CPO Crunch: The procurement culture club

David Rae

While culture may be difficult to get right, it’s an important enabler of outstanding performance

The well-worn adage of culture eating strategy for breakfast has been around a few years. 

Attributed decades ago to one of the gurus of modern business philosophy, Peter Drucker, it’s a motto that argues that even the shiniest, most creative plans are worthless unless people feel empowered. 

Drucker’s principles underpin the approaches of just as many CEOs and business leaders today as they did when he first floated his ideas in the mid to late 20th century. And one of the most foundational concepts relates to humanocracy, to give it a modern, on-trend label. 

The idea is to move away from command-and-control structures to ones that rely on and actively look to exploit the individual creativity and contribution of employees. And it’s a concept that was explored at length by CPOs during a series of Procurement Leaders calls over the last week. 

Culture is difficult to get right and time-consuming to change, but when you do get it right, it’s a great catalyst for performance. And what better culture, participants on the call suggested, than one that instils trust in the individual and sees collective wisdom and creativity as more powerful than autocracy? 

Over the past couple of years, I’ve come across an increasing number of organisations that are looking to tap into this source of energy, whether through the concept of micro-enterprises within large organisations or through agile structures that are designed for flexibility and speed of execution. 

There are various names that have been developed for this type of approach (and humanocracy must be attributed to Gary Hamel and Michele Zanini, even if the concepts that it’s built upon are not new). But the foundational idea is straightforward – empower individuals, based on merit, to make decisions focused on customer need. 

As another of our CPO participants shared, given the sheer complexity of global business and geopolitics, the only thing we can really do to plan for the mid- or long-term is to learn how to be flexible and agile and to make sure the skills and capabilities of our team are at the highest possible level. 

Part of that is to retain your best people, but another part is to attract the best. And if your culture is built around autonomy, trust and a clear purpose you will put yourself in the best possible position to succeed.

The art of procurement

In less than two weeks, we will congregate at the Museum of Applied Art in Frankfurt for the 2024 Procurement Leaders Dach Forum. With case studies from Unilever, Continental and Givaudan, as well as conversations focused on how we’re trending on net-zero, the adoption of new technology, and future operating models, it promises to be an inspiring and challenging day. I hope to see you there. 

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