Procurement during a recession, a human view
I was early in my procurement career in 2008. Inflation was higher and higher, our customers had less money to spend, the revenue stopped growing and started declining and the entire organization entered a frenzy of cost pressure. Suddenly from a new procurement organization formed, we became the focus of the entire executive team. The narratives were either you decrease OPEX or we have to fire people. I was looking in the eyes of my colleagues and felt the personal pressure of saving their jobs.
We had new targets of 20% or more savings. How do you achieve this when our suppliers were operating in the same economy and prices were going up?
It was a brutal time, high on emotions, pressure at work, pressure at home. As a family we outgrew our small apartment, we had a toddler, and we were in a process of taking a new 30 year mortgage. Just when the housing bubble was bursting… As always in times of unrest, there are your own problems to think about and the company you work for.
In periods of unrest and cost pressure, being in procurement is like being the superhero and the villain in the same time. You manage one deal that is amazing and feel your customers can continue to enjoy the services and your colleagues keep their jobs. You have one that does not go so well and all start to finger point that procurement could not achieve to ride that wave.
I am standing here today, having passed that period and the following crisis. It made me stronger, I build my career in those years, I know I have survived and thrived beyond it. And so will you.
So, having lived through tough times before, this is what I will expect happens for you:
- Emotions go through the roof
- Relationships are tested to the maximum
- You come in focus for the exec teams
- You spend more and more time working
What do you need to remember?
- This also shall pass
- In times of unrest, you can create new opportunities, especially in a procurement career
- Your inner resources will get tested to the max
What can you do to survive?
- Prioritize ruthlessly. This is not the time to be fluffy and try to do it all well.
- Clarify objectives. Is it cost? Is it cash? Is it availability of supply? Is it time? Long are the days where you can optimize a deal for all factors. Know what is critical for your business, sign off on that, and find ways to optimize for 1 and not 10
- Ask for help proactively. Know that asking for help is not a weakness but one of key leadership strengths. Be proactive and activate your mechanisms early: ask your manager for a crisis recurrent leadership meeting to enable decisions and support for your deals, engage your mentor or sponsor for advice or opening doors that are closed
- Recharge, make it a personal non-negotiable. Crisis do not pass in 3 months… they are marathons. There will be a longer and longer to do list each day. Book time in your calendar each day for: a walk, a talk with a friend or family, 1 good healthy meal. Have a bottle of water with you at all times. Take 7-8 hours of sleep. 1 day a week when you do not think at work. And to do that fill it with fun activities, time with family and friend, travel, reading, swimming… whatever it is fun and recharging for you.
- Learn how to regulate your emotions through breathing. It is a fast mechanism. Learn and practice. You know that? Then start meditating. You do this also? Then start cold/warm exposure. You see where I am going towards? Add new tools as you will need extra resources from whatever your baseline is now.
What can you do to thrive?
- Know that these periods are the perfect storm if you have great ambitions to grow. But solving all problems and being the hero for everybody is not how you do it. Choose 1 leader that will be in a position to influence your career and focus there
- Learn, share knowledge, help others. This is a time to build relationships that will last. Become the one that people trust and can rely on.
- Work hard, have amazing results and make them visible. Do not stay all times in the shadows but do not stay all times in the sunlight either. Too much leadership exposure will burn your resources, too little and you will not be noticed at all, speed of change will be huge and your deal with be taken for granted in 1 week and forgotten.
- Sponsorship, mentorship, coaching. The Triade of support that can propel you and your career. I know you will not have time, you will joggle constantly tents of initiatives. But if you stay focused and do not deprioritize your career, you will be able to find 1h a week. Can be during a lunch, or a walk. Combine them but make sure you have them.
What can you do as a leader?
I imagine you are most probably in a set-up like this: you are short on people, you have been hit by great resignation, covid, sick leave, mental health. Hiring is freezing. In some cases firing is on the table. What you have is what you have, you cannot rely on new hires for the next 1 year.
- First, remember you are human also. Put your oxygen mask first. See above advice.
- If you have a crisis strategy activate it. If you don’t, create one now. Communicate it, manage expectations. Build the bridges. Create the story and the narrative, otherwise other will do it for you.
- Remember that people will rely on you for support. Get out of their way, do not micromanage, be a ladder and not quick sands. Change the narrative of the 1 to 1. Split them in 2 themes: how can you support and how can you recharge your team. Stop making them a status update, make them about the other person in your team. Think resilience first
- Communicate to all your team/s what are the priorities, what is put on hold and why, what they can contribute to and how. The worse is to keep them in darkness, they need certainty and to understand decisions, priorities and their role. They need also a sense of purpose, a common why.
- Take extra care of the people you rely on: regular what do you need, leadership support for fast decision cycle, make sure you appreciate, motivate, grow, support
- Incentivize rest and recharge
- Allocate personalized support resources – not a hotline in shared service but a name so they can work in teams
- Remove barriers in process and let them do their thing
You’ve got this!