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Managing Marketing: Why Procurement are the Marketing Good Guys

Matt_Perfect

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Matt Perfect is a procurement guy. But more than this, he is advocating for diverse suppliers, building social procurement capacity, and focused on doing the deals that matter. He does this through his facilitation and coaching, as a principal of Impact Spender. Unlike many in marketing, Matt believes procurement has an essential role in driving great business and marketing outcomes by doing good, not just cutting costs.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.

Today, I’m sitting down and having a conversation with Matt Perfect, procurement professional, coach and facilitator; but more than this, he is advocating for diverse supply chains, building social procurement capacity and focusing on the deals that matter.

He does this as a principle of Impact Spender because Matt believes procurement has an essential role in driving great business and marketing outcomes by doing good, not by just cutting costs. Welcome, Matt.

Matt:

Thank you, Darren. Great to be here.

Darren:

Look, it’s great to catch up. I think our paths crossed over a decade ago when you were at The Source and The Faculty, is that right?

Matt:

That’s right. It probably was about 10 years ago now. I think we were doing some work specifically in the marketing space and it was great to bring your expertise into work with some of the category managers that we brought together around marketing. And I think yeah, that was a while back now.

Darren:

I always say to people when they ask me about procurement, I say, I have this love-hate relationship, and it’s because there are procurement people that I absolutely love working with. And then there are others that drive me crazy because they are not open to thinking about things differently. And I know it’s easy to say people fall into two categories, but there’s those that are very process-driven and then there’s those that are very outcome-driven. I think that applies to all people, doesn’t it, Matt?

Matt:

Yeah, look, I think it probably does, but I think that’s a very common perception, particularly of procurement. A lot of the work I do now as an independent coach and facilitator working with suppliers, helping them to sort of understand procurement better, helping them to navigate procurement processes, tenders, and RFPs and the like, and negotiations. And as you say, I like to focus on the deals that matter.

But I think, yeah, it’s definitely something that the procurement profession is probably like many others, you get a lot of people who are very process-focused and you get others that are seeing the bigger picture of the business and are starting to really drive bigger outcomes, particularly in the sustainability space, which is where I focus now.

Darren:

Yeah, it’s interesting because I’ve noticed that recently, in my interactions with procurement, they’re much more open to conversations around some of those sustainable development goals that the UN published or agreed and published. When was that? About five years ago?

Matt:

Yeah, I think, I mean, they replaced the old millennium goals and I think it was probably even more than five years ago now. But it’s a set of goals that really focus out to 2030, which is not that long away, and 17 goals that set a really ambitious global target from addressing many of the big challenges that we face as a society, both environmentally and socially.

But also, through a lens of, I guess, economic development, which is the focus of many of the United Nations governments that have signed up to it. And of course, the businesses that are now aligning around it too.

So, it’s definitely growing in the business conversation and therefore, procurement as a key driver of business has to really get their heads around it and say, “Well, what are we doing in the supply chain and how are the suppliers that we’re working with helping us to get closer to delivering on these goals, or sadly, in some cases holding us back?” And that’s really what is a big driver for sustainable procurement.

Darren:

I know marketing particularly has had a bit of an issue with how do they embrace and get involved with environmental sustainability with Net Zero Emissions and things like that because, at the core of it, marketing is about driving consumption. It’s almost, many people will superficially think that it’s the antithesis of long-term environmental sustainability. What’s your perspective?

Matt:

Yeah. I mean, I hear that, but I disagree really. I think marketing is about telling the story of the organisation and helping the organisation to communicate its purpose. And so, if the organisation’s purpose is really just to drive increased consumption of its products, well, I guess that’s where obviously, a lot of marketing activity has gone.

But I think as organisations increasingly start to respond to that consumer demand, the ethical consumption demand and I guess the investor demand and employees that are really looking for more. And I think the statistic that’s fairly well published now is that 60% of consumers — I think this came out in the last couple of years; 60% of consumers will switch to a brand that is more sustainable and even pay a higher price.

I think there’s some debate as to how well that’s flowing through in terms of at the checkout. I certainly acknowledge that, but I think the intention is there, and I think organisations are starting to really respond to that.

So, I think marketing has a really good opportunity and is increasingly starting to tell that story better. And again, that’s a great opportunity for collaborating with procurement, where much of that story sits within the supply chain. And I think it’s a really exciting shift in the way that procurement and marketing can work together into the future.

