With Kelly Barner, Owner & Managing Director, Buyers Meeting Point
00:00:00 - Starting out in services procurement
00:15:50 - The relationship with information and the power of a good question
00:26:00 - Lessons from scaling diversity in the supply chain
00:39:15 - Honesty and pragmatism - the outside-in perspective
00:45:00 - Procurement's involvement in the C-suite - building a new legacy
00:57:40 - Evidence-based decision making in self-service buying models
01:07:20 - Data, automation and reporting as an enabler
01:16:15 - Predictions for the future of services procurement
Jonny: 0:00 Okay. And we’re off. So I’m very pleased today to welcome Kelly Barner to the podcast. And Kelly is the owner and managing director of Buyers Meeting Point. Kelly, thank you very much for joining me. How are you?
Kelly: 0:13 I’m doing great, Jonny. I’m thrilled to be with you. Thank you for having me.
Jonny: 0:18 Excellent stuff. Now, first of all, tell me a little bit about where you are right now? What time it is? And so you’re joining us from the US?
Kelly: 0:30 Yeah.
Jonny: 0:31 Whereabouts exactly you’re at the moment?
Kelly: 0:33 So since I’m talking to you, and you’re in the UK, I’ll say I’m in Boston. If you were closer to me, I would tell you, I was about an hour west of Boston, which these days is actually an hour. There’s still not that many people driving into the city to work. Under normal conditions with all the colleges and hospitals and businesses in there, it could take anywhere between two to four hours to travel that one hour into the city. But under good conditions, I’m about an hour west. It’s just after 9AM in the morning here. So this day is still full of potential for getting stuff done. And although it’s rainy. It’s kind of a rainy, dark day here in Boston. It’s right at the edge of everything being ready to bloom in the spring. So I just know we’re going to have a few rainy days and then this weekend, it’s just going to be gorgeous springtime weather.
Jonny: 1:25 Yeah, it’s a pretty cool time of the year, isn’t it? So I do like it. Interesting what you were saying about kind of the traffic being effectively like half or 1/3 of what it normally is. I had to do a bit of a journey this morning. And I found a very similar situation. It’s definitely starting to ramp up a bit in the UK. [Inaudible 0:01:42] and it may come up in our discussion as to whether we’re ever going to get back to the levels we saw before. But I guess, just to kind of start things off, so we are going to get our heads together and share some thoughts and go on a bit of a conversation journey just around the world of services procurement. I know you’ve got loads of really cool ideas and some points that we’re looking to discuss. And before we get into it, would you just be able to give a bit of a kind of summary of your career, where you started out, where it’s taking you, and where you’ve got to, and what you do now?
Kelly: 2:16 Yeah, absolutely. So my original plan was a little bit far afield from where I am now. My original plan was to be a college professor focusing on Shakespeare and Chaucer.
Jonny: 2:27 Oh, wow!
Kelly: 2:29 Yeah. So I ended up getting a master’s degree in library science. And while I was there, I discovered that large corporations have libraries. And it’s an absolutely fascinating thing. I don’t know if anybody watching or listening had the opportunity to tour one. If your company has one, go check it out. It’s an amazing way to get sort of the spirit and the legacy of the company. But in addition to companies having corporate libraries, research firms and consulting firms also have these amazing teams of researchers. And so I sort of discovered the world of market intelligence. And that took me on a journey to [Inaudible 0:03:11], USA. It’s the US contingent of a Dutch owned company of predominantly grocery stores. So here in the Boston area, it’s stop and shop. If you happen to be down in Maryland, Virginia, down there, it’s giant Landover. At the time, we own two tops out in New York, as well as US food service, which has also moved on since then. And while I was on that team, doing Global Knowledge Management, pulling in ideas and saving them for others to use, there was actually an Enron style accounting scandal at the Dutch parent company, right down to the stereotypical Dutch equivalent of the FBI; going in with the big boxes and coming out with the evidence. That was not a good day for the stock, needless to say. But they started looking at headcount and saying, “Okay. We run all these supermarket chains, who is non-essential.” And it says knowledge management right next to non-essential, unfortunately, if you work in a grocery store. But for me, it has a happy ending. Because at the time, I was about two thirds of the way through a full boat company sponsored MBA program here at Babson College in the Boston area, which is a great school. And someone in HR figured, “Hey, you know, if we let her off, she’s leaving with tens of thousands of dollars’ worth of graduate level education that we paid for.” And so they came to me and they said, “You’re going to be laid off, but what you would think is an alternative to that?” Maybe joining the not for resale strategic sourcing team, and I was like, “Yep, sign me up.” That sounds better than being laid off. And so that’s actually how I ended up in procurement. They sent me to not for resale, which is the sort of the grocery term for indirect spend. And that even leads us to our conversation today. Because me coming in as the newbie with no prior procurement or sourcing experience, they were like, “Hey, check out the new kid. She doesn’t know what she’s doing. We’re gonna put her in services.” And it was the biggest favor that they could have done me because it meant I never searched a product until I had sourced services for years. And so I instinctively learned everything about procurement, spend management, contract management, supplier management, in a services context, which I think actually has given me a huge advantage, career wise.
Jonny: 5:32 And when you actually did then come to deal with goods and materials, what was the contrast like? When you suddenly entered that world as well, was it a bit of a shock?
Kelly: 5:44 Well, it was interesting, because everything fits so neatly in the boxes. And I don’t want material sourcing to people to be offended. Like, I’m not saying that material sourcing is simple. But when you’re trying to capture, let’s say, specs and requirements for services, you’re talking about sort of ethereal things like time and skills. And it’s very complicated. And this was back in a time where we were still doing all the apples to apples, where everything from a sourcing perspective had to fit in a little boxes, and you wanted to have your spec fields and your unit of measure. And so it was very interesting to me the difference between the types of conversations you would have with suppliers and stakeholders around the material, whether demand, whether specs, whether how you define quality, versus the kinds of business outcomes and conversations you would have around a service. It’s just a fundamentally different thing to do. And I did get the opportunity later. I spent some time in consulting in a company called Antorus. And actually have my little Conway truck down here. They were re-blending their entire fleet. And so I have that truck, because those are the decals that we helped purchase and apply to the entire fleet. But then it’s also a great example of a crossover category. We ended up working with a company that could both print the decals on the wraps, and also apply them to the fleet. So you’re never really going to escape services when you’re in procurement. And I think that has only become more true as time has gone by.
Jonny: 7:19 Yeah. And it’s interesting what you were saying about the difference. Because there are nuances and complexities to both the goods or materials side, and the services are in different areas. So on the services side, there is - like you say - possibly more complexity around the capture of a requirement, and definitely more complexity around the measurement of an output or an outcome. Whereas on the goods and materials side, it is more complexity in some ways around the actual supply chain itself.
Kelly: 7:49 Absolutely. And the risk has a way of being further away from you. So now we talk about, if you’re in a material supply chain, is it tier one, tier two, tier three. It could be many, many tiers: international, geographically, far flung parts of the world where raw materials are actually being sourced. And then there is all of the transit journey that has to happen to get those materials. At least with labor, probably the service being delivered, hopefully, is in your own facility. In some cases, it may be in customer facilities. But you’re less likely to be talking about quite as many jumps away from the point of consumption.
Jonny: 8:29 So just jumping back a bit. In terms of your journey through your career so far, with Buyers Meeting Point, how has this kind of come together? And also, can you tell me a little bit about some of the other stuff you do? I can see the red phone in the background there. I know you do some interesting conversations yourself. Tell me a little bit more about that.
