3 Steps to Avoid the Procurement Knothole

Procurement KnotholeBuying decisions are not just logical. They are not just emotional. Buying decisions are an evolving combination of human need bubbles. When you are buying a car and you have been a long term BMW driver, what will it take for you to consider an Audi or a Cadillac? If you are a long time Chevy truck owner, what will it take to get you to look at a Ford?  If you have been a long term Toyota buyer, what will it take to get you to look at Kia? It’s logic and emotion.

When you are trying to sell a service, a similar combination of logical and emotional needs come into play.   To effectively deal with the procurement knothole, you have to understand that even though most questions you will be asked are “Consumer Reports” type questions, there are always underlying emotional issues that can influence and play some part in the decision making role.  You will be more effective if your client understands the impact and how to leverage your service, not just buy it.

In the process of trying to avoid the knothole effect of procurement, that is to say being squeezed through such a narrow qualifications tunnel, you have to think backwards from the way people make decisions.  Consider how your service effects their promotions, the greater good of their company, and what they are trying to do as an institution or corporation to compete.

3 Steps to Minimize the Impact of the “Procurement Knothole:”

1.  Before you even start the procurement process, take time to think through how much impact you can provide to your client by what your service does.  Can your service really impact the greater good of your client? Can you help your client compete more?  Can you help them deal more effectively with their stakeholders, employees or customers?

2.  Listen to what the client is really trying to accomplish when they engage their customers, when they try to honor their staff, when they try to involve their stakeholders.  It’s not a black and white assessment.  But understanding how they are going leverage your service, not just buy your service, is an issue in being effective in procurement.  Ask questions to gain more depth of understanding.

3.  When you connect with your clients, listen for their ability to think bigger. The ability to think bigger is the hallmark of a smart client, smarter leadership teams, and smarter boards. Don’t just think about how many times you have provided a certain service.  Think beyond how many emergency rooms you have done, how many business incubators you have designed or built, or how many management software systems you’ve provided.  The smarter top leadership teams and boa members are interested in the level of your understanding of their problems to compete in their marketplace and their vertical.  Smart clients weigh your understanding of their issues with the deliverables of your service in terms of how well are you be able help them today, a year from now, and five to ten years down the road?

Procurement Executives Balance Logic/Box Checking and Emotion/Leverage

The following quotes are from four procurement executives who spoke at a recent Inside Supply Management (ISM) International Annual Conference.  Notice that leadership on the procurement side also see that the procurement process as a balancing act between logic and box checking along with emotion and leverage.  Your job in effectively minimizing the impact of a procurement knothole is making sure you respond to both those “human needs.”

“Core analytical skills and the ability to manage change and thrive in an environment of ambiguity are critical in succeeding.  When faced with resistance, how do you work through that? Are you resilient? Are you able to drive change.  Are your expectations aligned with the company culture?” ~ Deborah K. Beavin, C.P.M., MBA, CPO for Humana Inc.

“An entrepreneurial spirit and problem-solving abilities is paramount — as is having a passion for discovering new business opportunities and involving others to help find solutions.” ~ Eric Germa, senior vice president and CPO for ANN, Inc.

“Regardless of your level in the organization, you must bring change and make people feel comfortable with change. From a skills perspective, critical thinking, interpersonal and leadership skills are vital.” ~Tim Fiore, CPSM, C.P.M., MCIPS, senior vice president, supply management, and CPO for ThyssenKrupp NA

“In the pharmaceutical industry, data analytics and using the information to drive decision-making are key for that sector. And having core skills such as negotiating is not enough unless they’re elevated to a strategic level. For example, pharmaceutical companies must deliver on products and solutions three to five years out. Thus, contracts must be negotiated appropriately in order to execute on those time horizons.  Self-awareness and alignment with company culture are vital as is an understanding of the full scope of the business and industry.   Procurement people must have “confident humility” — recognizing that you can’t be successful without other people.” ~Quentin Roach, CPO and senior vice president for Merck & Co.


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