“Always run your business as if it’s in trouble. Because if you don’t, it will be some day.” – Jack Miles.
Welcome to our follow-up interview with Jack Miles, a major force in the Procurement field over the past several decades. Mr. Miles has served as Chief Procurement Officer for some of the top organizations in Canada and the United States, including Canadian Imperial Bank of Commerce (CIBC), AIG, and Prentice Hall.
He’s also worked with a number of start-up and early-stage companies looking to establish a strong culture of efficiency as they grow, and that’s what we discussed today.
You’ve worked with quite a few start-up and early-stage companies to help them grow. Why do you think Procurement is important for companies at that stage, and how should they go about it?
“Start-ups are a great example of Procurement not just being about cost,” says Miles. “Sometimes when I sit and look at what early stage and start-up companies do, I think that they don’t bring in enough organizational discipline soon enough. That’s not always a negative because when you look at a start-up environment, the leadership team in place is usually pretty thin, and they’re not thinking about saving money. They’re thinking about growing the business, generating revenue. They almost do anything to make that happen.”
“The challenge becomes, as companies grow, which the ones with a good product or offering do, it becomes harder and harder to reel in the spend process. It becomes part of the culture. You want to create the right culture, and have the right thought process. If you were spending your own money, what would you do? I’m not suggesting a lot of rules, policies, or structure but you need to have people spending money like it’s their own, and keeping that process in mind, and not doing things just because they’re spending somebody else’s money. Companies wait too long to instill those fundamentals.”
“Information helps you make business decisions. If you’re not keeping a good eye on what’s going on in your spend profile and what you’re doing, you get into a position where things are harder to reel back in without the information. Without having spend analytics you can’t do that. Travel is one of the larger categories in many companies – they’ll look at things on a spreadsheet, but they’re not looking at some of the granular data to see how the money is being spent. They don’t have corporate cards to see how the money is being spent. There’s such a thing as companies having too much money. Always run your business as if it’s in trouble. Because if you don’t, it will be some day.”
What’s the difference, in your mind between the right culture and wrong culture when Startups are looking at how they do Procurement?
“It’s the same as in a large organization,” says Miles. “You want a high percentage of people in the function doing good work. You want Procurement to treat the functional areas as a business partner. The reason you’re involved isn’t because an executive tells you that you have to be involved. You’re involved because you’re adding value. The invitations by the functional area are a big part of it.”
“It’s important for Procurement to have some good measures in place, and to make sure that the good work that you’re doing is obvious to some people. One of the challenges in Procurement functions is self-promotion, especially when you start to talk about cost. A CPO talking to the business leadership often talks about how much money they’re saving the company. Credit is something that’s given, but not taken. Give the business functions the credit for reducing the cost. Let them take the bows, the more you let them do that, the more willing they’ll be to invite you into the party.”
– – –
Thanks once again to Jack Miles for the great insights. He is truly one of the most accomplished Procurement Professionals in the field, and we were thrilled to be able to share his perspective with the Argentus blog readership!
Have you signed up for Argentus’ Market Watch Newsletter? It only takes a moment. You’ll receive low-volume, high-impact market insights from the top specialty Supply Chain recruiters including: Salary Information, Supply Chain industry trends, Market Intelligence, Personal Branding tips and More!