Procurement teams have made scant progress in their recent efforts to deploy staff in a way that makes the most of their skills, and makes the function more “strategic.”
And new data show that the problem persists in many of the world’s procurement teams. For example, only 23% of procurement managers say their competency models and role descriptions are sufficient for guiding decisions about staff assignments, and just 31% of procurement managers delegate work to employees based on their strengths and aspirations.
It’s a problem Procurement can’t ignore. As the function’s role in the business changes, Procurement needs these new strategic skills to succeed. What’s more, this change helps with Procurement’s core goal of savings: employees with strategic capabilities generate nearly six times as much savings as staff with only a tactical focus.
Yet only a fifth of procurement staff (21%) work in teams which have all of the six competencies needed for this strategic approach. So it’s clear that many functions have a long way to go — and they need to start at the most basic level to progress.
Procurement executives should first understand where their employees’ strengths and weaknesses lie, and then assess how fully developed those strengths and weaknesses are. Once they have done that, they can assemble complementary teams, where staff skilled in certain important areas —like innovation or influence — can help to amplify the capabilities of their colleagues.
All Six Competencies Lead to Strategic Success
Procurement teams need a mix of all six competencies to make the shift to become more strategic (see chart 1). And then senior managers can use their knowledge of their employees’ strengths to place them in the roles that suit them best, making sure they have someone skilled at each competency on their team. They can also base development plans on these results.
The payoff for all this work is that when procurement employees are in teams where they can make use of their individual strengths, they are almost twice as likely to demonstrate strategic performance as those who are not.
Chart 1: The six competencies of procurement Source: CEB analysis