Kelly: 8:46 So Buyers Meeting Point was actually started with one of my colleagues from [Inaudible 0:08:50], USA. She had this idea to start a resource. It was actually almost 12 years ago at this point, to start an online resource, just bringing together the information that procurement professionals would need. I mean, certainly I have [Inaudible 0:09:04] have always been around. But at the time, LinkedIn had totally hit its stride. And so the online community thing was just starting to find its way. And we were trying to figure out how to pull together the best events, books, reports, even people, how do you reach the right people? And so we initially started as sort of a white pages. This is how you find the information that you need. But as those resources got more comprehensive, it became harder and harder for people to connect with what they needed. And so again, before it was a cool thing to say, we started curating. We would go through and say, “Okay, we will let you access all of the events coming up. But here are the two or three that we think are the most interesting, and here’s why.” Just to save people time and still help them connect with resources. And so that has evolved into something where - I’m very lucky - I got to go back to one of my first loves, which was writing. I’m also spending a lot of time doing content generation. I write as myself, opinion based pieces, or even fact base pieces for the companies that work in the space. And I partner with them to help them improve their content, because we’re also strapped for time. But the fact of the matter is, people ultimately want to make sure that the content they’re putting out there is authentic. And I actually think this is one of the things that impresses me. And, you know, everybody feels like they’re constantly being marketed to, but actually want to take a minute to kind of vouch for the service and solution providers that serve the procurement space. They have taken to heart the message that we are really tired of being sold to. What was being sold to? And so I can remember 8~10 years ago, having conversations about, you know, I know, you want to write another white paper about how great your platform is, but no one is gonna read it. So what’s the more interesting way we might come at this topic? What’s a more interesting way we might demonstrate your expertise in this area? I haven’t had to have that conversation in a very long time. And I think it’s elevated the conversation as a whole. I think it is allowed for better, more value oriented relationships between procurement practitioners and the service and solution providers that they buy from. And it’s made my work more interesting, because I’m getting to have these conversations, and listen for the little trends that I hear. I hear very interesting how things kind of bubble up. Similarly, from different parts of the industry, even as you get out into supply chain and logistics, the same trends seem to kind of rise up at the same time. And that gives us the opportunity to talk about a few key topics, but bring our very unique perspective to bear on how we approach them and where we go for help and the different innovative things that we’re willing to try. And so my focus has really been on making sure that procurement has the best content available to them, whether I happen to be writing it, speaking it, recording it as a video or helping somebody else put it out there and get a conversation started around it.
Jonny: 12:13 Yeah, it’s really interesting when I was going to, one of the things I was going to ask you about was just in terms of your kind of original literary background, and your interest in not just literature, but also you must have had some sort of interest in the organizational glut of literature, bearing in mind the original kind of librarian type activities, how have you seen that kind of applied to procurement? Obviously, it’s come in very handy now that you’re in this space where you’re really, content is so important, but when you were actually kind of, you know, within organizations, specifically running categories, etc. How did you find that apply to what you were doing?
Kelly: 12:52 You know, I think what it really comes down to is how you organize information. And there are two things that are sort of key to that. One is back to this idea of time. No one has any. Everybody will always push you straight to the point. If you think about sort of the typical executive summary format, regardless of whether it’s a category briefing or results report, they’ll say, “Listen, put the numbers right at the top. All I really want to see is the numbers.” But as we all know, the more strategic and complex the work we do is the more context is required to understand those numbers. And so I always enjoy looking for moments of tension. There’s a productive kind of tension that we can create with information. You want to make sure someone sticks with a report long enough to really get the meaning or the category briefing, [or] whatever this short document happens to be. But you also have to make sure that it’s not misinterpreted. So there’s always this sort of battle between giving people what they want, and making sure they get what they need in order to make the right decision. And I think that applies in terms of written content. I think it applies in terms of whether it’s podcast conversations or video conversations that you’re having with people. And it becomes increasingly important as we get into areas where maybe people are less familiar with what’s being talked about. If you go back and look at some of the conference agendas, they’ve pretty much been the same for like the last 10 years. But as we start to get into things, whether it’s talking about what we learned from the pandemic, whether it’s what we’re learning about some emerging technologies and how that’s changing our approach to things, or even some of the new operating models and organizational structures that are starting to appear in procurement, when you’re introducing a new idea or even a controversial idea, that has to factor into that tension. Because how people interface and think about really new ideas is different than how they simply get updates on other ideas. And so it matters the channel you’re using to communicate. But the same principles apply. And you really just have to think about, at the end of the day, its people consuming this information, and even saying people, “Okay, is it Frank? Is it Susan? Is it [Inaudible 0:15:11]?” Who is it that’s taking in this information? How do they best absorb it? How do they deal with new ideas? Every single piece of content has to be created to achieve a business objective. And that’s the same if it’s procurement, trying to convince the company to work with a service provider, instead of keeping people on salary in house, or whether it’s an AI powered procurement solution trying to convince people that there’s an opportunity to roll out chat bots to facilitate self-guided buying. It’s really our ability to understand people and pair our delivery of information. You know, how big of a bite can they handle? What piece of information do they need in what order? What is sort of the idea nurture process have to be like? It really is an awful lot like sales; you trying to win people over to things.
Jonny: 16:03 Yeah. I find it so interesting when you put that in the context of buying a service, because it’s so complex. And the communication is such a massive part of it. Writing the requirement or procurement triage requirements or just having an approach to this is how we should be engaging our services suppliers, because so much can get lost in translation otherwise. And I think for with the kind of growth in the use of outsource services, and there are definitely stakeholders within organizations that they can handle your job spec, although in most cases not particularly well, not in my experience. They can handle what no one likes writing a job spec. But people can write job specs. But when it comes to defining a deliverable based requirement, that’s a completely different problem to solve. And I think, in terms of the skills that you see within procurement departments, obviously, negotiation, relationship building, all of these sorts of things and lots of important factors, but communication is such a key one. And being able to communicate in a written format, where things then end up becoming shaped requirements that then sit within contracts that then have genuine deliverables that can be measured against is such a crucial thing to get right that, I think, it’s maybe a little bit of an underestimated skill.
Kelly: 17:27 I think it is true. And I think all of you at some point, probably had your mom give you the advice. Like, “Don’t say or write something if you don’t want it to appear on the front page of the newspaper.” That’s sort of like common sense. Thanks mom, just before Mother’s Day. But I think it’s even more true in our digital world. So most people today aren’t picking up the hardcopy newspaper. So maybe that sort of thing has started to lose its effect a little bit. What I think we need to remember is that whether you speak something, whether you write it down, whether you put it in an email, text, slack, [or] all these different channels we have, once you hit send or enter or the little paper airplane, it’s not yours anymore. And every single message... That’s back to that idea about information versus context. Every single message, that information gets separated from its context. It can do extreme bad. It can create misunderstandings. It can break down relationships. It can cause enormous business problems. And so from my perspective, I think, we have to be very detail oriented. I’m that person. My kids tease me, I’m that person that does like punctuation in text messages, which I know is not cool. But I think it’s my mindset about the power of information. And I think it’s easy, because we’re so busy. And we’re pressured to move so fast and have a voice in so many places that we don’t stop to think first about where is it going? Who are all of the people that are going to see this message? If I’m not specific enough, how might they interpret this? Now back in the days of the orange envelope with a little string that went around the circle, and things were on distribution runs within buildings, you had a much more predictable sense of sort of the lifespan of a comment, of an email, of an analysis. But now it’s as simple as downloading, forwarding. It gets posted to a Slack channel. Someone comments on it on LinkedIn. Our relationship with information has to be so much more personal, and it has to be more thoroughly researched. We need to really stop if you change anything. Give yourself the pause before you hit send, before you hit enter, give yourself the pause and think about it. Because procurement is increasingly being looked to as a source of insight and intelligence and advice. And so every single piece of content that comes from our team has to be aligned, has to be professional, has to be well researched. [It] doesn’t meant things aren’t going to change. I mean, if I have done a... Let’s say, I did a category summary on business travel at the end of 2019, I might have made some predictions for 2020. That ended up being hideously wrong. It doesn’t mean that I was wrong to put those predictions in writing and distribute them, because it’s a conversation and it’s an evolving situation. It does increase the importance of putting dates on things. I will point that out. It’s very important for people to know when something was published. But we need to make sure that at least for the moment, and for the purpose, and for the audience, all of our information is going to achieve what it needs to. And sometimes that requires more time, which is a hard discipline to stick to.
