Don’t Stop Believin’ in Procurement Basics

In this head-banging episode, your favorite procurement rockstars break down why nailing the basics is your ticket to procurement stardom. Join Zach, Natasha, and Conrad as they riff on stakeholder mapping, data visibility, and why chasing the latest tech won’t save you if your fundamentals aren’t solid. Get ready to rock the essentials to make your procurement function a chart-topper!

Featuring:

1. The ultimate stakeholder mapping power ballad
2. A killer three-dimensional segmentation solog
3. Your backstage pass to procurement maturity

Time to stop chasing silver bullets and start believing in the basics that make your procurement truly rock!

Watch now or read the transcript below.

Transcript: Proc-N-Roll 09 | Don’t Stop Believin’ in Procurement Basics

Zachary | Should I kick us off?

Conrad | Rock and roll, baby.

Zach | Rock and roll. Welcome to rock and roll, your guides of practical procurement where we make procurement rock and roll. I’m with Natasha, the pro CPO, Conrad, the innovator, and I’m Zach, your expert on procurement. We join you with almost 70 years of practical procurement experience. I hope you’ve been enjoying the episodes so far. Today’s a good one. Today we’re jumping into one of our top predictions for 2025, which we said was getting the basics right. We thought it would be good to have an episode just to discuss what we mean by getting the basics right. All over the world, procurement teams are being asked to do more with less while dealing with technological disruption. Natasha, you talked about it really well in the last episode. You talked about how you’re observing procurement teams chasing advanced tech and looking for some kind of silver bullet, but still they’re quite at a low level of procurement maturity at the abacus level, as you put it. So we’re going to dive into this today. What are the procurement basics? Why are teams getting them wrong? And what are the practical strategies to address them? So I’ll kick us off with Natasha. First of all, what are the basics? Natasha, what would you say is the most basic thing procurement leaders should be doing?

Natasha |  Good morning, good day, good afternoon, good evening, everyone, whoever is listening. What are the procurement basics? I think one of the most important ones and the fundamental or foundational one is alignment with business objectives. We procurement people are very passionate about our field. We often lead with the importance of savings because it fuels growth or importance of category strategy because it paves the way for our stakeholders to get the newest market intelligence. Or we’re leading with the importance of reducing supplier base because it will reduce operational expenses of supplier management. But that all may be a moot point for a CFO who is preoccupied with innovation, with growth, with cost of capital, and with profitability. It may not strike the right accord with the CEO who is interested in geographic expansion, in increasing customer retention, and in expanding product lines. So I think one of the first fundamental basics that we have to remember is how do we align our business objectives with the company’s objectives? And how do we know exactly what’s a driving factor for company growth? We need to start losing our attachment to procurement terminology. How do we switch from functional mindset to the enterprise mindset? And how do we start building our aspirations not just based on what we as a function should deliver to the company, but also what the company really needs at this given point of time.

Zach |  So where are procurement teams going wrong then, Natasha? You’re talking about the functional mindset move to an enterprise mindset and that we need to get out of using all the procurement terminology. So what in your experience are procurement teams doing wrong, procurement leaders doing wrong when it comes to this particular basic?

Natasha | One of them is lack of stakeholder engagement. Let’s be practical about it. Let’s leave our listeners or viewers with a practical example. There’s a tool that I’ve used for many years in the past that worked very well for me. It’s called Stakeholder Map. And Stakeholder Map outlines how we are connected. If I take marketing as a team that we need to build relationships with – as a procurement leader, it’s important for me to ensure that we have an ongoing communication cadence with all the key stakeholders. If you look at the map, it’s structured as a work chart. At the top of the stakeholder, we have chief marketing officer who has two first lieutenants, VP of media and VP of creative, who under them have senior directors responsible for integrated media, marketing operations, communication design, and production. First we outline all types of stakeholders that we’re working with and the hierarchy of those stakeholders. Then if you pay attention to how the boxes are framed, they are in color. Green color indicates perfect relationships. It’s a love fest. We are working with them very organically. There’s great synergy. Communication happens naturally. We’re on the same page, our strategies are aligned. So green’s a thumbs up, this is what we’re thriving for. Gray is maybe a person is new to the organization or new to the role or just learning the field or maybe procurement manager is new. Gray doesn’t indicate trouble. It indicates that we just need to build connection. We just need to spend more time together and get to know each other better. Orange indicates that we need to pay attention and work on building the connection, building communication, building better understanding of each other’s priorities.

Conrad | Natasha, this is a really cool map. I noticed that it’s focused on a category. When you’ve worked with your team on this, you build this or you build it together and then each of your category leads map out to the organization keep this up to date? How do you actually put this into action within your organization?

Natasha |  Being a lead for the procurement organization, I suggest that we build this map and then it’s a responsibility of my direct reports to have it as one organic illustrative document, built up by the managers and directors of the procurement team. This map is usually shared with the stakeholders as part of the category strategy review saying that are we working with the right people? Are we indicating the health of the relationships in the right color? Would you agree that we’re gray? Would you agree that we’re orange? It also helps to open the doors to start the conversation about what do we need to fix about our relationships? Why are we missing each other by a mile? Or maybe we’re just missing each other by a yard. And if so, maybe we’re much closer. I think it serves as a healthy baseline on who are we working with? What’s the health of our relationships? And also, as you see in the bottom underneath the name, underneath the position, it says, for example, CMO meets quarterly, VP meets semi-annually. That also indicates frequency of interaction. And it prepares both sides that we’re not going to be seeing each other on an ongoing basis, for example, as it would be with managers, because they will be meeting regularly. So for them, there’s no need to define the cadence. But maybe for the higher level within organizations, it is necessary to indicate that we will have enough experiences to share and information to deliver for us to meet regularly on monthly, quarterly or semi-annual basis.

