Although we’ve already written much on dividing procurement departments into tactical and strategic teams, it is worth discussing other potential ways to slice the procurement activity pie.
In most procurement departments that are split into tactical and strategic teams, the tactical work includes order placement, expediting, and resolving day-to-day issues. And the strategic work includes sourcing, negotiation, and supplier management.
As procurement has continued to mature and better talent has been comprising a higher percentage of our profession’s workforce, strategic sourcing and challenging negotiations aren’t reserved for only the top handful of performers in a procurement department. Almost everyone who occupies a professional procurement role does these things. And the available procurement training and technology enables these people to do a good job at it.
However, strategic sourcing and negotiation still can’t be classified as “tactical” on the same level as cutting PO’s.
But collaborating with suppliers and creating value from supplier relationships is even further from tactical purchasing. So, should we reevaluate how procurement departments are divided? And, if so, how might we divide them?
Well, let’s take a look at how some sales organizations divide themselves.
Sales organizations can be divided in multiple ways. One common way is by geography: all sales reps do the same job, just for different customers in different regions.
However, an alternative division – or a subdivision of that existing division – is where a sales organization is divided into two groups: “hunters” and “farmers.” The hunters are those that approach potential new customers, negotiate with them, and ultimately close deals with them. The farmers don’t do that. They take over accounts won by the hunters, maintain the relationships, make sure customer needs are met, and aim to gain and grow recurring business.
Why does this split make sense?
Well, it takes different skill sets to perform each role. And it takes different personalities for each role – personalities that are perfect for one role are poor for the other.
Hunters love the feeling of “winning.” It’s a feeling that is addicting and drives hunters to recapture that feeling as often as possible. It motivates them to be the first one to arrive at the office, be the last one to leave the office, and make more phone calls than any of their peers. Because they “exist to win,” the farming role isn’t exciting to them. And that lack of excitement usually means that they won’t voluntarily spend their time farming.
But farming is needed. And good farmers have the perfect personality for that role. They know how to relate well to people. They are able to have conversations that both parties enjoy. And they are good at making sure things don’t fall through the proverbial cracks. But they just don’t have the fire in their bellies to pound the phones and tirelessly chase new business, which they can find demoralizing when it doesn’t go well.
The hunter/farmer division works great in sales. It leverages personality types.
Could a hunter/farmer division work equally well in procurement?
I think so.
Tenacious procurement negotiation requires a different personality than leading a mutual cost reduction project with a supplier. As more procurement organizations discover how they can create value beyond traditional sourcing and negotiation applications, a new personality type will be in increasing demand in procurement.
I know that some procurement organizations are already splitting activity in a hunter/farmer type of approach, though they aren’t calling it that. And I think that any procurement transformation going forward should consider leveraging this alternative approach to dividing procurement responsibilities.