Jonny: 20:42 Yeah. I always feel, with the procurement profession, there is an element to the role, there’s an element to the industry, which kind of crosses over with legal, obviously, there’s loads of contract stuff that you’re dealing with. But it’s like backing things up, evidencing stuff, all the basics. And I had an interesting conversation with a guy called Mike Lander recently, talking about negotiation within services procurement. And just the preparation he was talking about. You know, if you’re selling to procurement and you go in there unprepared, well, it’s probably not going to go that brilliantly for you. Because the procurement professional, the other end may well have prepared very, very well. And again, it comes down to information. But just going back to what you were saying about people sharing content and it just being authentic content and interesting content, people have got interesting things to say. People have got great expertise that they could share. And I think when you look at communities, in specialist areas like procurement, for example, there is really interesting stuff that can be shared. And as you say, organizations don’t really need to be banging the drum about exactly what they do. But if they’re engaging in interesting conversations, then just purely from a credibility point of view, it’s good for them. If they’re engaging in conversations, people are seeing what they’re writing, seeing what they’re saying and think, “Okay. Well, these people are reasonable bright”, or if I’m lucky, “reasonably bright.” And I’ve got an opinion, and I’m actually thinking about things in the industry, and people do want to hear. I think it’s more authentic. Because everyone is fed up or getting sold to, we went down through the lock downs. And there were just a million webinars, which are effectively just sales pitches. But there’s interesting things happening. There’s lots of strong triggers driving change in the world moment, obviously, COVID. All the knock on effects of COVID have caused a huge amount of upheaval and change. The effects of which will be felt for many, many years. It has change the world without a doubt. And there’s more interesting things to talk about. And I think people are still going to end up having a problem to solve. And within all the information they’re taking in, they may then become aware of people who can potentially solve that problem. But the value is in contributing something productive that might be useful for other people.
Kelly: 23:10 Yes. It really is. And I think that’s the best thing both about to me being in procurement, and even focusing on services procurement. Because I’m sort of your classic people watcher. I find people fascinating. And there’s a part of me that’s always so pleased when someone genuinely does something that’s a surprise. And that could be in my personal life. I’m not a surprise party person at all. So please! But when someone says something or does something, and you think, “I really did not see that coming.” Or you’re in a meeting and someone out of nowhere asks this question that cuts right to the heart of the matter, or brings up something that nobody has thought about somehow, all the way through the process. There’s like the spark of magic to that. And I think that creates opportunity. I think the same thing has been true in terms of seeing how different people in organizations have adjusted to working from home, or the different types of challenges around finding supply, or ensuring the safety of workplaces. There are so many variables that the opportunities never exhausted, you know, to a certain extent, with some materials categories, you can get to the point where, “Listen, we’ve done efficiency, we’ve looked at specs, we’ve considered alternative materials, we’ve changed the machinery or the service maintenance programs, so that we’re absolutely running at the lowest bit of waste and loss possible.” And you kind of get to the point where you say unless we innovate this material away, there’s only so much more we can do here. But with people, the work is never done. You’re never going to source it or approach it or even deliver it enough times, that there’s no more opportunity. There’s always that variability associated with people. Same thing is true of online communities and conversations. You know, people say all the time, like, “Oh my company doesn’t really like me to go out there and share. But I’d like to engage.” So ask a good question. A good question to me is sort of like how a picture is worth thousand words, a good question is just as valuable as coming out with the most brilliant proclamation. In some cases, I think it’s more important, because it shows that you’re willing to, first of all admit there’s something you don’t know, that’s always sort of endearing. But then it pulls other people in. It has a way of getting other people involved, and then ending up with a better thought or a better statement at the end of the day, than if some person comes out and says, “I have the answer to this and no further conversation is needed.” That’s not sort of the greater good. And so to me, it’s ultimately the variable of people, how everybody chooses to handle things, how everybody chooses to interpret things that keeps the work that we do so interesting.
Jonny: 26:02 Yeah, it’s interesting what you’re saying about the questions. I mean, if somebody sends me a text message, that’s effectively just a statement. I don’t reply. Ask me a question. It’s just a statement. So when you’re talking about the input from different people and that just someone can surprise you, I think this is for me, is where there’s the real value in diversity. Now, diversity is obviously, it’s about fairness. But it’s also about the fact that people from different backgrounds, people with different ideas, people with different experiences, people from different places, etc., etc., etc. They can all shine a slightly different light on things. And I really like seeing where organizations appreciate that, from a commercial point of view and a strategic point of view in the sense that they’re not just doing a box ticking exercise, they’re realizing that diversity is what makes the world go round, because it’s just all the different ideas, all the different people. And so there’s huge power in that. I also think there’s huge power in leveraging that diversity within the supply chain, as well, as an extended part of that kind of overall workforce. And obviously, the same applies on the kind of goods and material side as well. But I think specifically within services, where organizations are, it’s a people orientated scenario, delivery of work scenario. And it allows that direct input and allows a range of different inputs from different specialist suppliers or suppliers in different backgrounds. And suppliers have different makeups. What’s your view on how organizations could or should be leveraging that versus how they maybe are?
Kelly: 27:55 So, I would actually say this is one of those areas where procurement has both a massive opportunity and a huge problem at the exact same time. So, as you just said, very well, we’re trying to achieve all kinds of diversity. And there’s a lot of research that proves that more diverse workforces are better at problem solving, more diverse supply chains are more resilient. There’s all kinds of correlations and tangible benefits to that. So procurement is a huge opportunity to be on the right side of this and really lead change. And we can do that through looking at company ownership. We can do it by looking at the location of companies, we can do it by looking at boards of directors and the diversity of their workforce. So there’s all of those ways we can approach it. I think the problem that we have and I’m going to throw myself right on the pile on this because I am definitely your stereotypical procurement thinker. We say, “Okay, this is what we need to do. So we need metrics. We need frameworks, we need boxes to check, we need certifications.” Somewhere in all of that, the spirit of what we’re trying to achieve has a way of getting lost. And I’ll actually use a... This happens to be a public procurement story. But it’s true right here in the Boston area. The state of Massachusetts was contracting for service. And because they rightly wanted to make sure there was diversity in the supply base. They said, “Okay, if you take on this contract for us, it is a services based contract. You know, X percent of it, I don’t know, 30% of it has to be either subcontracted or supported from supply chain capacity by a certified diverse supplier.” Great. Well, unfortunately, here’s how that played out. One of the suppliers who submitted a very competitive bid said, “Yeah, no, we’re not gonna do that.” And they explained in the proposal, why they weren’t and so they lost the bid. And that might seem fair on paper at the highest level, but problem was the reason they said, “We’re not going to sub that out. And we’re not going to do that,” is because that supplier was a 100% woman owned business and because they said, “No, look, if you do the business with us, a 100% of this contract goes to a certified diverse supplier. But because the system was set up for procurement, to say, “Okay, did they check the box? Did they say yes to question 42 part C?” Because the answer to that was, “No,” nobody dug into the details to read the comment to say, “Hey, guys, did you just happen to notice 100% of the spend would go diversity in this case.” To me, that’s a cautionary tale that has always stayed with me, because we’re trying to achieve so much so quickly. And in order to do that at scale, we have to have some of these frameworks, we have to have lists of pre-qualified diversity suppliers. So we have to have targets or reports. But at the end of the day, it’s a people problem. And it’s a people problem that has to be solved by people in a somewhat inefficient way. I think sometimes if we completely emphasize efficiency overall else, we have a way of driving out the messy secret sauce that actually makes things work better. And so, it’s again, just like the pause before the comment on social work, sending that email to your boss. It’s the pause saying, “Okay, we’re trying to create this system. Is it accomplishing what we need it to do? So we’re gonna try, we’re going to build a report, we’re going to build a dashboard, we’re going to set some targets. Let’s three months in six months in,” how is this actually playing out? Are we making progress? Are we having the conversations that we need to have internally, I mean, so much of it is around language and procurement, having the words to have those conversations. And hey, I’ll be the first one to admit, again, dealing with people, I love people, we’re messy. That’s what makes us fantastic, sometimes talking about these diversity related topics, makes us nervous, if we don’t have a lot of experience doing it. It’s not a reason not to have the conversation. And it’s not a reason not to make progress. But it does make it incumbent upon us to get the education we need to have the relationships with people to say, “Hey, listen, you know what? Keep me honest here, I’m trying to do the right thing, here are our goals, let’s maybe define the terminology that’s acceptable. Let’s define some of these acronyms and make sure everybody knows what they mean.” To me, and maybe it is my writing background, I always go back to the power of communications in actually effecting change? And I think sometimes, it’s almost like if we try to roll things out too far, too fast, we don’t get anywhere at all, we would be better off going a little bit slower and having it be a little bit unsteady. But actually making some gains. I think at the end of the day, that’s what’s going to separate the companies that pay lip service to this notion of diversity from the companies that get in the trenches and do the work and have the conversations and make a meaningful difference in all of these different communities that they’re trying to access.