Darren:

Yeah, it’s interesting, isn’t it? Because it’s also having an impact on employees, it’s having an impact on investors. You know, we’re starting to see investor groups starting to move their money towards those companies that are embracing and taking on board these sustainable initiatives.

Matt:

Yeah, absolutely. I mean, I think that responsible investment has been around for a while now. I think we’ve been seeing an increasing focus on what a lot of investor communities tend to refer to as ESG or Environmental, Social and Governance measures.

But I think a few years ago when BlackRock, one of the largest investors that hold a lot of the pension funds in the US came out quite strongly and said we are really going to be focusing a lot more now on the purpose of the organisations that we invest in, and we expect every organisation in our portfolio — I think that’s made a real difference.

The term impact spender that I work under comes very much from borrowing from the impact investor community and saying, well, if we look at the portfolio of investments that we have as an impact investor, and we are looking for not only financial returns anymore, but how are we driving social and economic outcomes alongside the financial returns in our investment portfolio?

I said, well, why don’t we think of our categories of spending as an organisation in the same way? We should be thinking of impact, not as a category in and of itself, but actually as the whole spectrum of suppliers that we work with and the categories that we manage in procurement.

Every one of them is having positive and negative impacts on society and on the planet. And every one of our procurement and category strategies is an opportunity to influence that more in the direction that we want to go as an organisation and as a society. And again, the sustainable development goals provide some really great signposts for that.

Darren:

Now, a minute ago, you mentioned the checkout and it immediately brought to mind some of the great work that the retailers are doing, especially in Australia. I think you can see with Coles the relationship between procurement going out and sourcing from a more diverse supplier base and a more responsible supplier base, is then becoming fodder for the marketing team to communicate the very work that procurement’s doing. I mean, who would’ve thought that marketing would see procurement as a worthy topic to be sharing?

Matt:

Yeah, absolutely. And it’s really exciting as a procurement professional to see procurement feature a lot more in marketing now. I mean, back in the day, when you would’ve first met me at The Faculty and The Source, I used to sort of turn up at the barbecues and I was a bit like the Chandler Bing of my friends.

You know, if you remember the comedy Friends where no one actually knew what he did, he just went to the city in a suit every day, but no one could actually tell what he did. And that was very much me in procurement.

But I think now, certainly, ethical sourcing, responsible procurement, are becoming the focus of organisations in their marketing campaigns. And I think that the supermarkets are a great example of that. It demonstrates that that’s what a lot of consumers care about. And that’s really exciting to bring the profession that I’ve been working in to the forefront and say, well, actually, this is the bigger picture of what we are doing.

Darren:

And it has changed a lot, hasn’t it? The procurement focus over the last 10 years? So, we met just after, in Australia, we call it the global financial crisis, but it was basically a global recession. You know, it really was a crisis that impacted so many countries economically.

And there was a real focus globally from procurement in cost-cutting. And I think that’s why for a lot of agencies and even marketing people, procurement was seen as the budget cutter, the group that was sent in to reduce costs, which often meant reducing the profits and livelihood of the marketing supply chain. That’s a reasonable summary, isn’t it?

Matt:

Yeah, look, I think it is, and it still is, to be honest. I don’t want to shy away from the reality that I think cutting-cost is a fundamental and primary driver for procurement. And it still is as we look to economic recovery now post a pandemic, or even as the pandemic continues. I’m always reluctant to say we’re post-pandemic. Hence, we’ve moved into another lockdown here in Melbourne.

But absolutely, I think we’re certainly heading in that direction. I think procurement likes attaching itself to value being the goal, delivering value for money. That’s a very sort of public sector focus, I think, but it actually reflects what we’re trying to do more broadly as a profession.

And I think procurement has historically traced an increasingly sophisticated definition of value back from the early days when really it was purchasing. And we really were just focused on cost. And then we started to realise that if you just buy the cheapest all the time, you’re not going to get the quality and you’re not going to get the service and that ultimately, costs you more in the long run.

So, we increasingly brought in factors of risk and quality and service into that definition of value for money. And I think now, with the environmental and sustainable and social focus, we’re starting to look at impact as the next dimension of that value that we’re trying to measure.

