The procurement function has dramatically changed from its previous role of purchasing and transactional compliance. Procurement departments are now strategic agents that seek to align best practice within the business. Analysts, buyers and category managers also need to grow to meet these new needs.
The question that organisations need to ask is "what makes a good category manager?" Increasingly, category managers need more strategic, interpersonal and change management skills. As the role of procurement within organisations changes, senior buyers need to develop also. The central message is: category managers: forget what you did before.
A recent report by Kay Bayen, development advisor at the European Institute of Purchasing Management, compared the skills needed for a category manager in 2015 to current organisational needs. For 2010, most surveyed businesses thought that integrity, negotiation, cost management and category expertise were the most valued skills. However, in 2015 executives believed that category managers needed strategic thinking, team-working abilities, influencing and persuasion skills and change management. That businesses believe that there will be such a differing profile in their category managers ten years hence, shows that not only will organisations need to recruit these skills in the future, but recruit those individuals that are capable of developing with the organisation.
Soft skills are also at the heart of new category management. Number crunchers may be useful in the back office, but during negotiations with clients, category managers need to possess emotional intelligence as well as numerical ability to strike the best deal. For instance, a University of California report found that exhibiting anger whilst in discussions with suppliers may secure a better deal. The other party may fear that dissatisfaction may precipitate a withdrawal from the negotiations. Thus a strategic display of irritation may leverage a stronger bargaining position, if conveyed in a professional manner.
A recent book by Jeffrey Pfeffer at Stanford Business School found that organisational success is partly hinged on the political and power-building skills of its managers. Those managers that have strong interpersonal skills and the political acumen to persuade and manage people can drive through change and organisational improvements, even where staff are disengaged. Where procurement needs to increase its profile and ensure that buying best practice is adhered to, it needs the personnel to drive through efficiencies.
Category managers need to develop these skills if they are to remain competitive in the future, and companies need to ensure that their senior buyers need to possess these skills if the organisations themselves are to remain competitive. These issues will be discussed in greater depth in PIU's next Executive Research report on talent management, which will be launched in October.