Jonny: 33:20 Yeah, I thoroughly agree with you. And I think it also has a bearing on innovation. In the sense that you know, where you are dealing with more diverse suppliers and more diverse viewpoints and cognitive diversity amongst everything else. Almost experiences, backgrounds, whatever it might be. It’s all adding to the ability to create new ideas and have a different viewpoint on it. And I think, for organizations that try to formalize it too much, that becomes very difficult, you can’t really force these things. And I think when an organization is looking at it supply chain, particularly on the services side, where there’s generally very poor visibility, particularly of the smaller suppliers, there could be some real gems within that supply chain that aren’t being appreciated or that aren’t really understood properly. So I think you’re right, certain things need to have a structured formulaic approach. You have to have structure particularly within big organizations, but within that there needs to be these people interactions and this is something that procurement have a real opportunity, as you say, to use their people skills, which procurement and all great organizational skills, but also fantastic people skills generally, to be able to understand suppliers. And I had a conversation recently where someone was just really driving home the point that innovation doesn’t work very well if you just sat down there and had a quarterly business review of the supply absolutely hammering, driven the cost download itself and said right, “Final point in the agenda. What’s your three integration points for today?” It doesn’t work in that kind of like conflict type situation. So I think information is something that’s very important, to surface the information, what suppliers have you got? What’s happening in your supply chain? What work is going on that maybe you’re not getting that much visibility of? But as procurement, you need to understand what that is because there might be some really good opportunities that you’re not taking advantage of in other areas. But also it needs to have those relationships to tease out the valuable things as you say, the example you gave. It’s kind of, it’s nuanced. And it has to have the opportunity to have nuance there.
Kelly: 35:41 Absolutely. And innovation is supposed to be messy. I mean, if it were easy, then it’s not innovation, then it’s just a linear progression of what’s already being done. “Oh, look, kids like bread, kids like bread more without crust on it.” So we’ve invented a way to make bread that has no crust. That’s not innovation, right? That’s just taking it the next step and doing sort of like a market testing type thing. For innovation, I always, mentally the image that always comes into play for me is that scene from Apollo 13, when they’re trying to figure out how they’re going to get Tom Hanks home and they dump all the parts on the table. And they’re like, “Listen, geniuses, this is all they have, fix it.” And in some ways, I mean, they were forced to do that by the circumstances. To me, that’s innovation. And in some cases, we have to find ways as procurement teams, as companies, as partnership pairs, us, with our suppliers with our stakeholders, say, “Okay, listen, what does everybody have they can throw on the table? Bring some piping. Bring your cousin, okay, he’s got a box of Oreos, like we’ve got this problem. And we’re trying to solve it in a different way than anybody has ever solved it before.” And not only do you need to know what every single person’s resources are, you need all those different perspectives, you need somebody to go like, “Okay, hey, if we can sell the Oreos and then...” You’re all going to come to that differently. Everybody has different experiences that has brought them to procurement, I think that’s one of our great strengthening factors. It’s not this, it’s not the bread without the crust. Nobody grows up and says, “I want to be in procurement when I’m older,” and then follows the, “Okay, that means in high school, I do this. And in college, I do this, and I do that grad school program,” and good for finance and good for marketing. They’ve got that figured out. But procurement, we’ve got somebody from operations and somebody from logistics and somebody from finance. Oh, and we also probably have an art history major, we may have somebody that was a philosophy student, put all that on the table. Because at the end of the day, we’re trying to solve problems that require engineering, that require cost modeling, that require human interaction, that requires strategy and sales skills and the ability to influence. And I think if we can find some way to go back to that productive tension between our desire to organize and create frameworks and make it very structured, with sort of the fact that all the parts don’t necessarily line up. That gives us a natural advantage. If we can find the energy and the time to be creative, it gives us a natural advantage to solve some of these enormous problems that go far beyond supply chains and far beyond, “What exactly? How much does it cost for us to put this product on the shelf?” This is where we’re getting into area of having all different kinds of community impact, which is incredibly powerful.
Jonny: 38:45 Yeah. The amount of people that have said to me, “I kind of fell into procurement.” Like everyone else kind of fell into the procurement. But no one’s ever made that point to me before. And I think that’s a brilliant point, in the sense that inherently, there is that level of diversity in the procurement world, because it’s not a set track. So people are, to a certain extent falling into it from different places. That’s a really, really good point. I think, another thing that this brings to mind really is so we talked about the value of diversity in the supply chain to bring in different ideas, innovation, work in different ways but there’s also, you also mentioned about kind of honesty and probably my favorite word when it comes to business, which is pragmatism, I love pragmatism, what’s the objective? Let’s all work together to get there. It’s not really about egos. And I think so when you’re talking about the honesty. You might not be right, but let’s put it out there and let’s work towards the genuine goal and that’s a genuine, the right sentiment behind what you’re doing. And there’s such an opportunity on the services side in particular, with input where, I’ve heard you use the phrase before this outside in perspective, that I think this is a gray area. Because if you particularly look at services applies, so there might be a consultancy, they might be a very specialist technical provider, they might be rolling out a new software or new computer system, for example, but in a lot of cases that in your business and in a lot of cases, they might be legal services and they might be looking at how you do business, they’ll be seeing some really thorny problems that you wouldn’t, that are just under the legal confidentiality, but you wouldn’t expose them to the world under any circumstances. So these suppliers have got so much information on what’s going on in your company. They see the people that they’re working alongside, they see the stakeholder groups, they see the meetings. Do you think companies are taking advantage of the potential for that outside and feedback enough?
Kelly: 40:54 Not even close and I think the problem is twofold. But, first, I think, to make your point, I like the legal example. And I think one of the things that people may forget about services is that, obviously, within the days, when we were all going into the office, you didn’t have like, “okay, the person doing the legal services, we’re going to make them wear blue hats, because we want to be perfectly clear that their external,” when a person is in a role, their willingness to do the very best job that they can do at all times and elevate issues has less to do with who signs their paycheck and more to do with the environment that they work in. So if I’m an external service provider, I don’t know, am I going to do less of a job? If I see something worse, I’m going to document or I see that something’s about to expire? Am I not going to say something to you just because, “Oh, well, it’s not technically something that I have to do.” And so that, again, is an advantage in the services area, where at the end of the day, people are just people filling a role. And as long as they feel valued and as long as they’re appropriately compensated, you’re probably going to get the same kind of information from them, regardless of where they actually work. But that really comes down to two things. And this is my twofold problem about the outside in. One as procurement is not asking our suppliers often enough, “What else do we need to know?” I think a lot of meetings with suppliers are just like that QPR that you talked about, where we yell at them for 45 minutes. And then while we’re looking at our watch, we’re saying like, “Okay, quick, give me three innovative ideas.” That’s the wrong balance of time, there should be more of us saying to suppliers, “What else do we need to know?” And as actively listening to what they’re telling us, even if we don’t like what we’re hearing, that information is gold. So we want to have the kind of relationship with our suppliers, that ensures that we are pulling from them every single observation and bit of knowledge, that’s enormous. But the other one is even more important. We need to have the kind of relationship with our suppliers, that causes them to proactively approach us with opportunities and problems that they encounter in the course of doing their work. And that’s back to the person that’s outsourced legal, who noticed is something and maybe is not obligated to say something. But if you’re doing a good job in the role, you’re going to say something. And that brings us back to how do we structure our contracts? Are we being a pain in the neck down to every single character and spelling everything out? Or are we finding a way to create contracts that appropriately encourage and incentivize service providers to come forward? And then how do we respond when they tell us things we don’t like? Nobody wants to be yelled at. Nobody wants to be derided. And so people also don’t want to be ignored. So if someone takes the time to elevate something or to raise an opportunity or to voice a concern, we need to deal with that appropriately, regardless of what else is going on? Doesn’t matter if it’s slightly outside our scope. That is something that we need to take advantage of. And I personally think that’s a huge untapped area of opportunity, that’s sitting right there. It’s right there. We have our work that we do and this is not exactly part of it, but it’s so close. That’s an opportunity for value creation. We don’t need new technology, we don’t need another process. We don’t need a title or a commission. We just need to listen, we need to make time for what our suppliers say. And we need to actively listen to what they tell us and then work with them to put it into practice. Because then they’re shared ownership and it’s more likely to successfully get carried out.
