's usually in one of three different places. Either it's folks who are just getting started, or they're trying to enact a transformation from, perhaps, a place where a previous organization didn't have the result that may have been expected of them, or didn't have the internal relationships or partnerships. Then there's the folks who have really been able to build a good team, but they don't really feel like they're making a big difference. They're doing what the organization needs, but they're not really doing more than that. Then the third area is people who want to really challenge, I would say, the art of what's possible. The team is firing on all cylinders and doing great work but they don't want to stand still. They want to continue to challenge and stay to square, and kind of really, fundamentally re-position the role that procurement has. People usually fit in one of those three areas. But even within those three areas, there's a lot of consistencies in what people talk about, or what challenges people had.
I had to think about that as reflecting on all the interviews. It's crazy. It's like 175 interviews so far that I've had the opportunity to talk to people. It's just similar things that keep coming up time and time again. As I think about it, I think one is just this notion of being a trusted partner. How can we build such strong relationships internally that we ... I hate, I really the term, "seat at the table," so I don't think of it in those terms, but how can we make a difference to people that we work with? Or stakeholders that we're seeking to partner with? Because a lot of the relationships we have are push relationships where it's one way, they don't necessarily want those, and we're trying to push ourselves on them.
The next one is, how can we be about more than just savings? I don't want to belittle savings. I was talking to a CPO, actually, just this morning who was telling me, and reminding me that without savings, it doesn't matter anything else that you can do because no one's going to listen to you. So savings, whether we like it or not, are the table stakes. But then once you've got that in place, how can we use and build on that so we can amplify what we do to other areas of value creation?
Then I think it's about soft skills. One of the challenges that a lot of procurement leaders have is, I say idea but it's based, at least in my experience, somewhat in reality, is the fact that a lot of us are really comfortable being behind a spreadsheet, living behind a spreadsheet, doing pareto analysis, it being a numbers game, and realizing that numbers will only take us so far. We've got to get from behind our screens to be more commercially focused, kind of that emotional intelligence that comes with being able to influence and persuade, things like that. I think that's something that folks struggle with, or that CPO's struggle with getting that scale across their team.
Then lastly, it's new technologies. My background is in outsourcing, part of my career was in outsourcing and I would see this, people would fear outsourcing so they would put their heads in the sand and think, "If I hide from this, maybe it's not going to impact me." Today I see exactly the same with technology. There's such fundamental changes in technology and the technology that's available to companies to buy, to help the art of buying, or the transaction of buying, that we don't really even know how that's going to impact what the procurement function looks like. We can project, but we don't really know. We need to embrace it and I think procurement leaders are struggling with, "How do I embrace this rather than fear it and be reactive to it." That's certainly subject to a lot of discussion within procurement circles.
Mark: Yeah, and I think you hit on a couple of areas there, where I've certainly noticed there's this issue that we have with relationship building, especially internally, procurement people in generally. Because the profession tends to attract data driven people, who are, like you say, used to sitting behind spreadsheets and making the numbers sing. It's not uncommon to find a procurement person who doesn't know how to use VBA. So, when you ask those people to try and develop relationships internally, it's tough. It's a skill-set that a lot of us struggle with.
I think in order for us to be able to communicate, and I hate to use the word, but sell that value internally, we need to get a lot better at building relationships internally to be able to show that value. I mean, especially when that ties into the whole technology piece. You and I have collectively had conversations with folks like Greg Tennyson and other procurement leaders who are leveraging technology to a whole new level that hasn't been seen before. But we're not even able to have those conversations if we can't develop the relationships internally. So I think for me, being able to develop those internal relationships and showing that internal value, and the conversation that you were talking about in terms of showing tables stakes about savings, that is the conversation, right? If you can't sell that value then it's going to be pretty difficult to sell technology improvements, for instance.
Phil: Right, and one of the things that I see is that these technologies, they're coming whether we like it or not. So if we don't embrace it, somebody else will. Somebody else may be the CFO, maybe the CIO, it might be the CEO, whoever it may be. They're provided the opportunity to experiment or to buy this technology, which ultimately maybe positions them as being efficient because it's going to take away this procurement function. In their minds, the procurement function may be a team who's helping manage transactions, and maybe buy more efficiently but not be a game changer for the company. So for them, it's a relatively easy ROI, is is this technology going to basically do what I'm paying all this headcount to do, and do it much more effectively?
