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How to Increase Your Influence with Business Partners

Firms will make more savings if procurement staff learn to be more influential with business partners, and know when and how to say "no"

Representation of InfluenceSurveys of senior functional managers at the world’s midsized companies – those with revenues between $100 million and $1 billion – show that 73% of companies’ leadership teams expect to bring in more revenue this year than 2015 but 66% also expect rising costs.

This raises a healthy but difficult problem of finding ways to respond to all the growth opportunities without breaking the bank.

For procurement teams the answer is to build business influence. Heads of procurement increasingly want their teams to think and act “strategically,” and the best-laid strategic plans will not succeed if procurement staff say “yes” to every business partner request.

Although it may feel awkward or counter-intuitive, procurement teams will make better business partners if they, at times, push back, challenge, and help shape stakeholders’ thinking.

The Value of Influence

CEB data show that approximately 8% of savings promised by global sourcing initiatives can be lost because business partners don’t want to participate in spend agreements or because they believe those agreements are not in their best interest, and another 6% of savings promised can be lost because business partners refuse to comply with supplier contracts that are already in place.

A more influential procurement team will achieve as much as 4.4 times greater savings than those with less influence. These savings come from three main areas: more collaborative business partners will tend to make procurement aware of more savings opportunities; business partners that are more compliant with policies mean more savings are made once agreements are signed; and when procurement teams are included earlier in the sourcing process than they would have been, they can achieve better savings rates than if business partners are left to negotiate by themselves.

Three Ways to Increase Influence

Procurement staff will be more influential if the function helps them in three ways:

  • Helps them get involved earlier: If procurement staff are able to diagnose what business partners think about the function and their work, they can make sure that procurement projects align with business strategy. This will certainly help in getting business partners to throw their weight and influence behind Procurement’s work.

  • Promote the adoption of procurement policies in non-core categories: There are less of the typical procurement processes and protocols associated with non-core categories of spend, and procurement staff need to rely more on their influence to ensure business partners act in accordance with Procurement’s goals. Campaigns to support procurement staff’s work in non-core categories will help increase their influence markedly.

  • Transform the environment: Reduce the effort required for procurement staff to apply their influencing skills.

How to Say ‘No’ at the Right Time

The ideal procurement manager must not only be able to influence business partners but also challenge their thinking without seeming like they are forcing ideas from the outside. The profile of a trusted advisor is someone who:

  • Diagnoses business partner thinking: Pushes on the assumptions underlying the business strategy.

  • Understands the business’s problems: Comprehends the true root causes of business challenges.

  • Challenges business partners’ assumptions about value drivers and presents alternate assumptions: Reassesses business partners’ preconceived notions of success.

  • Provides a different point of view to business partners: Reframes business partner challenges when relevant.

  • Teaches business partners the impact of critical decisions: Provides strong analysis to support any business case.

  • Creates constructive tension between Procurement and the business: Generates healthy debate with business partners on critical decisions to pressure-test ideas.

 

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