Jonny: 44:43 Yeah, I think it’s a fascinating area. I think you made some really good points. When you’re talking about the role of procurement on this side and you were talking about the way that contracts might be structured, etc. So if we look at post contract signature in terms of what typically happens, and yet what could happen in terms of procurements role within the delivery of services? And this is maybe an area that gets kind of, this is something that kind of gets dropped quite quickly in a lot of situations that I say.... Why do you think that is? And what do you think organizations, not necessarily procurement teams, what can organizations do to encourage that, post contract signature to really engage with suppliers?
Kelly: 45:32 I think the big thing is procurement needs a better relationship with the business. Because so many times we get the contract signed and the business is there and the suppliers there and everybody’s happy. And then the first thing the supplier and the business both say are, “By procurement,” like we don’t need you anymore, we’ll call you for the QPR. And on the one hand, that’s the way it’s supposed to work, we’re supposed to disengage. But I think in some cases, they’re in such a hurry to get rid of us. And we’re not integrated enough with them to know when we should re engage without those very sort of clunky formal cues. I mean, it’s great from a due diligence standpoint to have quarterly business reviews, that’s awesome. I mean, maybe not all contracts justify that maybe sometimes it’s annual or semiannual, but whatever the frequency happens to be that works. But that’s not how the real world works. Like, “Oh, well, we’ve already had our one supply chain failure for this quarter. So no more supply chain failures.” Things happen when they happen. Opportunities are seen when they’re seeing, competitors are going to be acquired or acquire other people, the landscape shifts every single day. And to a certain extent, it’s about mindset. Do we hear about the idea of risk and brace? Or do we hear about the idea of risk and say, Okay, this has shaken up the playing field, this is an opportunity.” And I think it’s very much the same way in following what’s going on? Suppliers are 100% more tapped into it than procurement is, but then the business is typically even closer than we are. And it’s about making sure that the information naturally flows so that we know when to re-engage, we’re staying informed. And this has become more of a challenge. As an increasing number of procurement teams have gone sort of generalist, where you don’t have like, the marketing lady and the logistics guy and the packaging person, then you’re kind of in this narrow little category vertical. More and more teams now are, “Okay, here’s our analytical pod. Here’s our strategic sourcing team. Here are categories strategists or negotiators.” We’re kind of breaking things up differently, which makes it harder to maybe notice that, “Oh, I don’t know, lumber has gone to 400 times what it typically would be,” there’s a severe labor shortage among truck drivers and how does that affect us? If you’re not living the category, it’s much harder to stay on top of those things. And to know, “Okay, probably shouldn’t wait for the QPR to raise this point.” This is a now kind of question. And those end up being the things that once the contract is signed, and hopefully put in a system versus being shoved into a filing cabinet, we have to know those opportunistic times to re-engage or someone has to be willing to pull us in. And that all comes back to relationships and how we handle things and how we have responded in the past? And so right now, I think we’re building our legacy. I think we are building a new procurement legacy right now. We did a good job last year. I mean, seriously, last year was hard for everybody. But we did a good job. And right now things are still kind of uncertain. But we have to keep at it and keep doing that good job. Because this is the moment when we are building the legacy that we are going to be cashing in on in 18 months, in five years, in 10 years, this is going to be the moment that procurements relationship with the business change. We didn’t get to pick it. The pandemic did not wait for the QPR like we wanted it to, it just came in and suck us straight in the face. But now that it’s here, it’s sort of like, “Okay, rather than bracing against the risk, what do we make of this? And I think it’s a huge opportunity to reset those relationships because that’s what allows us to turn those contracts into the intended value that the business had in mind when we started down that road.
Jonny: 49:28 Yeah, I had a really interesting conversation with the CEO of Cantar recently, and one of the things that he was really driving at, which is very similar to what you’re saying is, it was the relationship with the business, particularly at the sea level, saying that, “The chief procurement officer, this is a really strategic member of the C suite team and they should be recognized as such,” and what you’re talking about there in terms of the opportunity, when you think about how much data and insight and access to Information sits within procurement, they’re looking outside, they’re looking inside, if they can, particularly if they’re, like you say, not just sticking your contract in a repository of shared file somewhere and never looking at it again, if they’re using systems, if they’re capturing processes effectively and they can look at every in-services of that, every project, every mile, so if they can see stuff in real time, then they can flag stuff before it goes wrong. They can identify positive benefits. There’s this whole beautiful road through to return on investment and value and things like that, which is the kind of panacea, but there’s a real opportunity with the leverage that procurement can potentially have, just by controlling that information. As you say, COVID is just really pushed out to the top of the agenda, where there’s the companies have been in emergency situations, governments have been in emergency situations and procurement teams have had to be innovative. And do a kind of like Apollo 13 type scenarios to make things happen. And so you’re right, I think it really is a watershed moment and a real opportunity. How do you see that playing out with the kind of attitude within C suite boardrooms, particularly when you look at things like for example, when you’re dealing with high level consultancy? Quite often procurement aren’t involved in that at all.
Kelly: 51:22 Yeah, it’s interesting. And I think this is an interesting moment for that conversation. In addition to obviously, following the procurement space, I kind of, I generally speaking, follow communications, because a lot of times there are tricks and tips and best practices that you can move from one space into another. And last year, I actually read this very interesting report by one of the biggest press release companies in the US. And it opened with this statement about, “This is the moment that CEOs are turning to chief marketing officers and chief communication officers and asking them to step up and add value and make a difference.” And I read the executive summary and I thought to myself, I thought they were coming to us, I thought this was the moment that they were going to see POs. And I really stopped and thought about it. And I think, because last year was so unexpected, there was no shame in the C suite knowing, “We don’t know what the hell to do.” Because nobody did, that was the only honest, authentic thing to say, “Listen, we’re drawing a line right now, in this moment, we have no idea what to do. One minute from now, we’re going to have started the journey of figuring it out.” But I think what that report made me realize is that the C suite is uniquely open to input right now, because nobody could expect them to be prepared for this. And so they’re willing to say like, “Okay, all the stuff on the table, hey, this pipe, let’s try this,” there’s no one’s going to be angry with them for not experimenting, they’re going to be angry if they don’t attempt to experiment to solve the problem. And so they’re open to what we might say right now. But that goes across all functions. And so not to create a sense of animosity. But I do think back to the idea of healthy tension or in this case, maybe healthy friction, we do need to be aware of the fact that the C suite is increasingly open to input from every single function in the company right now, their job is to find the best idea, no matter where it came from, vet it and put it into practice. And so we want to be a part of that engine. And whether it’s with the market insights that we have access to, whether it’s intelligence that we get from our suppliers or whether it’s, “Hey, I’ve never been through a pandemic before. But I did such and such when the tsunami hit Japan.” Everybody has some kind of experience to bring. But then I think that brings us back to the communications piece, it’s not enough to have a good idea. You have to communicate it in the right way. You can’t hold it back until it’s perfect, you can’t hold it back until it’s clear that that’s 100% the right thing to do. So there needs to be a fast process for enriching, cleansing, testing, improving ideas, grab a bunch of people within procurement, put the idea on the wall and let everybody throw everything they have at it. But it has to be fast, because that idea has no value until it’s put into practice. And the sooner it’s put into practice, the better. So I think we have to be focusing on creating this huge volume of ideas and information and insight. But forcing those ideas to duke it out before they get elevated. Because just as much as procurement saying, “Nothing to the C suite,” us flooding them with a load of crap is not going to do us any good either. And so we have to build our own internal process for, we have to create a bracket, what are the ideas that get to the top and you will sort of this constant flow of ideas coming in. And you want this constant pressure and testing of those ideas, so that they’re improved and in some cases combined. And then we find what the right opportunity is? What’s the right member of the C suite to take this idea up through? At the end of the day, the most important thing is that it’d be implemented. And so let’s figure out sort of the political landscape with the people in the C suite, who else has something going on that we can maybe join forces with, this is also not a good time to play games and say, “Well, procurement doesn’t get full credit, then we’re not delivering the idea.” Big mistake. So if you know you can get an audience that’s more likely to act by pulling in a chief supply chain officer or pulling in marketing or finance, do that, let them be part of the idea vetting process, let them add to it and then elevate the idea. I think that’s incredibly important. It’s scary. I mean, that’s the truth of it, it’s a scary thing to do. But it’s something that we need to do, we need to do with the right attitude. Because this is our positive value oriented opportunity to change the direction of a company and this door is not going to be open forever. So we need to be actively thinking we need to be actively looking for an ideas, nurture every single good idea. And then the best ones get bubbled up to the C suite. And along the way, we’re forming new relationships, which sort of circulates the value back down to the other work that we’re doing. So I think this is a critical moment. I agree with the CPO that you’ve spoken to, this is a critical opportunity for us. And I think there’s a lot of good to come from it, I had the opportunity to interview the CPO of New York City of all places think about the [inaudible 00:56:44]. And [he talked] about what they had to do to get PPA. And he’s like, “We’re dealing in the black market, we’re dealing in the gray market, it was disgusting and skeevy and sketchy. But we did what we had to do to get the materials. And now we have an appreciation for the processes that we followed before. We don’t ever want to go back to this place again. But because the circumstances called for it, we did what had to be done. We didn’t say, “Oh, it’s not part of the process for us to do it this way.” Under some circumstances, that’s just not how it works. So it requires courage and a lot of hard work. But as I said to you, we’re building our legacy. And I have absolute confidence. There are brilliant people working in procurement, whether they intended to end up here or not. And if we all put our heads together, I think this can be an incredibly positive moment, especially as we start to move through the reopening and into things, maybe not going back to normal, but moving to some kind of new or next normal.
