For most people, there is often a lament with any change that it never comes easily. Whether it is because of comfort with the familiar or fear of the unknown, there is always a natural, almost reflex hesitation to embrace a new idea or way of doing things.
It can be especially challenging for organizations that have been around for a long while. If you have ever read Jim Collins’ book Good to Great, you will almost immediately get the drift of what we are saying.
In talking with Ace Hardware’s Senior Manager – Corporate Procurement, Fraz Baig one is immediately “struck” by the confident energy with which he speaks about the emergence of a new procurement mindset. Specifically, stepping beyond the traditional role in which a “buyers” contribution was “measured” by cost savings and cost avoidance.
Instead, he talks about the need for procurement professionals to become more collaborative with a focus on being in contributing alignment with the executive vision.
There is almost an unsettling excitement listening to Baig speak with such certainty, especially since he works for what many consider to be a venerable retail brand that first came into existence as Ace Stores in 1924. Perhaps this is one of the main reasons why Ace’s indirect procurement group – which came into existence 7 to 8 short years ago is quickly becoming the model to emulate in the emerging digital age.
The Right Stuff
A recent industry survey reports that 83 per cent of organizations have had trouble recruiting suitable candidates in the past 12 months. While several factors contribute to this significant challenge, candidates not having the necessary work experience, or the right skills were two of the top three.
Regarding this article, these reasons are notable because Baig spoke about them – but not in a way that you would expect.
While Ace, like every other company, had difficulty in finding the right people, it was not because the candidates lacked experience in the traditional sense. Most were in the industry for some time. What they lacked was the right kind of experience that goes beyond the number of years in the profession in which soft skills versus functional skills are important.
In other words, and as Baig put it, procurement needs to be a collaborative driving force in achieving organizational objectives versus being simply a single, functional step or cog in an overall process.
However, to get to that point, you need the right people with the right experience or “right stuff.”
The Alignment Within
Of course, finding and hiring the right people is the first step, not the only step. And it is in taking this next step that Ace excels.
Beyond differentiating categories of spend, which include IT, retail, market and supply chain, Baig focuses on aligning the soft skills of individual team members with the right category.
For example, the individual who looks after marketing requires a creative touch to fully understand and appreciate the various requirements across different category elements be it television, print or social media. It isn’t just about having the functional know-how, as Baig explains it but possessing a level of artistic insight or sensitivity that helps to facilitate greater collaboration towards achieving an optimal outcome. This sensitivity is the soft skill to which he was referring.
Becoming relational versus transactional
In her bestselling book Vested: How P&G, McDonald’s, and Microsoft Are Redefining Winning In Business Relationships, Kate Vitasek talks about the “importance of transparency and collaboration between stakeholders involved in the procurement process.”
In this context, Vitasek stresses that procurement must proactively and effectively engage and work with stakeholders both within and external to the organization to achieve a mutually beneficial outcome. As a result, procurement leaders need to have a relational mindset and be able to articulate this new vision throughout the entire department.
Based on the success of Ace Hardware’s procurement team Baig and the company’s leadership not only get the message, they are “leading” with it.