Conrad |  This could be a really useful tool for the one-on-ones with my direct reports as well. Just to assess how they’re doing, how those connections are going, and when’s the last time you met with them. Obviously, you could spend an entire one-on-one just talking through the details behind the boxes. But this is really cool. Thank you for sharing it

Zach | I agree. This is probably the best stakeholder map I’ve seen in terms of how it lays things out, the color coding, and it gives you a lot of information in one place. And I think it facilitates a great conversation with your team around the relationships. So it’s a great exercise to do. And maybe we’re following up every quarter, every six months to see how the relationships are progressing. Do you then just trust that the relationships, if they’re good, they will just feed into the category strategies and the overall procurement strategy, or do you have to do something more deliberate to help you? Did you need to do more to align with the business strategy? Is it just the case of you have to have a strong relationship and the rest will work itself out?

Natasha | Strong relationships don’t happen on their own. Strong relationships are the result of both sides putting concerted and focused efforts and bringing their subject matter expertise and bringing their goodwill and trust and maybe a little bit of willingness to take the risk. Because you can have perfect relationships, but if I don’t know my business, you will gladly invite me for coffee, but you probably won’t invite me to proc and roll. So we all have to bring our subject matter expertise, our mindfulness, our trust, our desire to do good. It’s work, but not all aspects of work have to be challenging. They just have to be mindful.

Zach | I think it’s also an understanding of the financial plumbing in the business. Ultimately, procurement is responsible for certain scope of expenditure. But do you know how the money is flowing from an expenses point of view? All the different channels that money goes out from the business to pay for services and products. And are you bringing that all into the scope? Are you addressing it strategically, holistically? I think that’s also potentially basic, just understanding what those channels are and where people stand.

Natasha | When you say, do you know where the money goes to? It depends who is you. Only very high maturity organizations, the finance organization knows exactly where the money goes to, or the extent of it, or they understand the duplication and redundancy of services that they utilize from the same providers where they pay the same thing. Having 57 contracts with the same hotel chain or having 20 different agreements with them because each company’s entity or geographic representation have their own contractual agreement. It is the role of procurement to create this visibility in a very digestible format and say, this is where money goes. And there was not a single time when someone in the room would not say, I had no idea. Not necessarily about how much, but if there’s a duplication, if there’s an efficiency, if there’s redundancy, or how much is spent on something that historically being considered very small spend because it’s not business critical category, but in reality, even though it doesn’t represent the core function of the company, the spend is quite significant.

Conrad |  That same mindfulness needs to be applied with the risk teams. Because the risk teams, I mean, a less mature partnership with legal takes you to a place where you’re doing all these contracts that don’t bring value or mitigate risk or anything for the company. But on the risk side, I often see the same thing where organizations are trying to peanut butter this risk strategy across every type of supplier and every type of spend in every region. And really that’s where the segmentation is so powerful. Visibility to what’s going on and then go figure out how to segment it so that you can focus on what matters most. If you can’t look at yourself in the mirror and say, we went through this exercise, we now understand and we’re focused on what matters most, then I think that you’ve missed one of the most important basics here.

Zach |  I feel like we’re touching on the edges of the topic of a service taxonomy. Third party risk management functions usually look at it through that lens as opposed to a supplier or a category. It’s like, what is the service that I’m buying and what are the risks associated with that service? That’s probably for another episode.

Natasha | I’d start with does the procurement strategy exist? As I am working with the CFOs of various companies, I ask them, how strong is your procurement strategy? And their response sometimes is we have procurement strategy. And I often joined organizations that didn’t have procurement strategy. That would be the first indicator and whether it had been presented to and aligned with the C-suite. If it had been funded, it means that organizations support procurement strategy and procurement development. To me, that’s foundational, it’s a fundamental step. From an organizational perspective, there’s certain spend under management that procurement has to process. And does the procurement team have the right number of people and the right skill set to effectively process that spend? Because the absence of the right skill set will not allow procurement to gel organically with the stakeholders.

Conrad | It’s interesting because as you’re going through this list, I’m thinking about the maturity assessment from a slightly different lens, which is the result. You can look at it and say, let’s measure the results. I posted on LinkedIn just the other day about this. The origin of that is Maslow’s hierarchy of needs. What does the business need from me, and where am I executing? That took me down over years now, this thought of transaction management at the basics. Are you doing that? Are you doing it well? How does that score? Am I doing RFPs in the business? Basic negotiations. Strategic sourcing, what does my spend look like? And I’m going out and I’m executing at a strategic sourcing level. You can argue about the stack and what you would prioritize in value, but you start moving up this value ladder from the transaction to basic negotiations to sourcing to supplier management. Now you have a supplier and you’re actually driving to a high level of value. Maybe category management and supplier management are similar in place, but now you’re getting this really strategic category management approach. And at the very top of that pyramid, you end up with this – you’re actually involved in design and consumption discussions with the business.

Zach | Absolutely. It’s a great way to get that baseline and then you can build from that point onwards. I think we’ve covered a few basics today, which I think are right on the money. Like you said, Natasha, aligning procurement with the organizational objectives and strategy, getting holistic visibility into your procurement operations and making sure you keep a tab on your maturity assessment. Think take action today if you’re listening. Block time on your calendar to do a self-assessment of your procurement maturity and use those findings to prioritize that you can invest and improve in the month and quarters ahead. And that might lead you to a full transformation or a series of 1% improvements that will add up to more meaningful progress over time. As Natasha’s friends at Nike would say, just do it. Thank you, Conrad and Natasha.

Conrad | Absolutely.

Zach | Thank you, our listeners, and see you in the next episode.

This transcript has been edited for clarity while maintaining all substantive content