Now, depending on the level of maturity of procurement professional and their capacity and how stretched they are as a resource and what their drivers are internally, you’re going to see a whole range of those sorts of definitions of value still out there in the marketplace. So, I recognise that a lot of suppliers are still going to feel they’re up against that real sort of rough cost edge for procurement.

But I think what I often say to suppliers is if you can recognise that behind what they’re putting out into the market and behind what might be discussed, there is a bigger agenda for the organisation that they’re there to drive. If you can frame what you are delivering to them in a broader definition of value, then you’re going to be able to have a broader conversation with procurement.

But sometimes that does start with the cost conversation and it’s often on the supplier and their ability to sort of open that conversation up to demonstrate value in broader ways, including around the sustainability goals.

Darren:

Yeah, it’s interesting because there was a time when procurement was often largely an extension of the finance of the CFO. And I remember a couple of times where a consumer package goods company managed to build capability around marketing procurement. And in the first year, they were really happy because they’d largely reduced about 12% across the board, by building capabilities around things like production and media and agency supplier contracts.

The second year, it wasn’t so easy to deliver. And it was sad because they built a really good team with deep experience in the category. But in the third year, when there were no project savings, they suddenly all disappeared and a lot of people, I don’t think, realise that procurement people are often held to account themselves on delivering whatever it is, the criteria that are being set for them, aren’t they?

Matt:

Yeah, I think that’s right. I think what you’re speaking to there is sort of the difference between a very sourcing focused procurement team and supplier relationship management, category management, contract management, those ongoing opportunities to create value within an organisation, as opposed to just at the time of going to market.

And again, I think that the history of procurement has been very much that expertise and capability of sourcing and going to market. I think increasingly, we’re seeing the growth of things like category management which I advocate for a great deal as a model for procurement because I think it’s really the only way you can get that kind of long-term strategic focus into your procurement priority that allows you to do some of the things and deliver some of the value that we’re talking about on a sustainability agenda.

And I think the opportunity to do that is being driven by exactly what you’ve pointed to, that a lot of the sourcing savings that were there in the first wave when procurement first came in and started looking at things strategically and putting things through procurement processes, they’re not there anymore. Organisations have matured beyond that. They’ve been through two or three sourcing cycles over maybe 10 years or so.

And now, they’re saying, well, either procurement’s now a redundant need in our organisation, or it’s got to evolve and play a bigger role. And I think that’s what’s allowing a lot of procurement professionals to broaden their own outlook. And say, well, what other value can I add to the organisation beyond sourcing, a short-term sourcing focus.

Darren:

And going from that sourcing to more relationship management also allows you to work closely with those suppliers and vendors. I know agencies hate the term “vendors,” but to actually help them make their own businesses more sustainable.

Matt:

Yeah. Vendors, suppliers, I think every supplier would prefer to be a partner, I think. But often that can be a trap, I think when you get told you’re a partner and it doesn’t feel like you’re a partner at all. So, I think as long as it’s consistent and you know where you stand, I think that’s fine. And I’ve just completely lost the question there. I’ve been caught on one thing there.

Darren:

Well, it’s a good point because I know agencies … I used to have quite a few disagreements. They’d say “We’re a partner.” And I’d go, “Okay. So, when your client suffers a financial loss, you’re willing to take a financial loss?” And they went, “Well, no, I mean, a partner in a different sense.” And I go, “Well, I’m sorry. The legal definition is you both cough up when there is a loss.”

Now, I was saying that there’s an opportunity for when you move from sourcing into relationship management, it means that you can actually then work with your suppliers, with your agencies, and actually help them become more sustainable. And I mean that in that specifically, we’ve seen agencies be very slow to embrace things like automation and technology that would actually make them more efficient and reduce waste.

And so, suddenly, there are conversations that can be had to actually facilitate that and perhaps even look at longer-term relationships rather than this sort of two to three-year contract cycle to actually make it worthwhile for the agencies to invest in the types of technology to deliver that.

Matt:

Yeah, absolutely. I mean, I think procurement in some industries has a history of doing longer-term deals. You know, I used to do a fair bit of work in the mining industry and there, it wasn’t unusual, particularly in some of the major strategic categories of the sort of heavy mining equipment and some of those sorts of things to have much longer-term partnership type arrangements.

And I think that’s becoming more of a possibility and typically marketing would fall in what we’d call the indirect space. So, it’s one of those categories that is not directly core to the operations of the business. It doesn’t appear in the products that the businesses sell. But it’s no less important in marketing, particularly for consumer brand organisations, is a very strategic category, even if it’s not necessarily considered a direct ingredient.

