A huge proportion of the business advice available is aimed at helping managers and employees at all levels up and down a company hierarchy put short-term considerations to one side and focus on more “strategic” (i.e., long-term) priorities.
This is because it’s far easier to work on projects and tasks that have an immediate, definable value (closing a sale or trimming costs before the end of the quarter, say) than it is to keep plugging away at something that might never be a success and, even if it were, might not be a success that can be clearly attributed to those working on it.
Making it Worse
But this is not the only problem. Managers will unintentionally contribute to this short-term focus by failing to match their words with action. In procurement, for example, a manager might sketch out a new priority for their team, such as to work on cost driver analysis, but all too often employees won’t then rearrange their work (i.e., figure out what they’ll stop doing) to give them adequate time for a new project. Or they might never find time to do it as more urgent and “tactical” work crowds their day.
In a lot of cases, it’s management’s fault if these objectives slip. Many procurement employees hear one thing from their managers when they are talking about strategic goals, but something else when it comes to the day-to-day implementation of that strategy. If managers don’t reinforce the broader strategic messages, staff are far more likely to work on the goals they hear about during the course of their daily work (see chart 1).
What’s more, incentives like raises and bonuses almost always reward procurement employees for hitting cost reduction targets. That carries a powerful message. Combined with everyday reinforcement of evergreen priorities like savings and speed, employees absorb the lesson that strategically important activities are nice-to-have extras rather than must-have urgencies.
Managers can avoid watering down their messages by creating a list of events that could cause focus to sway too much to the short term, and then adjusting their communications when those triggers set off “noise” that competes with the signals they transmit to their teams.
Chart 1: Long-term message, short-term support Source: CEB analysis
Making Time for Cost Driver Analysis
Procurement teams need to find new ways to support their company and improve their credibility with stakeholders, so it’s of vital importance that procurement teams start to investigate drivers of cost in more depth across more buys.
And to do this, procurement managers can’t spend time talking about the importance of cost analysis at this end of the year, spend many months discussing the importance of developing stronger relationships with suppliers, and then – near the end of the year – skew all the communication to pressuring staff to hit savings targets.
How to Keep the Communications on Course
Senior procurement staff should start by introducing the idea of “signal inconsistency” to mid-level managers. Then, brainstorm triggers that create uneven signals. Examples might include:
- A change in leadership.
- A merger.
- A deadline for regulatory compliance.
- A change in workload.
After that, create a short list of questions to use during discussions when one of these events takes place. Examples include:
- Who do we anticipate is most likely to send divergent signals?
- What type of divergent signal do we think will be sent?
- What will that make staff do?
- What preventative measures will we take?
Teams should also remember to regularly update the list of potential trigger events; for instance, they might hold annual or quarterly sessions to add to or remove items from the list.
Finally, consider asking staff for their feedback directly. Poll them about the consistency of the signals being sent out by the management team to make sure they’re clear on what the priorities are.