Because my previous procurement parables about Ryan (the recently graduated buyer who sabotaged his own pending promotion) and Luke (the Chief Procurement Officer who figured out why his procurement department had such a bad turnover problem) were among the most widely read blog posts I’ve created, I’ll share another procurement parable with you today.
The setting for today’s parable is Milky Way University, MWU for short.From an academic standpoint, MWU is a progressive school with its name associated with the most prestigious degrees in biotechnology, systems design, and mechanical engineering.
However, from a procurement standpoint, MWU is by no means associated with anything the least bit progressive. Whether it be their paper-intensive processes, staff who could barely qualify to be janitors at other places of employment, or the fact that the school was recently under investigation for suspected bid rigging in a project that involved a federal grant, MWU’s procurement department was an embarrassment to its leadership.
That had to change. So, MWU’s Chancellor replaced the incumbent Procurement Director with the then-current Internal Audit Director, Mark D’Eagle. Mark was charged with transforming the procurement department into one that at least had it together as much as the other colleges and universities in town. Those other colleges and universities didn’t exactly have world-class procurement organizations, but at least they weren’t the veritable circus that MWU’s procurement department was.
Mark was up for the task.He loved challenges.Plus, he got a $10,000 raise by taking the job, so “What the heck – why not?” he thought when making his decision to accept the position.
Mark did worry that he knew absolutely nothing about procurement, but the Chancellor gave him the green light to bring in one additional procurement manager this year and another one next year while also adding some buyer positions. He could build a team that knew about procurement and he could direct his attention to staffing, leadership, and organizational transformation.
As Mark strategized on how to lead this transformation, he had one predominant thought: the procurement manager he hired in the first year would be the key component in this transformation. Having someone who knows exactly the best practices that high-performing procurement departments use would be exactly what the proverbial doctor ordered for taking MWU’s procurement function from embarrassment to valued service.
Mark scoured resume after resume and interviewed candidate after candidate.Finally, he came to the conclusion that a candidate named Lauren Conwitt was the perfect choice.
Lauren had held purchasing jobs with three different Fortune 500 companies. Currently, Lauren was the purchasing manager for a well-known consumer goods manufacturer, but she was leaving her job which was being relocated due to a merger.
Lauren’s resume showcased her involvement in many impressive purchasing projects. For her last employer alone, Lauren was a key member of teams that successfully implemented supply risk mitigation strategies, sourcing optimization technology, and a supplier consolidation project that saved her employer $100 million. Lauren certainly knew how world-class procurement worked. Heck, if MWU did 10% of what Lauren’s current employer did, the procurement department would be heroic in the Chancellor’s eyes!
So, Mark hired Lauren and the transformation was under way. Right out of the gate, Lauren impressed not only Mark but the Chancellor himself with all of her ideas. Not only did Lauren have suggestions for fixing all of MWU’s procurement problems, but she was introducing valuable-sounding concepts that Mark and the Chancellor had never even heard of before. Lauren was viewed as the type of executive that magazines write about.
The acquisition of Lauren’s brilliant mind and professional demeanor could only spell success for MWU procurement. Mark thought that getting out of the mess MWU’s procurement department was in was virtually guaranteed.
But was it?
It seemed that way at first when Lauren suggested her first three initiatives: implementing a spend analysis system to learn where MWU is spending its money, internally training the procurement staff in order to give the capabilities necessary for better performance, and issuing requests for proposal (RFP’s) for the top five spend categories in order to drive cost savings. But, as things played out over the next six months, the “guarantee” of improvement started to seem more like a “probability” before starting to seem like a mere “possibility.”
So, what happened over those six months?
The spend analysis project? Lauren’s previous company had used and been happy with one of the most well-known spend analysis software providers out there after doing a thorough evaluation of all six best-of-breed vendors competing at that time. But that was a year-and-a-half ago. Since then, two new vendors entered the marketplace and Lauren insisted on getting to know them before making a decision. She interviewed them, participated in online demos they did, and read blog posts about them but said that she still needed more time to think about the vendors in the marketplace before deciding who could bid on MWU’s project.