So, I think that opportunity is opening up more to be in those sort of longer-term relationships. And again, I think the procurement language for that is typically a sort of supplier relationship management or a category management focus. Those are the things that you’d be listening out for as a supplier. If you’re hearing that kind of language, then it’s a chance and a sign that you can have a longer-term horizon with the procurement person you’re dealing with.

And yeah, a lot of these things — and again, I bring it often back to the sustainable development goals; 2030, it’s a long time away, but it’s not a long time away from a human perspective and a planetary perspective, but actually, in terms of a business cycle and a sourcing cycle, it’s still sort of three generations of a typical sourcing cycle away.

So, it is an opportunity for you to say to a supplier, “What can we do together by 2030? Imagine if we were still doing business in 2030, and we set that shared goal now, imagine what we could do together. And I think that’s the innovation opportunity and the exciting piece for some of these suppliers and partnering with procurement that way.

Darren:

I know back in 2007 when we started working at TrinityP3 on the CO2 calculator or the counter, which was to measure the CO2 contribution of marketing activities, we were talking to people and back then it was all about offsetting. If you’re going to produce carbon, then you just have to offset it. And somehow, the problem magically goes away.

And the philosophy that we were taking is that the measurement of carbon is actually a measurement of activity. And if you can find more efficient ways to reduce waste out of that process, then it actually means that you’re being more efficient. It was a well-constructed thought, but it wasn’t an argument that got a lot of traction because at the time, the only conversation was around carbon taxes and things like that.

It’s interesting now that there’s a lot more conversation around, how do we take alternative processes? How do we look at new ways of doing things? And innovation has become such a big part of environmental sustainability because it’s actually going to be technology-led.

Matt:

Yeah, absolutely. I mean, and again, from a supply chain perspective, that’s one of those things that I think procurement is increasingly recognising as value or should be recognised as value is innovation and the opportunity to do things differently, whether that’s the technology innovation or even a process innovation. I think there’s a lot of innovation in the way procurement is redefining what value is on a category basis.

And again, I think that’s a real opportunity in marketing; how do we measure what we do in marketing and how do we measure the value of marketing? And I think to go back to your sort of earlier comments about if marketing’s just seen as a driver of consumption, then it often can be hard to align with things, the broader sustainability goals of an organisation.

But I think if we start to think about marketing more as, how do we tell the story of all of our operations, including the impact that we have — and as you say, opportunities to reduce things like carbon emissions through greater efficiencies, those are the things that are being recognised now by investors and consumers and employees as the role of the organisation beyond just shareholder profits.

So, I think there’s a huge opportunity for innovation, for sure. And again, marketing and procurement should really be working together to deliver on that.

Darren:

What do you think are the obstacles that are getting in the way? Because I still hear a lot of tension in the marketplace. It seems to me that there is a bigger picture now in business that major corporations are now embracing that it’s not just about delivering profits back to shareholders, that they see the value in embracing things like a corporate purpose that is aligned to delivering sustainability and value beyond just profit. So, what’s slowing this down in the sort of evolution of business?

Matt:

I think it’s culture. I think culture change is really hard. And even when you get leadership from the top and direction, I think it takes a long time to change the culture of a profession like procurement and I would think it’s the same for marketing.

I think you can see the beacons now in procurement and in marketing, but the status quo, it takes a lot longer to change. And what’s mainstream, I mean, I often think it’s probably been eight years that I’ve kind of been working independently now around these sort of ideas of sustainability and social procurement. It’s not a new idea. Impact spending is not a completely new idea. But it certainly wasn’t mainstream eight years ago and I’d even argue it’s still not mainstream yet.

I still don’t think we’ve found that tipping point. So, I think culture change takes a long-time, generations perhaps. And I think that’s one of the things that is the great hope, is that there are new generations coming through into procurement and marketing that are able to see things differently. And therefore, pick up on those strategic opportunities that we can see and point to, but not necessarily always get our hands around in terms of the day-to-day work that we’re doing.

I think there’s a lot of culture in procurement that is still based on the old thinking of creating an extractive mindset, that is very much where procurement was born. If you like, the genesis of procurement was how do we extract value from our supply chain in order to deliver to our shareholders.

