#GlobalProcurement – dip the toes in

There is little doubt these days that gaining professional experience outside of your home country benefits almost anyone on a career and personal level. But how important is the global experience for a “Global Procurement” manager? We’d argue VERY and that it’s more than just the amount of time spent in a foreign country.

Global Procurement Intercultural

Here are our top benefits to an experience abroad

1.       Intercultural negotiations

There are some common threads to negotiations, but there are also significant differences in the style negotiations are conducted in different places around the world. For a Procurement professional who is looked to, to be an expert in negotiating, it is crucial to understand how to successfully build relationships and negotiate in different markets. From the more matter-of-fact, confrontational style in Germany to the very relationship based, face-saving style in Japan, the wrong approach can make the negotiation difficult and make Procurement look a lot less capable internally. Of course you can read books about said topic and gain some experience through business travel or even remote negotiation. But there is really no substitute for living in an environment where the cultural codes are different and where over time you learn to look at your own preferences and style in a less “black and white” – “I am right, they are wrong/rude/…” type of way. The experience of being a minority or a cultural outsider and not the “standard setter” is a humbling one and none that you ever experience sitting in your country’s head office. This won’t just apply to the negotiation situation, but also to everyday situations.

2.       Market understanding

There are vast differences between the markets our suppliers are based in, but also the markets where internal customers of a Global Procurement department are based in. Ever tried to get suppliers to deliver goods with 90 days payment terms to Zimbabwe when inflation was skyrocketing? You bet your global standards won’t get you anywhere. Or solving a delivery challenge for a construction project in India? Time of the essence and leverage on the supplier limited, you need to get more creative than just calling up their global account lead or throwing a fit. Experience with different markets can be gained remotely and onsite, but some things are becoming a lot more obvious when staying in a country for a longer time, be it infrastructure challenges, cultural norms driving the offer or pricing dynamics in fast evolving markets.

3.       Compliance challenges

Commitment to corporate social responsibility is not a luxury, but a must these days and consequences for offending companies, be it violating labour laws or engaging in corruption are severe. Procurement is always tasked to ensure that purchasing decisions are made in a transparent, non-biased way and that suppliers adhere to codes of conduct. Based in a Western market for example, you have experience with some challenges, but the type and level of fraud is quite different across markets. Cheating for pennies on stationary orders is not very likely in a developed market, whilst in emerging markets low level fraud is more common. Labour laws, environmental standards or safety and acceptable standards locally differ considerably, so risk management and control around these needs to be differentiated. And sometimes the less developed markets actually have higher regulation and ignoring that can lead to severe delays.

4.       Effectively collaborating with international colleagues

Besides effective listening capabilities, having a breadth of international experience helps collaborate more effectively with international colleagues. It adds to understanding of their position in a non-headquarter location, adds to the credibility of the Procurement professional who can see the problem from different angles and helps find the right tone and really engaging remote colleagues. Even better if language skills come into play as well and familiarity with digital collaboration tools and moderating meetings well. Many of us having worked in remote locations have experienced the frustration of being on a global call with a group of people in one room and the difficulty of contributing or feeling like a valued member of the team. Own personal experience definitely makes a lot more aware and hopefully capable to do better.

5.       Innovation

Numerous studies have shown the benefits of international experience to innovation capacity. Not surprisingly, experiencing the different types of services available in a different market can push the Procurement managers ability to make broader proposals how a challenge can be solved internally and even teach suppliers in local markets how do adopt great practise from another geography. Many local suppliers react to competition in the market rather than looking for great ideas outside. Some of this can be uncovered as part of an international procurement process (if done in a manner fit to demonstrate different solutions to a problem), but many are seen through day-to-day living in a different market. For example, the digital sophistication the consumer experiences in Singapore is quite different from Western Europe which lags behind in that regard. So the best practise is maybe not headquarter, but another country. Developing markets especially are often great at finding really nifty, low cost solutions out of necessity

Above all show that a broad brush approach to Global Procurement as practised in some companies is a dangerous one in a very diverse world. Not only is it frustrating to internal business outside the headquarter locations, it is also risky and misses to capture opportunities. So having a team with broad international experiences, cultural sensitivity, different language skills and battle stories to tell from different markets is very important.

Lastly, it is quality that counts as well. Many an expat lives in an expat bubble abroad for years. So when looking for international experience, don’t just look at the resume and the count of years, but see if the candidate has picked up language skills, can recount experiences, highlight differences (and not just in a “we’re ahead” sort of way) and show understanding how to respectfully collaborate with global colleagues and suppliers.

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