My Startup Lessons for Procurement Organisations
I’ve been fortunate enough to have embraced many careers in my professional life: an IT project manager, a Procurement director in a Fortune 500, and currently the founder and CEO of a procurement software scale-up called Per Angusta.
In my current tenure, I wear many hats every day: a leader, a product owner, a procurement expert, a salesperson. I do that in the context of a small company, selling to organizations that are – in average – 5000 times larger than we are!
As you can imagine, it takes a certain dose of creativity, grit, and -to some extent- madness to thrive in this context.
I often look back to see the path I’ve covered since I left my comfy job. I find myself reflecting on what I would do differently if I were a Procurement practitioner again, after having been a startup founder. Here’s what I’ve learnt so far.
If You Build It, They Will Come
…no they won’t.
There are a few lessons in “Field of dreams” with Kevin Costner (you should watch it!), that I found invaluable for startups and that also apply to procurement organisations.
You may have the best stadium/product/value proposition, but it might not be enough to attract the best people. And you need to go through a lot of hoops to get people understand why the things you are doing matter.
Everybody understands that commercial management, risk mitigation, and supplier collaboration/innovation are critical in any company. Yet, why is procurement – whose job is precisely that – still struggling to establish its brand? Why do the stakeholders and finance ignore you when the value you have to offer is so obvious?
The answer is simple: because you also need to make this understandable, manageable for the audience. After all, everybody negotiate their flat, their car, or their sofa. Why would they come to you to negotiate what they need in their job?
You need to understand what makes them tick, what are their bias or what holds them back from working with you.
Sometimes they simply don’t want. You have to make your way to the top of their agenda.
It may be infuriating but Procurement should not consider their role should be taken for granted. Policies don’t create credibility.
Become likable, relatable, dependable… indispensable! It takes a bit of time so be patient and build those relationships.
Which leads to the second learning.
Find your Champion
All of this is good, but it’s unfortunately not enough. You need to find your champion.
Your champion is someone who believes in you and who will carry your message with a lot more power than you, because they will appear objective (or even better: they have put their money where their mouth was).
Your champion is someone for whom you have delivered huge value or for whom you’ve saved the day (e.g. getting them out of a tricky contractual commitment). These people will be more likely to engage again and to sing your praise. This is how other people will come to you, or – at least – will be more willing to listen.
If all goes well, your success will become viral.
Read the chapter “The Law of the Few” in Malcom Galdwell’s excellent The Tipping Point. You will learn what mavens, connectors, and salespeople. There are a few good ideas to use.
Side comment: if you work with suppliers you truly believe in, be their champion. It won’t cost you anything, but it will mean the world to them and you will earn eternal gratitude and unconditional support from them (plus it’s excellent for karma).
In startup-speak, becoming ramen profitable means that you generate sufficient revenue to survive on ramen… In other words, your value proposition and your product are starting to get an echo on the market. This is a first necessary (but not sufficient) step!
What’s the lesson for Procurement?
You won’t get the means to invest/develop until you’ve earned your stripes (that’s your product/market fit). But how can you earn them without any means? Welcome to the life of a startup my friend ☺
Embrace this as an opportunity to rethink the way you do things, to focus on what matters, become an intrapreneur (that’s how Per Angusta came to exist). Learn to do more with less (or nothing).
And you should start trusting smaller, like-minded suppliers. They can be your chance to shine on a budget.
Startups call this “growth hacking”.
That’s how you’ll get traction and convince your stakeholders of your worth. That’s how you will eventually convince the CEO/CFO to invest in Procurement and give you the means to accelerate. But be careful, as the CFO of my previous company said: “this is not a church”, they expect a return on their investment!
Do Things that Don’t Scale
To conclude, I wanted to share with you 2 articles that have been highly influencing me because they capture the gist of what startups should do. And it’s actually very easy to transpose that to the context of Procurement.
Because ultimately, Procurement is a match-making function and a lot of what we do should be about relationship, about experimentation.
The 2 articles are from Paul Graham, on icon in the startup and innovation scene. He’s known – among other things – for having created Y Combinator, a startup accelerator that launched Dropbox, AirBnB, Reddit, Flexport or Docker.
The first one is “Do Things that Don’t Scale” it talks about trying things to see if they work before trying to automate them. There’s a lot to learn in the process and the following iterations will focus on the things that actually matters http://paulgraham.com/ds.html
The second one is « The Hardest Lessons for Startups to Learn” it’s a collection of things, mistakes Graham has seen. Most can apply to Procurement. http://paulgraham.com/startuplessons.html
It’s now time to get outside of the office and the building!
Pierre Laprée, is the founder and CEO of Per Angusta