A $4 billion performance materials manufacturer had recently promoted a non-procurement executive from within to lead their Global Procurement organization. Despite the fact that there was a centralized corporate management structure in place, the company’s four independent business units had little confidence in procurement and considered it a tactical function.
Amplifying the "Voice of The Customer" — Procurement's Internal Stakeholders
In assuming the role of CPO, the executive faced multiple immediate challenges:
- Functional Inexperience: Although a proven business leader, he had no prior procurement experience.
- Organizational Churn: Over four years procurement had four different executives leading the team. Furthermore, the high turnover in top and middle management positions prevented procurement from achieving strategic status.
- Problematic Internal Brand: It was hard to get buy-in and participation for spend management efforts from other business groups as procurement was perceived as delivering limited value.
The CPO recognized the importance of acting fast and bringing in an objective third party prior to leading a transformational effort. The company engaged Tenzing to help the new CPO accelerate the creation of a “blueprint” for transforming the procurement organization – one that would reflect internal stakeholder perceptions and interests.
How Tenzing Brought Strategic Value to the Entire Organization:
The first order of business was to capture the “voice of the customer” by conducting confidential interviews with over 40 global executives representing every business unit. These in-depth conversations gathered input on Global Procurement’s capabilities, contributions, and opportunities for improvement (Fig. 1) and identified potential barriers or risks to successfully transforming procurement into a high-performance function. Opening up these new lines of communication extended the CPO’s ability to listen and respond to internal stakeholders, and created the opportunity to return to each person with a summary of findings. This ultimately created buy-in and improved procurement’s internal brand identity relative to other functions (Fig 2.).
Rebranding Procurement: One Stakeholder at a Time
Turning the synthesized insight and supporting analyses into improvement imperatives allowed Tenzing to quickly build the CPO a detailed blueprint for transforming procurement:
- Improve strategic alignment with business objectives and the interests of internal stakeholders
- Implement performance metrics to measure, track, and communicate procurement’s contributions
- Develop an effective outreach program to promote improved cross-functional collaboration
- Clarify roles and responsibilities across the organization
- Upgrade talent and bench depth to improve procurement’s capabilities and category expertise
Tenzing applied a structured “voice of the customer” analysis to provide a new CPO with the insight required to transform procurement into a high-performance organization.
Fact-based, data-driven strategies achieved aggressive sourcing, supply chain, and operational goals
- Capturing the “voice of the customer” to incorporate the perceptions and needs of stakeholders
- Applying deep knowledge of procurement organizational design to design a blueprint for transformation
Discipline, teamwork, and flexible process orientation turned practical know-how into measurable results
- Conducting over 40 interviews, analyzing the responses, and presenting results and recommendations in just 3 weeks
- Improving the new CPO’s understanding and credibility through improved knowledge of stakeholder interests
Aligning people, processes, and technology to sustain peak performance and results
- Creating a phased procurement transformation program including critical activities, milestones, and key success indicators
- Building broad support for the transformation through increased stakeholder communication and interaction