Procurement is often viewed as a numbers game. A delicate mix of costs, vendor performance ratings, and operational efficiencies is calculated and used to meet the precise needs of the corporate strategy. However, math alone does not forge the best supplier relationships. It’s creating the right balance between fairness, accountability, and value within the supply chain.
Throughout my 12-year experience with the finance and procurement function within SAP, I have grown keenly aware of this need for balance in the supplier network and the organization itself – including the representation of women. The longer I work within these functions to address business needs and hear customers discuss their transformations in finance, shared services, and procurement, the more I realize that the lack of women with decision-making responsibility is hindering performance company-wide.
A personal testimony to the value of gender diversity within procurement
I was engaged not too long ago in a difficult contract negotiation with a global telecommunications vendor. After weeks of unsuccessful attempts to agree on pricing, our board-level executives got involved, and we were in a vicious cycle of arguing the same points over and over again.
Realizing that such wrangling was unproductive and wasteful, both sides agreed to take a break so I could appoint a new person – with a fresh perspective – to lead the negotiation and assume full decision-making responsibility. And yes, I chose the only woman on my team, and it was the best decision I could have made. She turned the entire situation around in ways that none of us had thought about weeks beforehand. She asked questions instead of following the process for agreeing on line items in the contract. This approach changed the entire conversation and delivered the biggest savings in a single contract in SAP’s history.
This is not to say that one gender outperforms another in managing relationships with multiple vendors and stakeholders analyzing data to pinpoint the best strategy, or negotiating effective, yet mutually inclusive, contracts. However, building a team of diverse perspective – across gender, age, nationality, and race – does make a real difference.
Embrace gender diversity – and raise the value of procurement
Whether I am heading a procurement organization or driving digitization strategies with multiple customers, I have always asked myself one simple question: “Is procurement underrated as a career path?” In my opinion, there is no better function than procurement to gain insight into the organizational setup, deeply understand the business model, and acquire functional expertise. Focusing on these benefits might attract more people to this kind of work, especially as millennials and women view such opportunities as a prerequisite for developing their careers.
Here are four ways procurement leadership can help address the gender gap:
- Cast a light on the hidden areas of the supply chain: To hire new talent, leadership must do a better job in explaining the function, demonstrating its integral value in business operations, and showcasing the various roles – visible and invisible – that make it happen.
- Rethink the procurement leadership path: If procurement organizations want to attract women, they need to look beyond their four walls and possibly outside the industry. By focusing on the skills of the individual and not just their background, hiring managers can discover perspectives and abilities that are missing – and likely much-needed – in their team.
- Create a strategy and put it into action: Lip service alone will not encourage women to join the ranks. Building diversity requires a growth strategy. Organizations must prioritize business needs, promote open collaboration, and plan for the long term.
- Remove unconscious bias from hiring and talent development processes: Here’s a harsh reality that has always stuck with me: Fewer large companies are run by women than by men named John. To avoid unintentional hiring bias, businesses should consider restructuring and redefining hiring processes. By identifying and targeting key competencies required for the position and creating a process to fulfill those needs, recruiters, hiring managers, and interviewers can better assess whether a candidate can do the job and if that person has skills that transfer well.
Gender-diverse procurement leadership bring greater value and opportunity
Leveraging the skills of a diverse team makes procurement processes better informed and equipped to answer global customer demand; weigh the risks and opportunities of contracting suppliers from different countries; and see the bigger, long-term picture of the entire supply chain. But first, the challenge must be addressed the same way a critical business issue would: Thinking ahead, setting measurable and meaningful goals, and committing those plans to action. Then, as more women engage in senior leadership positions, the door opens for real, accelerated, change.
Hire the best talent – the right people – to move the business forward. Isn’t that the point of creating a diverse workforce?
For more on creating the most effective teams, see Everything You Know About Leadership Is Wrong.