Procurement and strategic sourcing is a support function aimed to improve the way a business acquires goods and services. If this statements holds true, why do stakeholders resist, neglects or opposes to the initiatives aimed to such important cause? In many years in the practice, I have seen stakeholder resistance and the drivers behind it. Logical or not the opposing forces are there and they have to be dealt with in order to have success in the initiatives that drive many procurement and strategic sourcing projects. Here are five of the most common types of resistance and to my better judgment the drivers and a humble suggestion of how to deal with them. The idea is to give you a suggested cause of action based on what has worked for me in such cases.
We are all human beings, especially stakeholders. We are comfortable and we feel safe. That safety is threaten by change and nobody likes the uncertainty that change brings. That becomes the usual resistance to change which translate in resistance to the new way of working from traditional purchasing to strategic sourcing and procurement. Change management is key for procurement when the key for many strategies is to “change” the way things are done in order to optimize a contract or a purchase. The best way to handle stakeholder resistance due to change is by the ways of information and planning. When a stakeholder is informed the uncertainty is lessen and the team involved are aware of what is to be expected. The only way to inform is to have information, this information will come from proper planning. When you plan ahead you will know very well what to expect and then get prepared. This will lower resistance to change and will help on the stakeholder relationship management.
- Lack of Expertise
I have come across many times where engineers, medics, lawyers, and highly trained professionals are doing routine purchases. Why? Because there is a need to understand the technical extent of the specifications for a specific purchase. If you are a highly trained professional and understand fully what horrible implications a wrong purchase can have due to an error on specification or term, it is very natural to go and do the purchasing yourself. Now a procurement manager comes and tells the expert stakeholder that all that purchasing will be handled by procurement professionals, the upmost normal reactions is to resist. The argument holds true only in the case where procurement works all by themselves and negotiates alone. Now we all know that is not what procurement does. Procurement is a collaborative process where input must take place from stakeholders in order to get the most out of the negotiation. So when your stakeholder resist because they don´t feel procurement has the expertise, it is a clear sign that stakeholders must be involved an onboard on the sourcing initiatives. All main expertise should and will come from them. No need to fear.
- Vendor relations
If your stakeholder has done the purchasing by themselves for a while, expect them to have grown a relationship with their vendors. For a stakeholder vendors become co-workers that will do the job needed or bring you the goods needed just the way you like. They become friends and why not, you have the same objectives and destiny. The problem comes when procurement shakes the friendly status quo and starts evaluating vendors and the market and so on. Stakeholders will stand in resistance because “if it isn’t broken, don´t try and fix it”. The problem with that is that opportunity might be missing by doing things the same way forever. Vendors might even try and take advantage of that friendly relationship. Or maybe market has shift and nobody noticed. I´m not saying don´t buddy up with your vendors, what I´m saying is that stakeholders will not like this situation and resist. The cure for this resistance is to consider this traditional vendors and get as much value built on the relationship. Let your stakeholders know that if there is value from the relationship created, this value will be accounted for, but if you want to do things right, you need to assess the market to challenge the status quo.
- Less control
To many leaders handling all purchasing activities gives them the feeling of being more in control of the operation. If you look at it at the end the operation needs to have its goods and services on time in the right spot and with the right specification. The control that operational stakeholders feel is because they have knowledge of the details of the purchase. At the end, is not who did the purchasing, but more around the information. Stakeholders see it as “if you order, you know the detail”. The cure for this, is knowledge sharing or information. If a stakeholder is well informed of all purchasing activities this need for control is no longer felt. If they know when, what, and where, their goods and services are, they will certainly will feel more comfortable. Who did the purchasing will be irrelevant for the operation.
- Less work
Not only for procurement and strategic sourcing initiatives holds true, that when a department loses workload everybody gets nervous. Why this reaction? Very simple, less workload, less workers. People as the humans beings that we are, have a job security fear. Workers tend to relate department workload to job security. That said, in many cases procurement and strategic sourcing comes to the departments as a function that will take over department workload. Stakeholders have to understand that this initiatives are not aimed to reduce staff, rather, they are aimed to improve the way things are done. If workload is being reduced is in order for the department or business to concentrate in their core activity, selling, developing, improvement, etc. anything that is being neglected by repetitive, cumbersome transactional work. Now if your procurement and strategic sourcing is not offering improvements and is replacing workload from the other departments you need to rethink your functional support. The idea is to put more strategy in purchasing for the business.
This are some examples and very humble recommendations from experience. My best recommendation is to keep information flowing. Keep your stakeholder aware of all activities and work on collaboration. This two recommendations can be, in most cases, an all-around universal cure for stakeholder resistance.