has changed a little bit. Uh Roy and I are joined by Michelle Clary and I’ll
introduce both of those folks in in some period of time. But everybody, you probably know Mr. Roy Anderson. He is a
lecturer at the Nor Eastern University up in Ba Austin and he is also a uh
procurement practitioner extraordinaire with with quite a bit of experience in procurement in pharma and financial
services. We are being joined today by Michelle Clary who is the freshly minted procurement director at Warner Music
Group. And we thought it would be very interesting to have Michelle join us as she is now making friends at uh Warner
Music Group and creating alliances of internal stakeholders. and it was very suitable for our podcast today which is
to talk about be a friend to get a friend how to build strategic uh stakeholder relationships in procurement
and uh Maya if we can progress to the next slide. So today we’re going to talk about how you can do achieve these
objectives by having actionable tactics and you know essentially procurement needs to come in and and earn the trust
of stakeholders and move sort of from the from the policing function to
becoming a strategic partner which I think is very very important not to bring guns blazing into procurement as
you start to build relationships and so on. So, I’m very interested to learn sort of from Roy what he has found
effective in the past and then also talking to Michelle about how we are thinking about doing this in the in her
new role. As always, I would love to get your questions in the chat and also
learn where you guys are calling in from today. So, with that, let’s jump right into it to the next uh
slide. So, why do relationship matter so much? And
uh the problem basically is if you don’t if people don’t trust you, people won’t engage you, right? So you know
essentially what we want to do is we want to shift from enforcement to enablement and we also want to make sure that
people see procurement’s value beyond savings and so on. So essentially what we want to do is we want to be part of
you know the the larger team of procurement so that we are invited into the fold so to speak rather than sort of
sitting at the end of a process and then being the traffic cop as things come in. So uh let’s move on to the first
question. So Roy in your point of view what is the biggest mistake procurement can do as
we’re trying to get in there and building new relationships? I I’ll start with you know our history of these uh
episodes. We’ve talked about the elimination of transactional work and
the elimination of being the uh individual that goes oh you have to you have to use procurement or best
practices use procurement as and we we go in there saying you must do uh this
type of process when when in actuality what we need to do is bring talent to
the bring in talent as appropriate
because Most importantly to our value proposition is our internal customers
realize that we actually have the skill sets that are going to make it easier for them to get their uh goals
accomplished. So the mistake number one is uh trying to be that stop you have to
use us versus I’m I have talent. I’m bringing in new talent and then I’m
going to work with you to hit hit your goals. All right, Michelle. How does that
resonate with you? Yeah, I totally agree. I mean, I find that the most successful procurement
folks are those that can build strong relationships. So, I think the biggest mistake that some people make is, you
said it before, sort of coming in guns blazing or like the bull in the china shop. I think you have to build the
relationships, understand the landscape and the ecosystem and then start coming
with your ideas instead of coming in, you know, on day one, day five with all
of these changes that you want to make. You’re just going to immediately lose your audience.
Yep. Some some truth to that. Um, one thing I want to add is a lot of
times, especially as you’re starting out in a new procurement function or maybe you’re building a procurement function
for the first time is, you know, it sounds cheesy, right? But you want to listen more than you talk and you want
to figure out what uh the pain points are and what the priorities are rather
than sort of coming with a solution in mind, right? uh some you know this this might shock some some viewers here today
but I found a lot of times when you kind of walk in assuming that you know the answer you you’re very often wrong
and I was coaching a freshly minted chief procurement officer not that long ago
and um I was advising him these people might not care about procurement savings
they maybe they just want the process to be better maybe they just want the uh
to to the risk to be reduced or have better governance and so on, right? And those are very different uh goals and
tactics that need to be applied. So I think the cheesy adage is God gave you two ears in one mouth. Use them
accordingly. Right? Proportionally. Totally agree. Yeah. And I’ve also noticed that uh
there there are uh times when your internal customer is just trying to use you to cover their um historical errors.