The internal training project? Instead of considering existing procurement training and certifications that were already available, Lauren convinced MWU to develop its own certification program based upon material that she would develop. Unfortunately, Lauren only developed about two pages of written content and five PowerPoint slides before she “hit the wall” and couldn’t come up with anything until “she had a little more quiet time” to concentrate on creating the material.
And the RFP’s for the top five spend categories? Lauren hadn’t even started work on this project yet. She initially mapped out a plan where she would create RFP and contract templates, create a flow chart for a standardized sourcing process, and introduce a total cost of ownership-based supplier comparison process, but the ball was rolling on exactly none of those things.
As more tension was building in MWU about the procurement problems that continued to persist, Mark was worried. By now, he expected to see some turnaround. After all, with as bad as MWU procurement was, it should be pretty easy to fix something, right?
The Chancellor was able to settle Mark’s nerves a bit. He cautioned Mark not to panic, reminding him that Lauren had only been on board six months and that “Rome wasn’t built in a day.” Mark was happy to have management support. But his fears only grew in the next few months.
By the nine-month mark of Lauren’s tenure with MWU, not much had changed. Sure, she finished researching the two new entrants in the spend analysis technology space. But she still hadn’t obtained pricing from any vendors. The internal training project still had gone nowhere. Three more months had passed and only one more PowerPoint slide was added to Lauren’s presentation. And the project involving RFP’s for the top five spend categories still hadn’t had a single task started.
Oh, it wasn’t as if Lauren was twiddling her thumbs or heading home early. She spent 55 hours in the office each week. And she had developed proposals – and received permission – for initiating two more projects, one involving reorganization of the procurement department into tactical and strategic teams and one that would have MWU using a group purchasing organization for office supplies and janitorial products. Yet, despite the great ideas and the well-written project proposals Lauren wrote, no tangible progress was being made.
Mark tried to stay patient. But his desire to stay patient fell victim to his desire to actually accomplish something one day when Lauren dropped by his office.
After knocking on his door, Lauren said “Hi, Mark. Hey, I wanted to see what you thought about this idea. If we do reverse auctions for one-time buys like we did at my old company, we could probably save about 12% on each purchase compared to traditional bidding and negotiation. I could get the top reverse auction providers to come in and give us demos of their solutions and then we could try to decide what features were most important to us and then we can figure out which providers offer those features and then…”
Mark interrupted with perhaps the most epic of tirades ever witnessed in a procurement department.
“Lauren! Can you please just stop? Stop! You know, I brought you in because you were involved with some major process improvements in your career. Those were real changes that happened. But here? You come up with all of these great ideas. But nothing ever gets done! Hell, some things don’t even get started! I give you lots of say into what you have the opportunity to work on. But, instead of running with those projects, you over-analyze and procrastinate and get distracted. We are no better off than we were nine months ago. You don’t execute! You. Don’t. Execute. And that’s a big-time problem! We need results, not plans.”
Lauren disagreed, saying “OK, Mark. I can tell you’re mad. Why don’t we spend the rest of this week listing all of the issues we both have? Then, late next week, we can have a meeting and flesh out all of the issues. By Monday of the following week, we’ll have a plan and…”
“Lauren, I’ve heard enough!” Mark yelled, practically spitting the words from his lips. “I’ve watched you every day. And your heart is in the right place. You’re a smart person. But when it comes to actually making things happen, you don’t make things happen. This is obviously how you are as a human being. Nothing is going to change overnight. I ran into a former coworker of yours at the Chamber of Commerce luncheon last week. We started talking about you and he volunteered that all of those things your former employer accomplished was because other people did the work. You came up with ideas, but other people actually turned ideas into reality. Lauren, I need more than that. I need execution. I need results. Lauren, you’re fired.”
The moral of the story:Execution isn’t necessarily the most important thing but, without execution, you have absolutely nothing.
Do you execute? Or do you just come up with good ideas that go nowhere? It doesn’t matter how many hours you work, what great ideas you have, or how smart and professional you are. If you can’t bring a project to its successful completion and you spend more time talking about things you will do than actually doing things, you can be perceived as a failure.
I hope that this parable inspires you to action, results, and success!
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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