If we're not embracing these technologies to help us become more effective, that's a fear that I have for at least procurement as a profession. The word procurement, to me, it's a way of being, it's a way of doing. I don't think of it, necessarily, as a function, because everybody buys and everyone will need to buy. The more you think of it as a function, I think that's one of the existential challenges that we will have if we don't embrace technology and figure out how to use it rather than, say, to be fearful of it.
Mark: Yeah. So do you think that that's where we're headed as a discipline? Is procurement moving in that direction? Is it the fact that, look, we either need to get on the bus or we're going to miss it? Or is it something that people need to think critically about? You know, we talk a lot about artificial intelligence, and how artificial intelligence is impacting procurement. There's technology that's being developed right now by different companies, I won't mention names, that could fully automate a sourcing process because of the artificial intelligence that's involved. Is that the direction that we're going?
Phil: I think so. I mean, part of me hesitates because I have conversations today with some companies about building capabilities that maybe a lot of organizations 20 years ago were already there. So, when I have those conversations I'm sometimes thinking, "We're talking on one hand about the opportunities of a fully automated sourcing process, and on the other hand we're talking basic, so are we really, truly there en masse?"
But when think about the reality, why not? What value is driven through a sourcing process? It's kind of a devil's advocate question, I think. But I read something last week saying, and I have no reason to doubt it in my experience, but, "95% of decisions on which supplier is going to be used, that decision has already been made before any RFP process starts." So, in 95% of the RFPs or the sourcing processes that we're running, it's kind of a moot point. We already know who we're going to choose, so why are we doing things like that in the first place? Why aren't we focusing on how we come to make that decision before we even go to a sourcing process, where it's really just consummating what 95% of people have already decided they're going to choose. That's where the value is.
Then once that supplier is chosen, how can we be creating an environment that enables the coming together of our company and the supplier to generate value that's greater than those two components individual? That's where value is. Things like the sourcing process, I question how much value there really is and why that couldn't be automated.
Mark: It's so funny that you say that because I had a conversation with a guy named Anthony Iannarino, who's a sales coach. One of the big things that he has a pet peeve on is the RFP process. He's like, "At what point do we ever derive, collectively, both on the sales side the procurement side, any value out of that process?" Because ultimately it becomes, even once the award is made, the conversation after award could potentially totally change the way that that contract is written.
It's so interesting to think about, "Okay, well if we're not going to run a sourcing process, if we're not going to run a competitive RFP, then what do we do? What value do we provide?" I think it really drives home the point of this is the evolution that procurement needs to make is become that strategic, internal, consultative body that doesn't just drive a process, it helps the company to make better decisions. Not only on what product we're using, but also on the risk profile that's involved on whether or not it's cap-ex and op-ex, and how to split those costs effectively to drive better cash flow, or to make the company more money. So, becoming more of that strategic, internal consulting function when you think about buying something or buying a solution, I think that's, eventually, well, it is where we need to end up, in my mind.
Phil: Yeah, and that's commercial. You become a commercial consultant, not a procurement consultant because it's not just about the act of procurement. One of the things that as my thinking has matured, you recognize and realize that we don't have a monopoly on knowing how to buy. Everybody buys in their personal lives, whether it's something simple like going on Amazon to buying a house, negotiating for holiday, buying a car, whatever it may be. Then we suddenly think when we come to work that the people that we're working with don't know how to buy, or what the buying process is, or anything like that.
Really, I see, it's incumbent upon us to help those people buy, but to enable a lot of self-service. Like, do we need to be involved in all the things that we get involved in? Or do we need to help provide some guide rails for people within the business to buy on their own, then just focus on their purchases, or those categories or....I think about it more about problems and solution and market opportunities. So, identify the challenges as a company we have and identify the market opportunities. That's where we should be looking at how can we lever the supply market, versus feeling like every transaction has to run through us.
Mark: Yeah, I totally agree with you. I mean, the whole concept of self-service for me is kind of a big deal. Especially when you think of spending cards internally for the organization. The cost to produce a PO for something that's five grand, is it actually worth producing the PO, or should we just give a credit card to someone and have them go buy what they want?
When you start doing the analysis on how much it actually costs to buy something, and the number of touchpoints involved in producing a PO, especially in an organization that doesn't necessarily have an automated process in place, that cost could be huge. Upwards of $600 for a PO at times. When you think about the cost involved in actually buying something, the whole concept of self-service becomes significantly more attractive.