So I say stop. like, “Hey, you want to go buy something from that supplier and
get the invoice in? That’s fine. But that process is all on you. I’m good. You know, that’s fine. Uh, I’m going to
be working towards a successful long-term solution. That means I’m going to do the sourcing. I’m going to do the
uh the negotiation and contracting in support of your long-term goals, and we
will together get to a more informed, auditable, quality process.” And um I’m
not going to be your coverup artist uh at the end of this because at the end,
you know, when when we look at the results, the results that you work with me, I know are going to be much better
than the results that you had on your own. Uh so I’m not going to be your go-to guy to fix those problems. Uh I’m
going to be your future success story. I like it. I like it. Moving on to the
next question. So, how do we get into that early engagement phase? What are some of the tactics that you got found
works and what are some of the tactics you found does not work at all?
Go ahead, Michelle. Oh, no. Okay. So, like I said, I approach procurement from a relational
perspective. I feel like I have to earn my seat at the table with my stakeholders. So I I ask to be invited
to their weekly team meetings or if it’s budget season, you know, please include me as a fly on the wall to start with an
observer. I’m I’m trying to understand the dynamics of the team, what the needs are, you know, maybe if it’s marketing,
understanding what the brands are trying to achieve. um listen first and absorb
the information. Like that is so valuable because it shows the teams that
you’re trying to understand their dynamic and what their core needs are versus just coming in with your ideas.
And then that just really organically leads to you being consulted and pulled in earlier because you’re viewed as an
extension of their team, not as this person in a foreign department that they
don’t understand. Uh one of the things that I found uh important and we talked about this
earlier is one you got to stop being that transactional person. Uh your your
that work has to be done but it does not have to be done by you. Uh that means the technology should do that t tactical
suppliers work and hopefully with the right uh technology in place your internal customers are doing that
tactical work so that you freed up your entire organization. Now with AI that
that is even more dramatic that you can eliminate all of that work and then start bringing value to your internal
customer. So one you have to have the time to invest in those internal
customers not one month before they buy it not even six month every category is
different so I’m just doing an average but potentially two years before they have the requirement. they’re getting uh
activity and saying, “Hey, we’re thinking of doing this and it’s going to come up and and you’re in June and your
budget year starts in January. You have to start feeding these internal customers contracted suppliers that have
more innovation, greater competency and capability. they have value add and that
you have the time to explain and develop that relationship with the internal customers so that when they make the
budgeting decision which frequently includes the pricing from the supplier
it’s our supplier that they’re going forward with. So therefore when they need to buy it we’ve already got the
contract in place. We already have the the the terms conditions covered. Now it’s about optimizing that supplier
relationship. So, I’m not saying everything’s going to be two years out. Some things are going to be three months
out, six months out, but don’t think it’s going to be a week or two before they buy it. It’s it’s back when they’re
doing the project, and that’s when you need to have the time to support them. I also, you know, it’s a bit of an
aside, but I also feel that the to the extent to which procurement can provide value beyond the transaction. So, for
example, coming proactively to your senior stakeholders and saying, “Look, here’s how many projects you did last
year. Here’s uh here’s how many contracts that are coming up for renewal next year.” And sort of bringing it to
them so that they don’t have this fever pitch one day of like, “Oh, I need to renew this contract and go off and do it
or whatever the case may be.” Right? So I think certainly looking backwards to predict the future about contract
repository for example or or category reviews that’s good stuff to bring in as
well as being part of their budgeting process as they’re kind of going through it right and um I think you probably
need both um to be fully u functional in that space. Uh all right what does um
Maya can you flip to the next page please? Uh so what does it look like when you have built that rapport with
your stakeholder and and what is different?
I can start with this one. So I mean I think for me perfect world is where I am
seen as an extension of their team and I’m just naturally involved in things. It’s not I’m not having to ask anymore.
I’m I’m truly embedded within the teams and I’m consulted and you know two years
honestly sounds like a dream to be looped in that early. You know I’m used to dealing with three days um so I would
love two years but you know the having that proactivity and I think also
having stakeholders that truly understand my function in procurement and how I’m helping to provide value.