Jonny: 57:45 Yeah. And I think it emphasizes to me also, so within that decision making process that you’re talking about, it emphasizes to me the importance of data and insights. And I think that’s something that procurement teams, particularly in services, where it’s really complicated, really nuanced and massively lacking. Because if you’re going to bubble up the ideas and you’re going to come up with the best ideas, you’ve got to verify them, it’s got to be evidence based decision making, especially when you’re going to the C suite, they want to see some backgrounds. Have you thought this through? Have you have you had your legal head on? And then kind of referenced this stuff and worked out, used to put some numbers and some metrics and some information behind it. And I think that’s a critical thing that procurement teams have got to solve as part of this. Because otherwise, you’re still stuck in the scenario that exist at the moment where actually chief financial officers will often say, they’re just looking at budget when it comes to services, because they don’t know what they got. So there’s no emphasis on value. And if you slash your services begin budget by 30% to save money, you might be really harming the business because that services spend might be really driving the top line, really driving profit. And unless you understand that, you can’t do that effectively. You can’t make those sort of decisions effectively. You’re just saying, “Was it a budget? Was it not slash the budget, raise the budget,” whatever it might be. And that’s just, it seems so primitive, particularly when a lot of these services are business critical. They’re extremely complex. And the amount that’s spent on outsource services, somewhere between trillion and 20 trillion globally every year, surely it deserves that focus. And okay, it’s not easy. But surely it’s worth it. Because even just when you look at it from a cost saving point of view, if you really understand what you’re spending, you might see that you’re spending stuff with a supplier that’s not really delivering anything or the supplier is doing a really bad job. But if you don’t have visibility of that, procurement are removed from the situation of power. Because if the business stakeholders can see that and maybe they’re covering it up or whatever their own motivations are, procurement I’ve removed from that situation, as we talked about before it might be getting involved to the point of contract signature, and then being kind of maneuvered into the background and I think procurement can capture data. And they can get access to data without getting in the way, as such and adding to the process rather than. Sometimes, business buyers will want procurement to get out of the way, “I don’t want to have to do this, I don’t want to have to do that.” And if you can make things easy for people to carry on interacting but just capture the data, then procurement are stewards of that data. And they can be the conduit for the C suite to basically manage this process, manage this extended workforce capacity, in the sense that they might be scaling up, they might be scaling it down, might be putting controls on, letting it happen, and just read the data, all of these things. And I think there’s a huge dearth of information, particularly in services. I think, good materials, they got it pretty well buttoned up, because it’s a much more binary scenario. But again, it comes down to the nuances of services, how do you measure an output? How do you measure an outcome? There are quantitative aspects to how work is delivered? How services delivered? That’s typically around things like was it on time? Was it to budget? How far did the scope creep? But very importantly, it’s quite a qualitative factors as well, in the sense of does this apply to a good job? As a business stakeholder am I pleased? Did they exhibit great sustainability? And was that fantastic innovation? Whatever factors it might be those qualitative and quantitative pieces of information can be combined and used incredibly, effectively by procurement. But I think that’s so far been a hugely missed opportunity. As I say, particularly when you consider the level of spend there is.
Kelly: 1:01:49 Yeah and I think if we don’t include services, in the move towards sort of self-guided buying, the problem is going to explode. Because it is so easy now for distributed buyers in an organization to find different creative ways to contract for services. I mean, there was a time when things were so manual, that if it didn’t go through sort of the traditional procurement, finance, AP kind of thing, you can’t bring in a contractor, you can’t access services, services take all kinds of forms now. And it’s very easy for anybody with like a company P card, in some cases, to sign up for a basic service package, depending on what they’re looking to do. And so rather than saying, “No, that’s wrong, that’s outside our process, you’re creating risk.” Then you’re just like teaching everybody to hide it better, we would be better off kind of throwing the gates open. And like you said, saying, “Hey, listen, we need to know what’s going on. This is very, very important for all these reasons. And so instead of making it harder for you, we’re going to make it easier for you. But that comes with two things. We need to have visibility and you need to take responsibility, because I think there does need to be this sense of why do we want someone in some corner of operations, hiding the fact that they have a service provider, that’s not doing a good job, simply because they don’t want to be in trouble for picking the wrong service provider. That’s a problem that needs to be fixed. And we can fix it easily. But if they don’t know how to approach us for help, or if they’re just simply trying not to get in trouble, that problem is going to linger. And the longer they cover it up, the worse it’s going to be.” And we also saw plenty of instances over the last year, procurement has the tendency to do the 80 20. Because 80% of our spend is with 20% of our suppliers, that’s where we’re going to focus 100% of our time. But if you have a critical supplier that happens to be down there, in that tail, and they’re small, it doesn’t matter if they’re a product or service, if that small supplier is critical to your operation and they don’t come through, nobody cares what number they are, when you line all the suppliers up by spend, it doesn’t matter, that was missed. And so my tendency would be even if it feels against our instincts, even if it feels scary to democratize, to consume arise, all of these buying processes bring more people into the fold. We need to have supporting systems because we do need to be guarding against risk. And we need to know who provides what service and what location? Who do we contact if there’s a question or if something goes wrong? But the more we can open things up. In a way we’re actually recruiting more people into procurement. Most consumers in their personal lives make amazing decisions with spending money online. I think just like procurement has earned the trust of the organization and particularly at the C suite. I think we have to think about distributed buyers in the organization as having earned the trust until they show us otherwise, that they can also handle more freedom. And yet if something does go wrong, it’s a great deal more complicated to deal with the service performance issue than it is to say, “This decal is the wrong shade of blue or this widget has the wrong sized, hole on sign.” So then somebody needs to get involved. So the people are being handled in the right way. But I’m always of the feeling that more access to information, more access to choices, but with the tradeoff that you take responsibility, I mean, we’re all adults in these organizations. And that’s how we have to be able to solve these big complex problems together.