Phil: I'm currently doing a client engagement where I'm helping to implement the idea of guided buying. That drives a lot of the self-service model, allows people to make purchase decisions on their own. But also, something that I've learned from some of the conversations and interviews I've done is it's incumbent upon us to make the experience of the buyer ... When I say buy I mean we could really think of as a stakeholder, but somebody who wants something. We want to make that experience as positive, and as simple, and as easy, and as quick a process as it possibly can be. Because 90%, I'm making up a number here, but 90% of the transactions that that person has with procurement is to buy something that's easy.
If we're making that 90% of the time that they every work with procurement, if we make that easy then they will be more likely to come back to us and want our help for 10%, when they working on something that's complex, or challenging, or they're trying to solve a problem. But if we make those 90% of the interactions really difficult. Maybe it makes our life easier because we're giving them a tool, which we get all the reports we need but the user experience is awful, then they're going to have a bad perception of us. That will then mean that they're less likely to want to work with us when they're working on interesting things.
Mark: Yeah. I totally agree with you. So often I think we get thought about as the transactional order-takers, essentially. Many of us are. Many of us fill that role. I think from a sales perspective, I'm thinking from the other side of the table, they think of us that way as well, so that reduces our leverage, especially when it comes to negotiations. Not only negotiations externally, but negotiations internally because that messaging is portrayed from person-to-person, from sales person to internal stakeholder, and vice versa. The whole concept of negotiation and procurement is totally intertwined because typically, whether you're a buyer, or a strat sourcing professional, or a category manager, or whatever you want to call yourself, you're taking part in the negotiation process on an ongoing basis. You don't do yourself a service by being the transactional order-taker, essentially.
You've taken time throughout your process as host of The Art of Procurement to listen to some of the leading minds in procurement, what is it you think that we as procurement people, in learning from those people that you've had on your show, can do to drive forward strategically, and this is a loaded question, but become more strategic? Also, how do we use that to drive the discipline of negotiation forward when we're having not only our external negotiations but also our internal negotiations?
Phil: Let me just touch on negotiations, because one of the things that I think I picked up on, and I definitely believe is that we think about negotiations as being, "We're negotiating a deal or a contract." But actually, negotiations forms every part of everything we do in our daily lives, whether we're negotiating for influence with somebody, or negotiating for resources, or whatever it may be. It's not just negotiating that our suppliers get the best price, or to get some other things thrown in, or anything like that. So that's how I kind of think of negotiation, generally
When we think about becoming more strategic, and I don't want to paint with a broad brush because I know a lot of folks are already there and there are a lot of folks who are trying to get there, who aspire to be more strategic. The key, in my experience, but also that's been informed by a lot of the interviews that I've had, I think comes down to this idea of customer centricity. So, how aligned, truly, are we with the needs of the people that we're working with? How are we providing them with a value proposition that's so compelling that they would be crazy not to want to work with us? How can we think of ourselves as a client to them, not a department who just happens to be in service of them?
There's a couple of things that I think are actionable around that. It's just understanding what they're needs are. How many times do we really, truly understand what they want? But also, what are their objectives? How do what they do fit in with the company's objectives? What are their biggest risks or their fears? Because as you probably know from the selling perspective, people more often buy fear than they buy for opportunity? So what is it that they're afraid of that we can help them, that we can mitigate a risk for them? Knowing that, I think, is really important.
The second one that I think is actionable, too, is how can we come to each one of our conversations or interactions with those who we seek to work with, armed with more information, or insights, or knowledge than they have on their own? I say that they have on their own, it might not be because they don't know, they might not just have time to know. If we command with that, then we're bring so much more value to them than being able to come and say, "I can run you a really strong procurement process, which will provide a better outcome." In our perception, if we fear-raise, it will bring a better outcome than if you did it on your own. Actually, if you're coming with information, insight, and some data, you're already proving that there's something you can bring that they don't have. Those things really help, I think, build that bond, which positions us as being that advisor as opposed to we're somebody who's here to help them run a process and they might not want that help.
Mark: Yeah. It's actually really funny that you mention the insight thing. I just got off a conversation with a guy named Matt Dixon, who co-authored a book called The Challenger Sale. He now runs the selling practice for a company called Korn Ferry. The whole thing that he talks about, whenever he talks to anyone is, "What additional value are you providing as a sales person?" This may upset a few procurement people, but I believe that procurement people are more sales people than they are actually procurement people, because they have to sell-
Phil: I think so, too.
