This article was originally published in Procurement Heads
In our latest Big Interview, Jack Birch discusses all things Procurement and the post that went viral with Anders.
Anders, you are founder and CEO of Focal Point, a business platform built to help innovate, modernise and streamline Procurement processes. What inspired you to set up the business and how has your career to date helped to lead you here?
Thanks for having me, it is a pleasure to be here. It was actually my career in Procurement that led me to build this solution.
have been a Chief Procurement Officer for a number of years in big companies, and I have been in Procurement for almost 25 years starting in the late 90s in Procurement analytics.
As a Procurement CPO managing large global Procurement organisations, we spent millions of dollars per year in Procurement tech but most of our work in the strategic stuff is on Excel and email. That makes it hard for management to see what is going on and for us to see how things were put together – was the process actually followed?
Then it becomes challenging to do all the things Procurement needs to do today like ESG, diversity and inclusion, risk mitigation. Al of those things become done in separate, vertical solutions. And that is the challenge we are trying to solve.
With Focal Point we have a solution that sits on top of the existing infrastructure and creates a work-flow solution that pulls data in and out of the systems so you can go from intake to invoice. Everything is on the system, integrating with the contract management solutions and evoke those processes as part of the project rather than having it live separately alone in the vertical.
That allows organisations to see who is working on what, what projects are coming down the pipe and making sure that you can obtain your goals and track cycle times and customer satisfaction. It really was my career in Procurement that led me to the idea of having a focal point in Procurement where you can see all the work that needs to be done in a solution that is horizontally focused rather than a bunch of vertically focused things like paying an invoice and so on.
We can see that you are active on the likes of LinkedIn. A recent post of yours went viral, one touching on Procurement teams often not getting the recognition that they deserve.
Why do you think this resonated so widely with people and what can be done to ensure this isn’t such a common experience for those working in Procurement in the future?
It is interesting, I have been working on LinkedIn now quite actively for about 6 months, and you never know what is going to be a hit and what is not.
This particular post had a couple of cheerleaders in the picture one on top of the other taking a picture with somebody. The top cheerleader was taking a picture with somebody above them and essentially, we branded the bottom person as procurement and the top person as finance. Finance was getting the credit and Procurement was helping that person.
I think Procurement do a lot of the background work while other organisations get the stuff, they we’re acquiring or they get the kudos for what is being done. I think number one, the picture with the cheerleaders helped stimulate the responses, but two, the message around that in a simple way – yes, we do work too but it often gets unrecognised.
We had over 750k views of that post in various dynamic backgrounds, it really resonated with people.
I think Procurement is used to being in the background, I think we often like being in the background, but we also like people to give us the credit for work we have done. Part of the problem is people’s perception of Procurement and the second part of it is we haven’t done enough to change that as Procurement professionals.
We need to come to the table and celebrate our successes, it starts internally with Procurement. When I was a CPO, I really enjoyed bragging to my team members about other team members and their achievements. If we don’t know ourselves what we do well, it is hard for others to.
So, number one, is celebrate wins. Two is you have to tell people about value we bring to the table and that is very often hard because we don’t know it well enough or we don’t track it well enough. We tend to only track one metric, savings and that is how we are measured.
For example, I had a supplier management programme set up and we were able to determine before that, a supplier was likely to have financial stability problems and we were able to say we need to find a second source for this before they go belly up, and then switch over as and when we can.
We were able to use that as a springboard to say, not only can we save a bunch of money but we can also prevent disaster for having all of our statements not being mailed out. Being able to document true wins and then telling people about it is very important. I think that will help us move away from the back end of the back office to the middle office.
I think ultimately, we need ways and solutions to communicate more things than just savings. More than that, ESG numbers, diversity and inclusion numbers, and cycle times. These are all things we should be tracking and communicating to stakeholders so they know we are not just about savings. We are not just a speedbump on the way for people to get their stuff. And as long as we can communicate those things clearly that will change over time.
You talk about the issue of Procurement fraud and what can be done to help mitigate it, what are the key things to be aware of here?
Having been in Procurement for a minute, I have experienced fraud within the Procurement process a few times. It normally comes down to people not having a clear process, or they are having ways of not following that process and that is typically when things break down.
I was working for a very large multi-national company and the accounts payable function worked for me, and they were in a low-cost country. I found out that the day before, somebody had reached out to the low-cost people directly pretending to be the CEO of the company saying ‘I need this invoice paid stat’. This person was able to bypass all the control processes to get a $400k wire done because she believed she was doing god’s work, the CEO reached out to her directly.
Of course, she thought she was doing the right thing, it turns out it was fraudulent, but we had a process established, but they were able to bypass those and obviously fraud happens.
Having documented processes and the ability to follow them, is crucial to making that happen. Fraud can happen and sometimes you need more than one person to sign things off, so people have to collude in order to make things happen.
There are lots of ways we can strengthen the process and make it more fool proof. Every time a supplier record gets changed, whether it is the account number or address, validate that against a third-party source.
