Sales and Procurement - two sides of the same table?
by Jonathan Ratcliff MISM
Why a Strong Sales Profession Benefits Procurement Professionals (and why we both should be worried)
Recently I had the opportunity to attend a meeting with presentations from both Dr Paul Joesbury and George Demetriadis which set off a train of thought might be useful to share and stimulate discussion. As a Management Consultant helping Managing Directors of companies to grow their Sales, it is always of interest to hear how Procurement professionals are developing themselves and what the latest initiatives are.
I was surprised to hear from Paul that, even after decades of delivering value, there were still many organisations who were not using the Procurement function effectively and saw it as a tactical resource rather than a strategically useful one. Often there is no representation on Boards for the Chief Procurement Officer as they rarely exist and consequently Procurement is used re actively rather than proactively.
Paul highlighted that in many of the organisations that he has worked in, Procurement must justify themselves in order to get the right opportunities. In other words, you have to sell yourselves in order to raise your profile within the organisation. He himself is described by others as “a breath of fresh air in a somewhat polluted profession”.
And it struck me that there are many similarities with the Sales Function. If you think Procurement has a poor reputation, try introducing yourself at a social function as “working in Sales” and see how quickly people move away!
Given the readership of this blog, I can almost hear you thinking that it is not surprising that Sales has a poor reputation. There are a lot of poor Salespeople out there and it is something that I am doing my best to change along with the profession’s organisations like the Institute of Sales Management of which I am a Master.
Having spent a number of years as a Purchasing Director in between working as a Sales Director, it saddened me to see the quality of a number of the visiting National Account Managers who were driven to sell to me tactically rather than wanting to work strategically with my organisations (Swallow Hotels and Little Chef). Many of them did not know how to ask a Strategic question and were only interested in selling me their latest offer.
I was most impressed to hear from George Dimitriadis about his Negotiation Hypercube. If you have not heard him speak, I urge you to do so. I was so impressed I bought his book. There were two key points that resonated with me for my profession about what he said.
Firstly, he encourages junior members of the Procurement team to get involved in the process and see what happens in negotiations so that they can be ‘bloodied’ gaining valuable experience. This might be easier to achieve for office-based Purchasing members than Field Sales people but it is something that is extremely rare for Salespeople in my experience. I think both our professions should encourage it.
Secondly, and this is what stimulated me to write this article, was the concept of additional value creation in the negotiations. If both parties are only haggling about what is on the table, then there is a limit to the size of the opportunity. However, if trust has been developed between both parties and Brainstorming and problem solving has led to additional value being created then there are more opportunities for a satisfactory conclusion as there is more pie to share.
In order to create that additional value, both Sales and Procurement need to be adept at mutual strategic understanding which takes time, trust and investment and both need to be skilful in the art of relationship development as well as negotiation skills. But ultimately, if there are skilful and well trained Salespeople, it can benefit Procurement too.
What frustrates me is that there is often insufficient training of my profession especially where it matters the most – in the Field.
I recently asked a group of 12 CIPS professionals who were actively involved in the Supply Chain process, how often they had seen a Sales Trainer out with one of their Account Managers. They had an average of 15 years’ experience each. Not one hand went up. Several of them had seen a Sales Manager accompany a representative but that is not the same. A Manager or Director is likely to take over the proceedings and therefore miss how well (or badly) the Salesperson is performing.
A key part of my client offering is the silent accompaniment where I observe the interaction with a view to improving it. Whilst the salespeople find it unnerving for the first few minutes, they soon forget I am there and carry on as they normally would which is the intention. The lessons they learn from the feedback I give them are invaluable to them because they are based on actual events from their own performance.
These lessons are incorporated into training plans which are often classroom based but then tested again in the Field.
So I offer this article as a means of mutual encouragement for both our professions. Whilst technology is certainly threatening job opportunities in both Sales and Procurement, it is beholden on those of us who lead our professions to keep training and developing our up and coming professionals with new ideas, new process and new ways to add value where it matters most.
Jonathan Ratcliff is a Director at JMR Sales & Consultancy Ltd., which helps a variety of clients with short to mid-term contracts solving a wide range of their business development challenges. Johnathan works across Automotive, Construction, Wholesale, Retail, Manufacturing and a variety of service industries