8 September 2011 | Rebecca Ellinor
Ahead of the CIPS Conference 2011, we asked speaker Ed Worthington, senior procurement manager at Virgin Holidays, for his take on how to manage and get involved with stakeholders
What’s your role at Virgin Holidays and how long have you been there?
I manage the procurement function for the Virgin Holidays Ltd group, which consists of Virgin Holidays and two subsidiary companies. This means I work with managers throughout the group to facilitate the sourcing of new suppliers, renegotiations and amendments to existing suppliers, and act as a point of escalation for contract management issues such as poor supplier performance and commercial disputes. I’ve been in the role for just over three years.
What shape was procurement (the department and its activities) in when you arrived?
It was the sole responsibility of managers throughout the business. While some good work was carried out, this model had led to a degree of inconsistency about how procurement activities were approached and, to an extent, it lacked cohesion from a central point of view.
How have you changed this?
This was changed by working with managers across the business to agree on what the challenges were, where we wanted to be and how we were going to get there (i.e. our proposed strategy). We gained high-level approval for this proposed strategy and implemented it throughout the business. Activities included delivering a contracts database, spend analytics, stakeholder engagement, drafting of tools, templates and standard terms, policy drafting, a website enabling managers to easily access procurement information, and much more.
Was there much stakeholder engagement before you joined the company?
I’m fortunate to work with some of the most talented, forward thinking and intelligent people in the Virgin Group. When I arrived, many stakeholders simply did not understand what procurement is and how it helps. So the challenge was principally one of clear communication rather than influence. I felt if I could explain what I do simply, in plain English (which includes not using the word ‘procurement’ when explaining it to someone who works in marketing!), then the new business function would mature more quickly.
What’s it like now?
Good. We still have challenges of course, mainly ensuring that each department has sufficient resources and that we are working strategically rather than tactically with each area.
What challenges did you have to overcome to achieve this?
It was mainly about ensuring managers across the business are making sufficient time to understand how procurement can help them to do their jobs effectively. Everyone here works so hard that it’s sometimes a challenge to fit me in.
In a recent SM poll, 96 per cent of buyers reported good relations with the majority of their stakeholders; the same poll online showed the opposite is true. Anecdotally, what do you think is the state of relations between the purchasing profession and its internal customers?
It’s inconsistent, in my view. There is still a lot of work required for purchasers to be aware of how they represent their profession to stakeholders. In the past I’ve seen procurement managers at all levels blaming ‘engagement’ issues on the client departments. I would encourage procurement managers to take a more objective approach: sit down with your stakeholders, set out your challenges, explain why they are important and work with stakeholders to fix the issues. Perhaps the root cause is actually one where the procurement department does not add the value it thought it did. Maybe the procurement department is not flexible and reactive enough for the client department. Or maybe procurement has never clearly explained what is expected of the client department.
For those experiencing blockers and problems, what advice can you offer? What’s the secret of good stakeholder relations?
Figure out which people you really need to influence and de-prioritise the rest for now (the 80/20 split is useful here). Make sure you focus on working with your priority list, spend as much time as possible with them, ask lots of questions and listen to the answers. If traditional relationship-building and approaches such as the answer to the question above still do not work, consider influencing those within the same peer group to create an expectation that is much harder to ignore or avoid.
People often say you have to “speak their language” but what does that mean and how do you learn it?
This means understanding what it’s like to be in your client’s shoes. This may include understanding jargon, acronyms, business challenges, technical systems or the nuances of day-to-day supplier relationships. This is hard when working across multiple ‘categories’, but in my view the easiest way to learn it is by scheduling recurring meetings with key stakeholders to build an understanding of their challenges. I also regularly Google specific product names, acronyms or anything else I don’t understand to read any relevant articles. Generally, the buyer has to make a conscious effort to learn about a field and recall as much as possible.
If you’re setting up a new procurement department, or entering an organisation that has no ties with any stakeholders, where do you start?
Start by painting a picture of the culture of the company you’re working in. Don’t assume that whatever you did at your previous company will work in the new environment. Plan with the stakeholders to carry out an audit of current strengths and weaknesses and work with them to agree on the priorities and approach. Pitch this to senior management and gain approval to proceed. Learn to adapt and be flexible in your development of a strategy as you spend more time working in the business.
Stakeholder engagement
DOs
• Work out which people you really need to influence and de-prioritise the rest
• Consider how best to represent procurement to stakeholders
• Understand what it’s like to be in your client’s shoes
• Ask lots of questions and make sure you listen to the answers
• Make a conscious effort to learn about a field and recall as much as possible
• Plan with the stakeholders to carry out an audit of current strengths and weaknesses
• Learn to adapt and be flexible in your development of a strategy
DON'Ts
• Use procurement jargon
• Blame ‘engagement’ issues on the client departments
• Assume that whatever you did at your previous company will work at your next
☛ Ed Worthington will present a session on ‘Creating and developing a procurement strategy’ at the CIPS Conference 2011 in London on 6 October. For more information on the event, please click here
