By Andy Beth Miller
Louis V. Gerstner, Jr., the former CEO of IBM, knows the importance of corporate culture. In fact, according to Gerstner, it’s where the game of success is won or lost.
Gerstner stated, “Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success — along with vision, strategy, marketing, financials, and the like…I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”
We can all read this inspirational quote and think to ourselves…Great! Sign me up! I want in that game! However, we’ll quickly realize that we are just one player, and in order to win, which according to Gerstner means creating value, we must have a winning team by our side and a fearless and motivated coach leading the way.
Enter Matt Anders, Executive Director of Technology Sourcing at AT&T Warner Media, who graciously sat down with us and walked us through some fundamentals of how to create a successful procurement-minded corporate culture, while also giving us an inside look at his playbook, which details just what your ensemble team needs to do in order to get in the game, stay in the game, and ultimately, win.
I decided to start off by asking about the basics, and simply asked Anders to, in a nutshell, break down what a “procurement-minded corporate culture” is exactly. He graciously obliged, echoing Gerstner’s thoughts, and it all points back to value. “A ‘procurement-minded corporate culture’ is one where each and everytransaction is done with thoughtful consideration of the value brought by the supplier,” he shared.
Now, this may sound simple enough, but Anders quickly points to a common pitfall that often trips up corporations, sidelining them from connecting with the touchdown zone of optimum value products because they get stuck in the comfort zone. “Too often, corporations either find themselves buying from certain suppliers out of habit, or get caught up in rigid procurement processes that become a bit mindless,” Anders explained.
In this case, the path of least resistance is not necessarily the right route to take. And, the more we talk, the more it seems that the road to achieving a thriving and successful procurement-centered culture is not only narrow, but it can be quite tricky to navigate. Anders quickly shares another useful piece of advice, this time, regarding the maximization of ROIs, which in this analogy, can be seen as getting the most mileage out of every gallon of fuel you’re purchasing and putting in your car. “Every business has capital constraints, and third-party spend will consume a large portion of those finite resources. In order to thrive and grow, they need to maximize the return on the money they spend.”
Anders already has me thoroughly convinced, and I’m ready to jump in, but like any coach worth his salt, Anders keeps me on the sidelines a little longer in order to make sure I’m familiar with the rules of thegame and am armed with the fundamentals before just throwing me into the mix with the big boys.
So, as he opens his top secret playbook, I prepare to have my mind blown by the clear and concise instructions offered therein, and as he goes through each one, step-by-step, I’m already envisioning outrunning, outmaneuvering, and outscoring all of my opponents
ANDERS’ PLAYBOOK HIGHLIGHT REEL:
- – Disassociate Procurement performance metrics from department budgets. Aligning these two creates friction and drives disengagement.
- – Assign each supplier to a category; Strategic, Preferred, or Transactional. This exercise alone will generate valuable discussion.
- – Include Procurement in the earliest stages of the departmental budgeting process. This will help to determine and achieve collaboratively established goals.
Speaking of collaboration, I ask Anders how he would go about establishing better connectivity between procurement and the larger corporation, as well as interdepartmentally. He wisely points to tackling the issue of perception as a means to paving the way for better cohesion and unity. “It’s important to position procurement as consultants and trusted advisors, not ‘the spend police’ or RFP administrators.”
When questioned as to how best to go about this, Anders keeps it simple, pointing everything right back to a key point, the team. “Staff your procurement organization with a varied portfolio of skill sets that include sales/consultancy capabilities in addition to standard project management and procurement process skills,” he shared. Anders immediately followed that up with a key tip for how to keep things fun, sustainable, and fresh. “If you don’t have a passion for procurement and for the Categories you are managing, you never will. Passion is infectious.”
”I spent a lot of years early in my career on the other side of the desk, in sales, so interactions with procurement professionals were always educational and made me a better salesman.
As we had stumbled on the subject matter of infectious things, I couldn’t help but wonder just when, and how, procurement got under Anders’ skin. So, I asked Anders what first got him interested in procurement, and most importantly, what holds his interest now?
“I spent a lot of years early in my career on the other side of the desk, in sales, so interactions with procurement professionals were always educational and made me a better salesman. I was fascinated by the dark magic they seemingly used to keep me on my toes,” he explained.
As for now? “Today, professionally, I most enjoy looking ahead to what ‘next generation’ procurement can and should be.” As for what that might look like, Anders explained with an open-ended call to action, “The definition of what a mature, world class procurement organization looks like needs to constantly evolve.”
So, basically, we must adapt or die. And part of this adaptation process, according to Anders, involves asking ourselves the hard questions. Anders explained, “Many procurement organizations take pride in factoring Total Cost of Ownership into their analysis rather than simple list price and discount, which is a good thing. But, how many can, with equal skill, articulate the Total Benefit of Ownership? Specifically, answering questions like, Why is the business spending the money it is spending, and what is the total return? If you can’t answer these fundamental questions, you are not being a truly effective partner to your stakeholders.”
Dr. Aubrey Daniels, Founder of ADI, once stated, “We can change culture if we change behavior,” and now, thanks to Anders’ playbook for success, we have a clear game plan.