And I think as the world starts to say, well, actually is there a more regenerative way that we can run a business that is no longer extractive? Whether that’s just from an industry perspective or even from a consumption perspective, we need to rethink the procurement processes around that. Well, what does it mean to do regenerative procurement? What does it mean to procure in a way that is no longer extractive?

But I think that culture change takes a long time to come through. And I think that’s the biggest barrier, for sure.

Darren:

Yeah, it’s interesting, isn’t it? Because you do find yourself once you get into the mindset of long-term sustainability and rethinking the business model, it’s easy to fall into the trap of thinking, well, this makes sense. Why isn’t everyone doing it?

And suddenly I’m sitting here thinking of the examples, like the number of companies that have become B-Corps for instance as a way of substantiating their commitment to long term sustainability. And yet, when we say to marketers as part of the selection process; “Are you interested in a B-Corp? Are you interested in a diverse supply chain? Are you interested in agencies owned by women for instance, or owned by people of colour?”

It’s still like, “No, I just want the best agency.” That it is peripheral to the thinking of the day-to-day requirement compared to of the bigger picture. I think the bigger picture often gets lost because the day-to-day problems get in the way.

Matt:

Yeah. I think that’s still true. I think supplier diversity is very much the aspiration for a lot of supply chains at the moment, but I think from a procurement perspective, I think we’re a step behind where maybe people and culture have got to with a diversity of saying in most organisations, “Well, we’ve been trying to have a more diverse employee base for a while, but we recognize now that it’s actually not just about setting the targets to have a diverse organisation it’s about being inclusive.”

And that goes to that culture change I was talking about before; what is it that stops diverse people from coming to our organisation and being successful in our organisation. And we’ve got to start to move from diversity to inclusion. And I think a lot of the work that I do now is starting to look at what does inclusive procurement mean?

If the goal is supplier diversity, what do we need to change in our procurement processes that actually encourages and makes it easier for women-owned businesses or businesses owned by other minority groups or women-owned minority groups, of course? But they often are a disadvantaged group when it comes to business.

And so, I think thinking differently around that and procurement is definitely still lagging in that space. And so, I’m not surprised to hear that that’s a space that’s falling behind. But again, I think it’s about really being able to demonstrate both, that if you have a diversity angle in your business it is being able to demonstrate how that aligns with the organisation’s objectives, whether or not they recognise them as a diversity goal or not.

Darren:

Yeah. I find it interesting, the conversation around diversity, equity, and inclusion. Last year during the height of the lockdown, through our business in the US, we were approached by a major advertiser, huge, huge business. I mean, we’re talking 50,000 plus employees. And the inquiry was from the procurement team as to whether we could benchmark not just agency fees, but also agency diversity.

And it was an interesting conversation, which at one point, I asked, “Well, for your own category that you exist in, do you have benchmarks for diversity within your own business?” And there was silence at the other end of the video conference. It was like, “Well, we’ve not actually thought of that. We’re looking at our supply chain, but it’s not my job to look internally.”

I’m sure if I had the human resources director on the call, they probably could have answered that, but the poor procurement person was wrong-footed because they were so busy looking for someone to help measure diversity within their supply chain, but they weren’t aware of the same approach being taken to their own employee base.

Matt:

Yeah, it’s interesting. And that sort of points to a bit of a, I guess, a dissonance that I recognise in the way that I interact with the procurement profession. I’m often encouraging procurement to recognise that the influence that they have in their supply chain is far greater than the influence they’ll ever have inside their own organisation.

So, I have mixed feelings when I hear you sort of reflecting that from the supply chain. I’m like, well, good. I’m glad that procurement is asking those questions and encouraging change through their supply chain, even if their own organisation is not necessarily there yet. Because as an individual, that’s maybe where you can have your greatest influence.

But I recognise the challenge from a supplier saying, “Well, do as I do, not as I say,” and you’ve got to walk the walk as well as be able to talk the talk. So, I think there is a bit of tension there. But I think it is worth everyone understanding that often, procurement people don’t have the influence internally that they would like to have.

And often, the greatest change they can make in the world is actually by helping their suppliers, ideally, rather than forcing their suppliers, but helping their suppliers to adopt more diverse practices and more responsible practices. So yeah, it’s interesting to reflect on that from your perspective.