Mark: ... their value internally. So, if you're not providing additional value or additional insights to your internal customers, then you automatically default to that order-taking, transactional position, right? So if you're not coming up with data that shows them a new way to do something, or shows them a less-costly, less-risky approach to doing something and you're selling the sourcing process, you're going to lose that sale every single time. Then, they're just not going to use you.
Phil: Yeah, I mean, the opportunity we have to really make a difference in my mind is to really be a catalyst, or a catalyst of change. It's ironic that we try and do that but we're not necessarily good at looking inwards and doing it. But the ability to be that catalyst is so structurally based on the ability to persuade, influence, and sell people on other ideas, of different ways of doing things. The skills that come with selling are so close to the skills or procurement, or the skills that we are moving to, or transitioning to, and evolving to in procurement, they're so similar you could probably drop from one into another pretty interchangeably.
Mark: Yeah, totally agree with you. What a lot of people may not know about you is that you also run another company called Palambridge.
Mark: Maybe you can tell us about Palambridge. And the reason that I'm asking you this is because what I would like to do is get into a conversation of you run your own practice, you have your own podcast. But specifically within the practice piece, what are some of the major negotiation, and I talk about negotiation specifically, negotiation issues that you see on your end?
Phil: Yeah, so, very briefly, Palambridge is, very briefly, it's an eco-system of subject-matter experts. So a lot of organizations really struggle. It comes back to what I said earlier about accessing insights and knowledge. Because it's really, really hard to know as much as you can about supply markets, about every single supply market that as you procurement professional for your organization, you're expected to know about. Because there's so many one-off requests or things that you only buy every two or three years but we just don't have the scale to buy a specialist in that area. So, at Palambridge what we do is we work with clients who have opportunities to make a difference within a particular category, or a particular project, but they don't necessarily have those insights. So we pair them with people who do, who come from within the procurement community. We've done a more on-demand basis, so it's not like you've got to outsource and spend millions of dollars on an outsourcing project. It's a lot more flexible model. But that's just a tee-up.
The question you asked about negotiation, I see two different areas where I'm most often involved in negotiation. The first one is with myself, with my team. It's an internal negotiation. As entrepreneurs, as trying to build business from the ground up, the scarcest resource we have is time. So it's a negotiation inside my mind, on my leadership team of, "Where do we actually focus?" What are the things that we can do that are really going to make a difference and therefore create the value that will be responsible compensated for, which obviously mean we can continue doing those things that we're doing. I think that's the biggest negotiation for me.
Then the second one when I think about it, outward, is around value. Once you've established, in my experience, once you've established the value that can be generated by taking a certain route, and that route may involve our services, the price negotiation is relatively straightforward. It's the negotiation of the sea of value that we created through the leveraging of the service that you're providing. I think that's the biggest negotiation.
That's something I wasn't really prepared or thinking about when I got involved in setting up my own businesses, because you think about, negotiation, again, just being price. You think it's worth this, I think it's worth that, where are we going to settle? But I think once you've negotiated the value prop, the pricing is less of a backwards and forwards, because you've already identified what will be, or what you hope will be generated through a project or an initiative.
Mark: I find, and I can relate to your first one, in terms of negotiating with yourself on time, because even having the time to think about where you're going to spend your time is really challenging. As an entrepreneur, if you're running multiple channels of a business, whether it be podcasts, or the eco-system of subject matter experts, of whatever it is that you're doing, and entrepreneur will be able to relate to this is, "How do we generate more time?" And negotiating with yourself on what is it that we can take advantage of right now that's high value, versus what may be high value in the future. That's difficult discussion to have with yourself.
Phil: It's like negotiating your own priorities. Like you said, you don't even have the time to sit down to think about what your priorities are. That's been the biggest challenge for me, honestly.
Mark: It's a huge, huge issue. I think the second part that you touched on in terms of perception, and building positive perception with regards to the value proposition that you're selling is huge. I think one of the things that negotiation professionals, whether they're sitting on the sales side or the procurement side often forget about is perception is everything. If you're creating a negative perception, or a perception that you didn't intend to create with regards to selling the product or service that you're selling, regardless of what it is, then that becomes a much more difficult conversation. But if you can shape the conversation positively, and to use Matt Dixon and Brent Adamson's approach to challenge your customer, whether it be internal or external to think of new ways to do things, that's when you become valuable. You know what, I can absolutely relate to both of those things.
