The morning of the Singapore Forum kicked off with fascinating talks on procurement transformation.
The morning of the Singapore Forum kicked off with fascinating talks on procurement transformation.
Interestingly, both talks described their use of John Kotter’s work, whose 1995 paper found than 80% of transformation. From this, Kotter deduced eight steps which characterised successful transformation projects:
- Step 1: Create Urgency
- Step 2: Form a Powerful Coalition
- Step 3: Create a Vision for Change
- Step 4: Communicate the Vision
- Step 5: Remove Obstacles
- Step 6: Create Short-Term Wins
- Step 7: Build on the Change
- Step 8: Anchor the Changes in Corporate Culture
Underlining this, the opening key-note, given by Chae-Ung Um, VP of global procurement at LG Electronics, provided a detailed blue print for implementing transformation. The key watchword was planning.
This was central in converting the purchasing function to an unguided, immature back office, into a centralised, global advisor. In 2009, the function only had a single metric: savings of $200 million. Within one year of the creation of a formal procurement function, the team delivered savings of $500 million. Former CPO, Tom Linton, famously described this as “as easy as picking money off the floor.”
The role of recasting talent was also central to this. “We teach people how to influence people,” Chae-Ung Um stated. “The more you influence the more you save. Anything we now touch, we save at the double digits level.”
In the next presentation, Yannick Feder reiterated the importance of managing relationships: “It’s very important to win both people’s hearts and mind. If you don’t have that, you can forget your theory; your transformation won’t work.”
In order to enthuse both stakeholders and procurement teams, Feder empowered staff with greater responsibilities in strategic delivery and insight. He created his own motto to describe this: “Don’t give a child a fish, build his desire to fish.” The idea being, once granted the responsibility to act strategically, a buyer is naturally motivated to align himself with organisational objectives and become more innovate.
In many senses, delivering transformation requires first a plan to deliver energised and engaged teams.
from Procurement Leaders Blog http://ift.tt/1rTV2jQ
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The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.
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