Darren:

Well, I have this very simple approach to social justice, and that is what’s good for the goose is good for the gander. So, if you’re going to be enforcing or wanting to … they weren’t saying enforcing, they were interested in understanding the diversity within their supply chain. So, I won’t say they were trying to force it.

But I think you always start at home before you start to look at others and start to encourage them because one of the best ways of bringing about change is by example. And it’s interesting something you said before about cultural change because it’s only very big companies that really can afford to have a dedicated procurement function. You have to get to a certain size before this becomes a value proposition.

And yet, from all of our work with agencies, in the last couple of years around diversity, environmental sustainability and the like, it’s the smaller agencies and the independent agencies that are able to move the fastest in having a modern slave react policy that’s actually enforced, that have a process and a policy to achieve the zero net emissions and to expand that through their supply chain as much as possible.

The smaller companies are able to do this and yet, I’m wondering —I’m leading to the question because you’re talking about one of the things you’re committed to helping organisations get a more diverse supply chain, either by helping suppliers to get into contracts that bring diversity to that relationship, or for procurement to understand how to deal with those.

And the reason is that I still see big companies wanting to do business with big suppliers and this ‘elephants unite’ approach still is maintained. And yet, there is so much innovation and so much change happening at that much smaller level. Where’s the opportunity. Where’s the breakthrough?

Matt:

Yeah. Well, I mean, I think what you’re pointing to is that culture change piece that I mentioned before. I do think that’s a classic example of where the direction we’re heading is not always born out by the way that we think and operate.

It’s that old story of no one ever got fired for hiring IBM and that’s still a very significant paradigm that drives a lot of procurement thinking; the avoidance of risk. And there’s a real I think challenge there in adopting a new, smaller, more diverse supply. There’s an element of risk there.

So, I think it goes to the way that we measure and encourage risk in organisations and having a broader strategic focus that allows us to say, well, actually, taking some risk here is going to allow us to benefit from other things over here and that is changing. But I think that change is often quite slow. And I think it relies quite heavily on the quality of the procurement professional to actually draw those dots.

And also, the quality of the salesperson on the agency side or the supply side to help draw those dots between saying, “Well, actually, we see that this is somewhere that your organisation’s heading. We see this is something your organisation’s committed to, and here’s how we can help you deliver that strategic objective, whether or not it’s clearly articulated as a diversity goal or a sustainability goal.”

It’s about being able to align your value to the stated objectives of the organisation. And sometimes, it’s about the supplier helping the procurement person to join those dots as opposed to the other way round. I think it always comes down to that sort of strategic focus of the organisation and how do we draw the dots between them?

Darren:

So, Matt, the audience here is marketers and agencies and so, where do you see the opportunity for them in the way that they’re working with procurement within their organisations or as part of wanting to win business through procurement into these organisations? Is there a time for them to start to look for the value propositions outside of dollars and cents? Or is it still very much a dollars game as you said?

Matt:

Well, I think you still have to be able to map it back to the dollars. I think this word “value” is perhaps overused in the procurement space, but I think it’s really core to both sides being able to understand and open up the conversation beyond price.

I mean, I do a lot of work in the negotiation space and I’m always thinking of price, it is the worst metric on which to negotiate because a dollar less for me is a dollar less for you. You know, there’s no innovation, there’s no benefit to haggling over dollars. You have to be able to establish something that is low-cost to me to give high-value to you as a supplier.

And so, again, I think that’s where some of these innovations around sustainability are a really big opportunity to be able to look beyond price and to be able to demonstrate value beyond that. I think particularly in marketing, I think, again, it comes back to that opportunity for storytelling. I don’t think procurement by their nature are very good storytellers. I think that’s one of the big challenges now that we’ve got with sustainability, is we are actually not used to talking about what we do in any language other than finance.

And so, I think that’s an area that marketing and then the agencies that work with marketing can really help to align with procurement and say, well, actually, there are some really good stories in the supply chain now that we’re starting to want to get out there.

And I think that’s an area where marketing and the marketing industry can demonstrate their value to procurement and start to collaborate more with procurement in a less transactional way. I think that’s always the challenge. If your only relationship with a procurement person is through the tender process, it’s going to be very hard to change anything, to change the status quo, to dislodge an incumbent.

But if you can start to collaborate more and build relationships — and I think you’ve mentioned that you’ve got a mentoring program within the industry, I think that’s a great opportunity for marketers and procurement people who are interested in the marketing space to work together and help each other in a way that’s not transactional.