Phil: Yeah, and perception becomes fact, doesn't it, whether it's a fact or not? So that's anchored into your negotiation. So you're negotiating around a fact which may not be a fact, but once it's perceived there's not much that you can do to change that.
Mark: I totally agree. What about situation where you may have bombed. We often think about, on the show, about failure. Selfishly we love to learn about the failure of others so that we don't necessarily need to make the same mistakes.
Mark: That's absolutely what it is. So, maybe you can describe for me and for the listeners a negotiation or a situation where you failed. What did you learn from it? And what would you do different?
Phil: I think negotiations that have failed, it's hard for me to give specifics because of confidentiality, but let me say that when negotiations have failed it's because I've only had my own outcome in mind. So, what that means, I think, more traditionally is a win-lose negotiation. So going into a negotiation when I'm only concerned about what it means for me and I'll use my power dynamics in that negotiation, that leverage that I have, to get the other side to basically give me everything that I want. Which I think is irresponsible and I think it's unethical at this point, but earlier in my career it was all about getting the deal and getting the deal we needed and doing everything that I could at all costs. Then once a deal is done ...
Somebody told me the other day and I just love the thought of it, supplier have this big bag of discretion. So there's everything that's in a contract, that's in a pricing agreement that we negotiate, but they also have the ability to do other things outside of whatever it is that we negotiated. The way that we act within our negotiation responsibility, how ethical we are in that negotiation, drives whether they want to use that discretion with us or not, or use it with somebody else.
I didn't see that earlier in my career. So there've been things I've negotiated for, where ... An example was, I had a market, this is when I was in automotive purchasing and direct purchasing in the automotive space. We bought something where there was only supplier in the market, so we were developing a second supplier in the market. We spent a lot of time developing that supplier in the market to the point where they were ready to actually compete with a monopoly supplier, then we used that just to reduce the price of the incumbent. So we invested this time in this supplier, they now had the capability, but then we didn't actually follow through and give them the business because we just used that to increase our power with another party. Which had a tremendous impact on the other company because they'd invested this money in also developing this capability on the thought that they would end up getting our business.
What that means for them is they're out money, they're out of money, they're also scarred. They don't want to be doing this with others, so we're impacting the market place as a whole. Ultimately, actually, that supplier got bought by the monopoly supplier because of the capabilities that we developed with them, but also, because I think that it had an impact on the supplier themselves. So, you're kind of playing with companies futures, and jobs, and careers and things like that when you're just being short-sighted and looking at, "What do I need?" And that's what I've really learned is we need to be striving for win-win in every single negotiation.
We're taught, I think, as procurement professionals, that we have our matrix and that there's a certain segmentation of things that are very important, and a certain segmentation of things that aren't. But why aren't we striving to be a supplier of choice, even with those suppliers when we're buying commoditized items from, because there’s still discretion they can bring to us which have value over and above price.
So, I've really changed my thinking about how to go about a negotiation, and to how aggressive to be in a negotiation. How we have to be responsible and probably almost have to look out for the interest of the other party when they may not be looking out for their own interest because they want something so desperately. They're giving us the power to ask for whatever we want.
Mark: I feel like, if I could give you a soapbox right now and the procurement bible, I would put you on the soapbox in the middle of the street and give you the procurement bible to preach with. Because I feel exactly the same way. I think, so often we've got our matrix and we determine whether or not something's tactical, or strategic, or whether or not we're creating long-term partnerships. There's flaws in that thinking because, MRO, for example, like easy example. We think of purchasing gloves and safety glasses, or whatever it is as this tactical process. The discussion's really about price and, "Can you get it here faster and cheaper than everyone else?"
But, it is tactical? Is it tactical or can they provide more insight and more value to the organization than we're thinking about? When you think about moving from off the shelf selling to something that's maybe vending machine based, that totally changed the way that companies purchased MRO in reducing cost. That wasn't a tactical conversation. That was a strategic conversation. So often we get caught in the trap of thinking of suppliers as tactical, or strategic, or whatever it is, and not giving them the time that they need to be able to show the value that they can actually bring.
Phil: Okay. Well, because you've dismissed that. You've already decided that they don't have that or you don't care about, so you never even explore it.
