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Procurement leadership is fast catching up with yesterday

January 16, 2014

According to the Procurement Leaders’ 2014 talent survey, the number one skill gap for procurement professionals is commercial awareness.

Procurement Leaders is just one of the organizations that is jumping onto the ‘commercial skills’ bandwagon. Suddenly – it seems – Procurement professionals need to broaden their knowledge and perspectives in order to deliver sustained value and to be seen as core to business activity.

For the 12,000 Procurement professionals who have chosen to be members of IACCM (and especially the 5,000 who are engaged in obtaining formal certification), this may not come as a great surprise. In fact, what probably does surprise them is how long it has taken the various analysts, consultants and associations to wake up to the reality of current business conditions.

Business models have changed; social expectations and regulatory environments are transforming; executives have grasped their fundamental reliance on sustainable relationships. Many of the Procurement mantras of recent years are seen as narrow, constraining, inflexible. And that is because they were developed to meet the needs of the moment – cost-cutting, compliance, controls – and were not designed to adapt to the fast-changing conditions that had made them necessary in the first place.

Smart leaders in the Procurement community grasped this dilemma and saw the need to create a new generation of commercially aware professionals, strong on analysis, communication, relationship skills. These professionals also understand the need to take responsibility for outcomes and to ensure that suppliers assist the business to achieve its wider goals.

The slight irony in this sudden awakening is that those who have commercial awareness are in a position to lead, precisely because they are aware of wider trends and developments. Commercial awareness lies at the core of any professions continued relevance, its ability to adjust and adapt. It must therefore be a fundamental component of the skills in any leadership body or team.

IACCM offers a range of programs for those seeking to raise their commercial capabilities and knowledge. These range from a Foundations program, through a range of formal certification offerings, to a Commercial Skills for Leaders class. 

  1. David Wyer permalink

    Tim – I like your comments. I think that as we move to more collaborative type of contracting it will increase the focus on commercial awareness – but it doesn’t stop there. For me a contract manager then has to demonstrate leadership, resilience, emotional intelligence, communication skills, to be entreprenurial, business focused. A bit like a maslow type of triangle.

    • David
      You are quite correct about the expanded skill set needed to understand and deliver value potential. Of course, we must be cautious not to ascribe total entrepreneurial skill to a contract or commercial manager. If they were truly these fully-rounded business people, they would most likely be running their own business! But I think one point you make is fundamental and that is about leadership. We observe far too little of this within the contracts / commercial community. We tend to stand back and observe or commentate rather than have the courage and confidence to explain the value of our role. Even when equipped with compelling data (from IACCM research, for example), we find very few of the existing community are ready to promote this to top management and thereby secure the future of the function.

      Indeed, in 2014 one of our focus areas will be to develop leadership skills training for the senior managers in commercial / contracts.

      Thanks again for your comment!


  2. Marci permalink

    Thanks for your comments and insight. As an attorney and professional with years of supplier management experience I can see how the roles need to be expanded. I think the fully-rounded business person is definitely possible. The question is will it be supported by management.

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