When Ross Perot was on the board of directors of General Motors, he was up on the 14th floor of GM headquarters, along with all the other executives. That floor had everything executives could want. They were called “Executive Suites”. The executive restaurant on the 14th floor was The London Chop House, one of the fanciest restaurants in Detroit. The only reason execs ever had to leave the posh 14th floor was to get to their car.
Power and authority emanated from the 14th floor in militant fashion. Decisions were made in that floor and executed by everyone else who worked elsewhere in the company. GM executives lived in an ivory tower.
Predictably, executives were disconnected from the business, and business suffered. Ross Perot did something unique however. He would go down to the manufacturing floor regularly, and talk to the blue collar laborer with grease covered hands who was making $10/hour to find out what GM could do to be more competitive in manufacturing.
Sometimes the ones who are closest to the problem have the greatest insight, regardless of pay grade.
Perot solved many problems by the simple act of ditching the ivory tower and being connected to the business and the people who are doing the work. Like him or hate him, the man was onto something. And purchasing professionals better pay attention.
If you are a purchasing leader in a centralized purchasing function, then you run the risk of sitting on the 14th floor of an ivory tower. And make no mistake about it, just because you don’t have fancy restaurants and offices all to yourself doesn’t mean this doesn’t apply to you. The ivory tower is all about how you engage with your own company and how you exercise influence to get things done.
Consider some of the following questions:
1. Are you telling people why they need to use purchasing because it’s company policy or are you creating value and letting them come to you on their own volition?
2. Are you gaining deep insight about your end user organizations so you really understand their business and can engage in design for TCO discussions in their language, WAY before SOW/Specs are ever put together?
3. Do you recognize that there are no such thing as difficult business units, there are just business units that have constraints and requirements that make things difficult, and it’s your challenge and your opportunity to engage in a way that understands these challenges and collaboratively tackle them?
4. Are you telling your suppliers what to do and how, or do you know how to harness supplier knowledge and innovation by recognizing that the best suppliers understand how to solve your problems better than you, because they get to watch and learn from hundreds of customers try to solve the same problems while you are in a silo? Don’t forget: there is more to learn from failures than from success. Suppliers have seen it all.
5. Are your individual purchasing organizations following your lead because they have to or because they want to?
6. Do you have purchasing ambassadors – emphatic carriers of your vision – all over the company, or are all the ambassadors on the 14th floor, beating the drum from high above?
7. Do you collocate key purchasing personnel with mission critical internal customer, partner, and engineering/R&D/Design groups, or do you place more value on your organization all sitting together, because it is clean and convenient for your organization?
8. Do you have a “bottoms up” innovation process in your organization, whereby a low level buyer in any location of your company can have their best known methods introduced and standardized where there is merit – or must corporate purchasing define and roll out such practices from the 14th floor?
9. Is your collective organization viewed as a strategic enabler, a source of corporate competitive advantage, and a value added center of profit? Or is your job to be invisible to executives, because if they are talking about purchasing, it means something went wrong?
10. Are your purchasing leaders expert coalition builders and bridge builders with the rest of the organization, moving mountains inside the company and achieving strategic corporate objectives through influence and not through authority?
We’ve got our work cut out for us as purchasing leaders of today and tomorrow. Transformational leadership entails working with organizations – including your own – in ways that builds value, trust, respect, and confidence.
If you think being the best at purchasing and supply chain management is the Holy Grail, you are wrong. There are plenty of geniuses out there that failed not because their ideas were wrong, but because they didn’t know how to influence.
Make this transition as a purchasing and supply chain management leader and help make our profession grow and prosper. We’ve worked too hard and come too far to let our efforts stifle. Sell that ivory tower, and go make it happen.
Be your best!
“The Godfather of Negotiations” ~ Intel Corp
P.S. A message to Chief Purchasing Officers!
Enable your workforce to have premier access to the online CPSCM™ BATCH 2020 program, whereby they can have access to 30 hours of certification training, where registrants can see the materials and hear my voice – “THE Godfather of Negotiation Planning” – as their own personal instructor throughout.
Get your employees on the same page and have new hires get easily boarded and aligned with this world-class program.
I invite you to join the Fortune 500 elite who are already transforming their procurement departments from overhead & support centers into VALUE ADDED CENTERS OF PROFIT using the CPSCM™ certification. Enroll now for the BATCH 2020 that will be Live on Your Screens! Learn more