Jonny: 1:05:26 Yeah, do you think that when you were talking about this situation of giving more credibility and maybe more freedom and trust to distributed buyers, do you think that would be a lot easier if the information was if you could let them get on with it? But if you could see what they’re doing, it’s not an intrusion, it doesn’t have to be a strict control. But if you can see what’s going on, then your duty within procurement is to make sure is, to help the business do what it needs to do? And that includes helping this distributed buyer, get the result that they wanted to get. So I think the thing with services is, you’re basically saying to a service provider, “I’ll pay you X to deliver Y.” And when you say it like that, it’s quite simple. Obviously, it can become hugely complex. But it’s still a question of, “What did we agree that you were going to do? And did you do it?” And I think, because things change over time, because things often aren’t captured. Because top level systems are just kind of too big to get into the granularity of this sort of stuff. We’re not specialized, that sort of thing gets lost along the way. But for a distributed buyer, if you could see what they were trying to achieve in real time, see how they’re getting along with it. Maybe that gives procurement, the opportunity to just give much more free rein, we’re seeing much more people move towards a self-service type model, with procurement having oversight, because if you’re capturing the information, and you’re allowing this flow to work on impinged that seems to operate really, really well. And particularly when you’re making it easy for suppliers as well. So yeah, do you see a model where, I mean, I personally, I’m clearly biased on this. But I think automation has to happen around the buying and management of services, more automation, to really capture those workflows and capture milestone based deliverables. Do you think that would give procurement more freedom, allows them to relax and let buyers just get on with it a bit more?
Kelly: 1:07:29 I don’t think we’re gonna relax. I think we’re all gonna...
Jonny: 1:07:32 Maybe I used a wrong word.
Kelly: 1:07:32 ... Have a paper bag for a few minutes. No, I don’t think we’re gonna relax. But I think it’s the right thing to do. We talked about the difference between linear progression and innovation and it has to be messy in order to be innovation, there has to be a feeling of discomfort, before there can be actual growth. And so I think that’s the way things are going. I think procurement needs to get ready to facilitate it or we’re going to get knocked out of the way. But I think even to go back to your question about data, I think even that’s sort of twofold. Yes, data needs to be good quality. And the systems that connect people to good quality data have to be easy to use. But there’s also the second piece, which is, again, the fabulous thing about people, it’s not enough for the data to be good. They have to feel like the data is good. They have to trust the data, there needs to be an organization wide perception that procurement has good data. And that’s not a natural byproduct of improving data. There needs to be campaigns around understanding and procurement has to act with a lot of confidence in our data. And we have to share the data with as many people as we can share it with much like how we face risk? How we control processes? How we control information? There was always this knowledge is power. “And so I’m going to keep it close, I’m not going to, if you get my knowledge, then I lose my power.” That’s not how we can look at things anymore. It needs to be like, “If I empower you to do what you need to do, my knowledge increases. And that changes the level of what I can therefore achieve.” We need to take a bigger picture view. I think its happening. I agree with you, the automation needs to come in, we’re foolish to adopt it because everybody else’s, but we would be equally foolish to reject it simply because it’s new and weird. And it’s not our favorite. It’s coming. It’s going to allow us to achieve scale. It’s very powerful. And improvements are being made by leaps and bounds even around usability. I mean, training is barely a thing anymore. Think about the time we used to spend training people when you rolled out a new system. It’s nightmare. And now it’s like, “Listen, here’s your username, here’s your password, click the little thing that looks like a stack of bars. You’ll figure it out,” and most things are that easy. And we need to take confidence in that. Our role is not to prevent people from doing the wrong thing. Our role is to help people do the right thing. And if that means dealing with scary stuff and letting things go, then that is what we need to do, we will fill that space with value oriented things, there’s no question, there are other things that our attention needs to move to. And we need to let go of some of these other things, even if it’s scary, even if every once in a while something does go wrong, we’ve got to let go of them, if we’re going to move on to some of the higher level things that the C suite needs us to do.
Jonny: 1:09:02 I literally couldn’t agree with you more, because it’s about automating the things that need to be automated. And it’s about freeing up procurement to provide strategic insights and strategic value, not just be tied up in a situation where they’re transacting, because existing processes and systems are very manual, and it’s just inefficient. And they spend so much time doing that and which must be hugely frustrating. And I think the two way information flow you’re talking about of procurement, providing more so procurement, lining things up, getting better access to information and then providing that information. And the insights that come from it to the wider organization and again, comes back to what you were talking about, with the C suite, with the COVID situation, where it’s like, and with organizations in general, when you’re up against it, out with the politics and in with the pragmatism. And again, that applies to this, it’s about being honest, it’s about appreciating your own value as procurement teams. And as you said, if you’re protective over information, you’re not really exercising the power of that information anyway. And I think the, possibly where you sometimes hear comments and conversations that would indicate that some people within procurement feel a bit insecure, sometimes, and I’m sure everybody does in every department, but just in terms of the value or how they’re valued within the organization? I think those sort of feelings can cause people to, be a bit more protective and try and defend their fiefdom and hold on to information. Whereas if they were putting it out there, suddenly, you know, if they can get the information, they can communicate it effectively, as you were talking about in the beginning of our conversation, if they can get that in front of the CFO, if they can get that in front of the CEO. They’re going to be sitting there going, “This is really important.”
Kelly: 1:11:33 Yeah. And there’s actually an interesting statistic I read yesterday, I’m not going to get the precise percentages wrong, but I’ll get your close. So this is from the 2021 Deloitte Global CPO survey.
Jonny: 1:12:38 Oh, yeah.
Kelly: 1:12:39 They’re just releasing it. So they look at like, absolute best practice, these are the guys you want to be more like and then sort of average. And I think it was average CPOs are spending ballpark 75% of their time doing transactional work, the best of the best of the best are spending 63% of their time during transactional work. And I thought to myself, that’s the best we got, the best people that we haven’t procurement, are spending two thirds of their time doing transactional stuff. Given all the pressure from technology and all the pressure to do more, there is something more than us being too busy, that is preventing us from letting go of that transactional work. It’s in us, which is the bad news, because it means we’re sort of the roadblock. But the good news to that is that it means all we have to do is identify it, decide to let it go and find the right way. We, oh my gosh, please, by 2022, we need to be below the 50% mark on market leaders doing transactional work, we got to get this down. That’s not how market leading CPO should be spending their time. That’s what systems are for. That’s what service providers are for, we need to get ourselves into this thought work because there’s just not enough time. If 26% of your time is all you’re ever spending on value oriented work, it’s not enough to make a difference.
Jonny: 1:14:03 Yeah, and I guess if your life is 63% transactional, 75% transactional, then that’s how you’re going to be viewed by the C suite. It’s like when you’re running a business, taking the time to look at strategy, people always think to themselves, directors, business owners, C suite, “I’m too busy, I’ve got stuff to do.” But taking a step back, you ever speak to a decent business mentor or go on the right kind of business coaching, take a step back, look at what’s happening? Take a wider view, go back to your strategy, and it’s being strategic and it’s actually putting decent thought into things and that’s where the value and insights that procurement can provide, they’ll just get noticed so much more. And that’s something where that we see a lot when we’re talking to procurement professionals who are spending a lot of their time transacting. I think people are less scared of automation now because they’re just like, “You know what? I don’t want to be sorting out 50 SOW’s every week. Now I just want this stuff in there. So I can see the information, I want to know that it’s a templated contract, I want to know that there’s been correct supplier onboarding, I want to know that milestones have been captured, I want to know that I can see this stuff, I want it to be easy for everyone to do it. But just give me the information because then really what I can do is I can help look at contracts, I can help negotiations. But very importantly, I can help guide the business as to what we’re getting for our money, and where we could or should be spending it? And that’s the stepping stone to a completely different level really, isn’t it?
Kelly: 1:15:37 Yeah, but we have to get rid of the transactional work, it has to go, find a way, like it just, it has to go because we need the space to think, we need the space for craft strategy to be born. And we’re never going to move on to doing different work, if we don’t clear our desks of this transactional stuff, there is no excuse in 2021 for us to be spending such a vast majority of our time doing transactional things that systems could handle or processes that could be distributed out into the organization. That’s the change that we have to focus on driving from within right now, in my opinion.