I can’t tell you how many times that has saved companies from fraud because you shouldn’t typically send a cheque to a PO box, but it is very easy to have that done if you don’t have controls in place. Make sure your processes are ironclad and documented and that people follow them. If they are going to go around the process for good reason, number one they should have the ability to do it, but they need to have controls in place to make sure there are sign-offs that make it happen.
You are passionate about the importance of planned Procurement, what are the main benefits you have seen when this is done right?
So planned Procurement is one of the passionate things that I do as part of my career, that is really figuring out what Procurement it is we should be doing to make Procurement faster, better, cheaper, more resilient and so on.
We do that by having category plans in place and deciding what is worth doing outside of requests coming into the businesses.
What I mean is, Procurement needs to sit down and look at what is coming up, it could be re-negotiation potential, it could be contracts coming up for renewal, it could be all the things we already know about but look forward to see what things we want to achieve based on the known pipe.
Secondarily, talking to stakeholders to say, what do we want to do in IT and HR, so we can put that on the calendar and plan it out. Basically, getting them to some capacity, before we even think about unplanned work which is what Procurement is typically known for.
The business that comes to Procurement through whatever mechanism, and says I need this thing done and Procurement just executes upon it. It is valuable work, don’t get me wrong but it doesn’t move the needle for the business. It becomes a transaction rather than a strategy and that is where planned work is so important that we give visibility in what that is. I bet we get more value out of planned work than unplanned work.
That is why we want to say – if you come to us in the last minute, this is what we want to achieve, if we plan it way in advance this is what we can achieve. That can also change the dynamic of moving things further upstream of the value chain. That is why planned work is so important.
In terms of leadership, you emphasised the importance of emotional intelligence and that this is a crucial trait for a successful leader to possess.
Why is EQ particularly significant in Procurement and what other traits or soft skills would you consider most important?
In Procurement we are dealing with people, yes in companies but the front end of those companies are people.
Internally your team members are people, your customers are people and they all have their own goals and drivers, they have their own personal lives. All of these things are intermingled with what we want to achieve.
Your customer wants to achieve their goals and objectives by making an acquisition for the third party. They just want to get their stuff; they don’t necessarily know how to get it in the best way.
When they come into Procurement sometimes, they give you half the information, whatever the case may be. You then take that and hand it to someone on your team who has to pick up the pieces. It could be quite emotional, so understanding what is driving people and understanding what is going on to motivate that behaviour they are doing.
You have to listen a lot, you have to make sure you understand what is driving the suppliers and the internal stakeholders to drive things forward in a non-combative way. The days of combative procurement are done.
At this point, it is more about building supply, growing partnerships, mutual gain sharing, and really elevating the brand of Procurement and the benefits of Procurement. You have to be able to deal with the people in front of you in the best possible way. Often that is asking, how are you being rewarded from this, how does your commission get structured?
By having those discussions, you can usually get ahead of the curve without having to negotiate about something you don’t even know exists. One of the biggest challenges I had as a young executive, was understanding the whole idea of people bringing their personal life to work. I was a very young man when I had a woman come into my office and say that she had just called the police on her son because he was stealing to fund a heroin addiction – I was not at all prepared for that.
There is often a lot going on that people don’t know and giving people some space to be themselves is very important. This particular individual, I said if you need to stay to make sure you are thinking about something else, stay. If you need to go home then go. You come first, you’re more important than whatever you need to do today, make sure you have that kind of relationship with the people around you and you will have a better experience for that.
Have you had any experience in hiring interim managers in the Procurement space and how can quality interim managers best help elevate the success of Procurement teams?
I have had the pleasure of working with interim managers quite a bit as you go into Procurement functions and you have to fill gaps as you start to transition things over.
I will say that a good quality interim manager typically is what I would call a low-price, high-value consultant. They come in with a lot of skills and know how things should run. That brings a lot of value while you are finding replacements for people.
I also think good interim managers can bring a lot of new thinking into an organisation. So if someone leaves, you put an interim in for 3-4 months that person will bring in their best practice and the company will learn from that. Ultimately, bringing in good people with knowledge and skills will not hurt you at all. I like to use interim managers; I find a lot of value from it.
You have a young son, who you refer to in your posts, and make comparisons between parenthood and business, how does fatherhood compare to the challenges of founding and growing a company?
Someone told me that I have two start ups now! My company, and my son who is turning one next week!
There are similarities for sure, the comparisons between business and meeting a child are super interesting, we talk about change management a lot and it is typically the things that are the most difficult things for Procurement managers.
You can put in a new system that is not a technical project, that is a change project – it is change and it is impacting sometimes thousands of people. The change is what is hard for people – you have to tell them what to do, how to do it and why.
As Oliver started to eat solid food, he was perfectly happy with his old way of eating, he had no problem with bottle or breast – he thought it was awesome! And now all of a sudden, we sit him down and start shovelling things into his mouth and he thought, wait a second this isn’t cool! It changed for him, and we realised we had to help him through that process, try and explain why but also incentivise it to make it fun.
The comparison of change for a business or on an individual scale, the parallels can be drawn. Obviously, it is much more complex in an organisation. But as I observe Oliver doing all these things like learning to walk and stand – we have to make sure he is safe and that he learns along the way while feeling supported and I think all of those things are true in the corporate world as well.
