Safe Bet? Shortlisting in Procurement

Business leadership often mandates that new hires come from a specific industry or category background to try to reduce risk. It is considered the “safe” way to hire, and sometimes it may well be necessary. But often a fixation on a candidate who has been in a similar role previously can shut the door to best performers who are more likely to bring more to the table – creating change and driving the business strategy.

As part of our ongoing leadership engagement at Norman Broadbent, we are conducting a survey examining what skills are transferable across operational leadership and ultimately how leaders understand the benefits and challenges of considering candidates from different sectors/industries. This led me to think about the same principles within the Procurement function and how there are still certain sectors that will opt for the ‘safe bet’ when hiring at the senior levels. Is it worth Procurement leaders exploring the option of hiring someone from a different industry? What benefits are there in taking this route? And importantly, how do you identify the rare occasions when you do absolutely need to hire someone with certain non-transferable category or industry experience?

Working within the Procurement function for the last 7 years I have found the most important competencies translate to any industry and across many categories. Areas such as Procurement strategy building, Supplier negotiation, Supplier relationship management, Vendor management and Building stakeholder engagement are universal. This has real implications for hiring trends in the short-to-medium term. Over the last twelve months certain industries have been severely affected by COVID-19, while others have not – resulting in highly competent Procurement professionals from specific sectors on the market. Wily leaders will see the opportunity to not only secure top professionals for their team, but also harness the benefits of cognitive diversity and fresh ideas that an out-of-sector hire can bring. Focussing on competencies rather than experience, we have found often you can drop the best people in to any industry/category and they will thrive! The benefits of hiring from outside of industry can include:

  • Bringing diversity of thinking and perspective, when a candidate is forced by circumstance to learn a new industry, they will naturally apply what they’ve learned in other industries, and might be able to bring a fresh perspective to the table.
  • People who have performed the same or similar jobs over and over may become calcified in their traditional methods, these are the worst candidates to hire if you want someone to rethink or re-imagine a function/category, streamline a process or improve operations.
  • Someone who has performed an identical job in a different company is not going to question or reconsider processes, decisions, methods, or strategies as easily as an outsider will.
  • When hiring someone who lacks industry/category experience, it can challenge the managers and stakeholders by having to answer questions they haven’t answered for years or ever. This in turn challenges the business to consider processes, methods, and technology afresh.

While many of my clients do have a broader outlook in recognising the above benefits, who are open to seeking individuals with the right skills and business acumen, understanding that they can train specific category knowledge, there are still some who fail to embrace the idea of transferable skills within this function. I believe it is a change in mindset that needs to happen, with the industry as a whole accepting – and even promoting – the idea that hiring someone from outside a certain niche isn’t a compromise and it can actually provide some extra value in diversity of thought and how a certain industry principles could relate to others.  I have highlighted a recent example of how hiring from outside of industry has really worked and has been beneficial to the client.

Case Study

Challenge: Global beverage business had lost their Head of Procurement. A restructure in the business upgraded the role to Director level making it responsible for both direct/indirect procurement. The regional VP Procurement was keen to see candidates from within industry and outside to benchmark against each other and see what benefits they could bring to the role.

Solution: Norman Broadbent were engaged on this search due to their track record of global success within the Procurement function. We committed to the client that we would be able to find a selection of relevant candidates from both outside of industry and within the FMCG industry.

Outcome: We successfully completed this search and filled the role with a Procurement professional that came from within the Oil & Gas industry. The client was exceptionally pleased with the candidate. Fast forward 3 months and the incumbent is doing exceptionally well and has brought a different perspective to business. Moving forward they have asked for us to always include out of industry experience in our shortlists.

The underlying message here is that Procurement business leaders should hire based on skills, potential and personality more often. If a candidate has the relevant transferable skills and a proven track record of delivering results, then the category or specific industry experience can usually be trained.

If you would like to discuss this article further, learn more about The Norman Broadbent Group, or discuss specific people or organisational challenges, please do not hesitate to contact James Peskett via james.peskett@normanbroadbent.com for an initial confidential discussion.