Jonny: 1:16:11 So all not know and to kind of round things up a little bit. So when you started in services procurement, what would you say were the most noticeable things that you’ve seen evolve? And what are your kind of predictions for how things in world of services procurement are going to change in the next 12, 24 months?
Kelly: 1:16:32 I think the biggest thing that I’ve seen evolve is that services procurement is now a thing, back then you would be sourcing services or really dodgy, you’d be outsourcing. That was like the super uncomfortable thing is the time to be doing. Everybody thought about it is different, but they didn’t think about it as being different for the right reasons. Services procurement needs to be separate for technology reasons, for process reasons, for oversight reasons, for expertise reasons. And I think the fact that we’ve kept it within procurement, we’ve made it adhere to the same principles and priorities that material spend is held to. But we’re seeing it as a slightly unique pool of spend and supplier relationships that need to be managed a little bit differently. I think that’s a good distinction. I think that’s, we’re not like, “Oh, that’s really bad stuff. So we’re not going to deal with that. Nobody wants to work on that.” We’ve just defined it and we’re meeting its needs. So to me, that’s the biggest difference. In terms of predictions...
Jonny: 1:17:45 It’s always best to do predictions after there’s been the most unpredictable months over.
Kelly: 1:17:51 No, [inaudible 01:17:52], just to say, flying cars, yeah. [Inaudible 01:17:52], flying cars. From a services perspective, I think we’re gonna continue to manage more and more services as procurement. But just like technology has made a journey, we’re now with software as a service. And it’s less dependent upon IT teams because stuffs not behind the firewall and all that, I think there’s going to be a similar progression on the services side, where it becomes even less like material sourcing, and becomes more like sort of a hybrid concern between procurement and HR. Because I think, as companies continue to virtualize, both in terms of work from home and in terms of, who’s doing what work? Do they work for us? Are they a contractor? Are they a service provider? I think that’s going to continue just for the sake of efficiency and excellence, honestly, I think it’s going to become less clear to us in some cases, what exactly is a service that we’re buying? There even services out now that are practically masquerading as technology, but under the hood, it’s a service. And I find that fascinating. That’s a very interesting way to approach it. And at the end of the day, as long as it meets the business need, who cares? So meet the business need in an efficient and market leading way, great. But I think this particular category of spend is going to continue to evolve because there’s going to be more of it. And because we’re going to continue to recognize just how critical it is to procurements ability to satisfy objectives. And so I think there’s going to be a lure for more people wanting to go into services, versus thinking like, “Stick the new kid over there.” I think it’s going to become more partner oriented. And I think it’s going to be the place that procurement goes to perfect their soft skills before they come back and work materials categories. Where maybe you don’t need those sort of soft skills to survive, but you do need them to excel. And so there’s a huge learning opportunity for procurement out of services. So, other than flying cars, that’s my prediction on [inaudible 01:20:13] services procurement is going.
Jonny: 1:20:15 I love the way you summarize, I think that’s really cool. I particularly liked your point about services changing and it’s all about meeting the business need. I mean, it’s a bit like COVID, isn’t it? When people have been working from home, dealing with homeschooling and this, that, the other end, it’s just kind of people have accepted and businesses have accepted. If you’re getting the work done, then do what you need to do. And it’s just like this whole thing of just, again, pragmatism.
Kelly: 1:20:41 As you were saying earlier about workforce and diversity and opportunities. Guess what? We’ve learned, in most cases, we don’t care where someone lives. So now your market for talent and services is not even necessarily limited by geography. I mean, in some cases, it is because you need them to come into a facility and do something and so they need to be nearby. But if working with a third party service provider is a way you can meet an area need and increase the diversity through your supply base, then do that, if you can identify roles that truly do not need to be done from inside of corporate headquarters, distribute them through the country, through the world and pick literally the best person for the job. The diversity, I think, will naturally follow. We just needed to be freed from some of our location based constraints.
Jonny: 1:21:30 Yeah, I agree. And I think there’s been huge steps that have been forced on businesses due to the changes made through COVID. And this is all super interesting. I love it. I could literally chat to you about this all day. Just before we wrap things up, two things. One is, I think it’s really interesting point, what you made, you made earlier about the changing nature of services. And I think if you just look at workforce, in general, how work gets done, I personally believe is a significant shift towards an output or an outcome or a deliverable from the time and materials kind of standard setup, 60 years ago was a job for life, budget card, work nine to five and all that sort of thing, get out, gold watch at the end of it, whatever it may be, then we really moved away from that term teams maybe shrunk a bit massive growth of the contract sector, then you’ve recently had things like the gig economy. And there’s all this kind of like area of confusion, where as you say, there’s a huge gray area between contingent workforce and services provision. And I think that’s going to continue to blur and there is going to be crossover. But when you look at things like the way that governments are tackling employment versus non-employment, self-employment, 1099 versus W2, for example, similar things in Germany, similar things in the UK with R35. Governments are going to want to make sure they’re collecting their income tax revenue. And there’s going to need to be more definition about, how are you working? Are you acting as an employee? That also as it applies to rights for employees as well. So I think there’s going to be, there’s more change happening in that area. But as you say, it extends the remit for services procurement, and it also brings it closer to HR, which is a whole different discussion in itself in terms of who owns this? Who owns that? How do you do Strategic Workforce Planning effectively? Because you’ve got to go across both.
Kelly: 1:23:28 I think, [government] has to be informed about all this, even the government policy changes, you mentioned. I know that was an alert that came across my phone from the Wall Street Journal this morning, something changed in the US today. So it’s something that procurement does need to be aware about, because it’s going to affect our strategies.
Jonny: 1:23:44 Yeah, I spoke to a guy called Bruce Moulton who’s the head of strategy for Allegis Global Solutions based in the US and he was talking, he wrote a book about just sort of workforce changes the new world of work as its evolving. And one of the things he talks about is the concept of a work design architect, of a kind of a role where organizations are looking at what they need to do? And trying to understand how is best to do that? And almost having a function. It’s like this kind of maybe the evolution of a strategic workforce planning function. And maybe it sits somewhere across procurement and HR or one or the other. But it certainly needs information from both because the organization, I remember speaking to a big, the CEO of a big publishing company once and he just said to me, “Jonny, the biggest problem I have is that I need to answer the question, what is the most effective use of my resources? And that has to include the entire workforce potential that an extended internal external that your organization has. And it’s a fascinating problem to try and solve. But I think that some of the changes we’re seeing and some of the transformation in technology and the increase in the amount of data will open up the doors for this and an organization’s will become very different things to what they were maybe even 10 years ago, quite quickly.”
Kelly: 1:25:01 And aren’t we lucky to be some of the ones that are going to get to solve that problem? That is a huge stroke of good luck.
Jonny: 1:25:07 Yeah, exactly. And it makes life interesting, doesn’t it? It’s kind of, problem solving, like you say, procurement is about solving problems and helping your business move along. That’s the most important thing for the C suite in any organization.
Kelly: 1:25:20 Absolutely. Yes.
Jonny: 1:25:22 Listen, I really, really enjoyed our conversation. And thanks so much for taking the time. Brilliant insights, and just very interesting and entertaining. One last thing I have to ask you, so behind you, I can see a bookshelf.
Kelly: 1:25:36 Yes.
Jonny: 1:25:36 It says, its looks like an authentic Boston Public Library bookshelf. It look like it’d be too heavy to just kind of like walk out with it? Can you explain the story behind that?
Kelly: 1:25:50 Yes. So for 12 years, I worked remotely from home, at my kitchen table. And over the last year with everybody working in the house. You know what? I think it’s time to have an office with a desk in it and a decent backdrop for all these video conversations I’m having. So I promise I didn’t steal it. BPL don’t get me, don’t treat me [inaudible 01:26:11]. It is not authentically from the Boston Public Library. But I figure what better way to both give homage to the city that I love. And also my roots in library science that without intending to send me into procurement.
Jonny: 1:26:27 Excellent. I love it. It looks fantastic. Listen, thank you so much, Kelly. Really appreciate it.
Kelly: 1:26:32 Thank you, Jonny.
Jonny: 1:26:33 Take care of yourself and hopefully we can catch up again soon.
Kelly: 1:26:36 Agree.