Um, I’ve often joked that I want to start a side business of procurement t-shirts. And I think one of them would be we’re more than savings. Uh, the
other would be early involvement. Um, but I think like having stakeholders that truly understand that value of
procurement, that’s that’s a perfect world and helps you with that day-to-day
relationship just to be very buttoned up and strong. Yeah. I found that uh if my team uh when
I look at developing the goals with my team, my team comes forward and says, “Okay, here’s my two key or three or
five key internal customers. Here are their goals. Now, how do I build my goals out so that
I enhance and match the pace, the tenor, the the need of those internal customers
that I can bring suppliers. So when my internal team is matching their goals
and therefore when I go back to them for my uh weekly or monthly status more
monthly than anything else I said here’s where my team is supporting specifically
your expectations and your goals and that would be you know quality service delivery but more importantly the
innovation and what I find just really uh takes off is that when we are
bringing in suppliers that make my internal customers uh not only more innovative but not only hit their goal
but surpass their goal. And then one of I I think I’ve told you this before, Andre, the first person I’ve ever hired
into any new procurement organization is a marketing person because we’re doing hundreds of sourcing events. That means
hundreds of stories around how we’re changing behavior, changing value. And
we have to do a much better job marketing that result whether it’s in
social media posts or text posts or reporting or um any of those that the
people realize and that we highlight those that working with us and tell them tell the rest of the organization how
good is Sally who has worked with us and all of a sudden she’s hitting their goals and and Sally’s like yeah this
relationship has been supportive. all of a sudden you start creating a momentum where you don’t have to uh beat people
over it, the story comes out because people are talking about it. Yeah, I think that’s a great point. Like
if you’ve reached the point where your stakeholder can come to you and say, I need a tool or I need an agency that can
do X Y or Z and they know that you’re going to come back and say I have the perfect partner for you know exactly who
to call. Like that that means you’ve you’ve gotten to Xanadoo of that procurement stakeholder relationship.
So what I what I always um kind of you know the feeling is really good when
stakeholders come to you to solve their problems. Yes. Right. So that they see procurement as a
trusted relationship stakeholder where they can come to you and say how do I solve this or what do you think about
the output of XYZ staff member and so on and so forth right because they realize that it’s a it’s a joint relationship.
And the second thing is when you have other stakeholders going to bat for
procurement or being your biggest disciples and walking around saying how how they helped you and I think that’s
um to me that’s always success right I kind of think about when you sort of start that new procurement function you
take over procurement function is when your staff members are repeating your words you know they’re basically saying
they got it they understood what what it was supposed to be that’s that’s level level one level is
when your stakeholders are also saying the right things in terms of how to how to engage with suppliers and how to
manage suppliers or stakeholders or whatever the case may be and I think that’s for me
true signs that you you’ve sort of reached where where you want to go.
Now there are just a quick note in the fact that it’s got to be a two-way street. So as you are we’re very
dependent on technology and now we’re going to be very very dependent on an AI implementation strategy plan that we
have to be able to let the company know how we’re using the uh IT group the uh
the marketing group the you know the production group inventory where whatever the areas are that how they’re
working with us and then raise them up when whenever possible.
All right. Hey Maya, can you go to the next slide, please? So, the last sort of
formal slide here as we get into it and if there’s any questions at all from the from the group online, feel free to drop
them in the chat. We’re looking at it. Um, so what KPI or KPIs should
procurement measure if they want good supply, sorry, good internal relationships?
As I mentioned before, my team’s goals have to match my internal customer’s goals. So therefore, the KPIs have to be
directly in relationship to what that internal customer um is looking to do. So, so my story is when I was at
Fidelity telling this fund manager that I could save them a million dollars, he came back to me, goes, “Roy, I make this
company a million dollars a day. Help me make $2 million.” And I’m like, “Oh,
it’s not about savings. It’s about speed and competency and capability. Well, I want a KPI that shows how we doubled