Mark: Exactly. Exactly.
Phil: There's one other point to that as well. Maybe it's more counter-intuitive, but I was talking with a company a couple of weeks ago, and I actually have experience with another company who thinks like this from a client perspective. It's more relevant when you think of when you're selling something directly to the public, but every single interaction you have with somebody is either a consumer or a potential consumer. So what message do you want to send to that consumer or potential consumer about working with you? What your brand is like?
Again, that's something I never really thought about earlier in my career. That we're all stewards of our brands, and the way that we act with companies, even if it's companies where we're buying something that we think we say, "Oh, it's just a widget. It's just a screw. It's just something like that. I don't really need to treat them with respect, because they work for a company where I can just bring somebody else in tomorrow." But thinking about the responsibility that we have in terms of our company's brand, also, I think changes the way that you think and the way that you act, and the responsibility to your approach and the other conversations that you have with suppliers that you may have. Otherwise your'e thought as being not very value added, easy, commoditized product.
Mark: Totally agree. Let's switch gears a little bit. I'd love to hear what advice you would give to sales people about procurement people and how to approach procurement people.
Phil: Yeah. That's a really good one. I mean, I think at the end of the day we're all humans. I think we lose sight of that on both sides, that it's a human-to-human discussion, as opposed to a process. We often act robotically, we don't think of the human element that's involved. I would encourage sales professionals that you recognize that the procurement professionals, they have value to bring to a conversation. They can really be an advocate for you. They can also be in a position where they can make life difficult for you, and that's unfortunate, but I think dismissing the role of procurement is something that's dangerous for sales professionals. I've been involved with sales professionals who've done that.
But recognize that we're all trained to achieve, whether it's procurement, whether it's sales, whether it's the stakeholder who the desire to buy something. We're all trained to achieve the same thing, and that's to resolve a problem, to create an opportunity, and do it in a way that provides value for everybody that's involved in the process. I think that's really important to have that mindset.
Again, I think that often we don't think of it that way. We think of, "Oh, sales. They're trying to get around me."
Or, from a sales perspective, "Oh, procurement, they're just making my life difficult."
Let's all be a little bit more transparent and then we can figure out what the deal really is, and I think we can make things move a lot faster, more open and nice with each other.
Mark: Would you give the same advice to a procurement person about a sales person?
Phil: Yeah, absolutely. I think where I struggle, from a procurement perspective is where we try and own the process. It makes me shudder, thinking of RFP's. I'm not saying I'm immune from criticism of doing this, but where we create a barrier between the stakeholder and the supplier, everything has to run through us, because that just makes the process a longer process. They're going to find a way to talk, to communicate. We just may not know about it, and it just creates this element of combativeness. It just takes away the creativity from the process of identifying somebody who can solve a problem for us. So I definitely encourage procurement professionals who are kind of standing behind, you're putting up a barrier, to really think about, "Is that creating value? Or is that just being obstructive?"
Mark: Awesome. Well, I got to tell you Phil, having you on the show has been so awesome. For the listeners, just to give you some background information, trying to get Phil's schedule and my schedule aligned for this has been super-challenging, because both of us run podcasts, essentially, so we both have guests that we have to try and coordinate around. Phil runs his business and I run my business. I really appreciate the time that you put into this and the time that you spent with me on the show, Phil. Thank you so much.
Phil: Likewise, Mark, it's been a pleasure to join you and to be challenged on some of my thinking as well, because that's how we evolve and mature, and take on more of perspectives. I've had a great time. I really appreciate you inviting me on the show.
Mark: Absolutely. If people want to find out more about what you do, Phil, whether it be with Palambridge or The Art of Procurement, how do they find out more?
Phil: Sure, so it's pretty easy. The URL, do what they say on the 10. One of them is just artofprocurement.com. That's the podcast, that's artofprocurement.com. The second one is Palambridge and that's the subject-matter expert business. That's palambridge.com, P-A-L-A-M bridge.com.
Mark: Awesome. Again, thank you so much for coming on the show. For the listeners, I will be linking out to all of the resources that Phil talked about in the show notes, as usual, so you will be able to reach everything that you need to get in touch with Phil, whether it be through Palambridge or Art of Procurement, through those links. Phil, thanks so much for being here, again, and have a fantastic day.
Phil: Thank you. My pleasure Mark. Likewise.
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