Procurement Leader vs. Purchasing Manager

PurchTips edition #368

What Separates A Procurement Leader From A Purchasing Manager?

The business world often tries to distinguish leaders from managers. In this edition of PurchTips, we’ll apply this distinction to our profession. Here are three ways true procurement leaders are different than mere purchasing managers.

  1. How one motivates his/her team. A purchasing manager’s primary motivational tool is “holding people accountable.” In other words, if team members fail to meet performance standards, the purchasing manager will discipline them. Unfortunately, that encourages in-the-box thinking, achieves performance that rarely exceeds minimum expectations, and creates a culture that will not retain higher-echelon talent. In contrast, a true procurement leader behaves in a way that inspires his/her team to achieve great things. A procurement leader encourages and praises innovative ideas that produce positive business results. As an outcome, true procurement leaders consistently get breakthrough performance from their teams while rarely having to “hold people accountable.”
  1. What metrics have the highest priority. Purchasing managers give the highest priority to metrics like length of sourcing cycle, percentage of spend under contract, and number of suppliers in the database. Those are all decent things to measure. But, they are purchasing-specific. They don’t closely correlate with the strategic goals of the organization, which may include things like contributing best-in-class value in the supply chain, growing market share, and hitting earnings-per-share targets. True procurement leaders will give the highest priority to metrics that directly support the strategic goals of the organization.
  1. How well the team understands its purpose. Purchasing managers are focused on getting the purchasing department’s work done. Subordinates of purchasing managers know what they have to accomplish, but they may not know why. Subordinates of procurement leaders always understand how their work contributes to the success of the organization, improves the lives of the ultimate customer, and/or makes the world a better place.
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