And I think there’s a big opportunity for marketing and agencies to help procurement tell their story better and to get more interested in what’s going on in the supply chain as a way of getting to know procurement better and getting in front of procurement people at a point at which is not a hardnosed transaction.

Darren:

Yeah. Well, look, Matt, we’d love to get more procurement people into the marketing mentoring program because I think the reason for setting it up was to actually create opportunities for people in various silos but all related to marketing, to actually have a place to share wisdom, knowledge, experience on that basis. But if you’ve got any suggestions on how I can get more procurement people there, I’d love to hear them.

Separately to that, one of the things that that we see is that a lot of people talk about diversity as something that’s important to do, but in actual fact, agencies have a really good business case for needing to be more diverse. And that is cognitive diversity. That all of the evidence shows that creativity and innovation come when you bring together pools of people from very diverse backgrounds and that’s all sorts of things.

It goes beyond gender, sexual orientation, ethnicity, and the like. It comes down to life experience and perspectives and things. So, it’s every aspect of diversity. And then creating respectful, but challenging environments is where the source of innovation and creativity comes from. And I always think that if you wanted to build a great business case for it, there you are. The one thing that people are willing to hunt for, to buy, to tap into, is innovation and creativity.

Matt:

I think that’s right. And actually, I think procurement has a very strong business case for diversity as well. And that’s around resilience, supply chain resilience. There’s a lot of evidence now that a diverse supply chain or any diverse system is going to be more resilient than one that’s not. And I think that’s, again, something that is working for very different reasons, but towards the same goal, diversity is important to marketing and procurement perhaps for different reasons, but they’re both very motivated to achieve that.

And again, with all of these negotiations about drawing the links between each other’s worlds that makes it possible to say, well, this is a shared opportunity, as opposed to this is something you want, and this is something I want in there mutually and diametrically opposed.

Darren:

Now, we’ve talked about quite a range of things here around sustainability, environment, diversity. The other thing that comes up is obviously, ethics as well. And people often really struggle with a conversation around ethics because the first point is, well what is ethics?

I remember meeting with a CEO of a major financial institution, and his belief was that ethics is making tough decisions. And I said, well, no, that’s just making the tough decisions. That the best working definition I’ve had is making the decisions that do the least harm, which I thought was a really good definition of ethics.

Matt:

Yeah, look, it’s an interesting space and I totally agree with you.  I think people talk about ethical procurement and people mostly know what that is now, ethical sourcing ethical procurement.

But when you get into the detail, what are the ethics of marketing procurement? I think people are much less clear. It’s like, okay, well, what are the ethical dimensions of this category versus others? And I think people do struggle more with that. And I think the only way to unpick that is to have discussions and debates because I think typically we often rely on what’s legal rather than what’s ethical. And I don’t think they’re the same.

I think increasingly, the law takes a long time to catch up with ethics. And so, I think procurement certainly as a profession has been very driven by compliance historically, and even so, even now with the modern slavery legislation, I think there’s a really interesting, different conversation around, well, what’s our compliance obligations for modern slavery versus what’s our ethical one?

And fortunately, I think you’re seeing the modern slavery, even though the bar for complying with the modern slavery legislation is arguably very low, a lot of organisations and driven by a lot of procurement, in particular, are taking that up a level and saying, “Well, what do human rights mean more broadly?”

So, modern slavery is at the worst end of this, but actually, when we look at how we treat human beings more broadly through our supply chain, within our organisation, there’s actually a human rights agenda here, which is much bigger than modern slavery, and it actually opens up a better conversation around what’s ethical. And I think that’s true in the marketing category just like any other.

Darren:

Matt, this has been a great conversation and perhaps we can have another one about ethical procurement in marketing in the future. We could throw in Facebook and all sorts of people into that mix.

Matt:

Oh, absolutely. There’s plenty to get stuck into there, for sure.

Darren:

Matt Perfect, thank you for joining me here on Managing Marketing. It’s been a terrific conversation. I can definitely see that procurement is heading down the path of being the good guys and not just the cost-cutters. Is that the future that you’re seeing?

Matt:

Yeah, absolutely. I’ve kind of always had a bias towards procurement as the good guys, but I’ve certainly changed my view on what good is over the years and changed my own goals and values around what I believe to be good.

But I think the stakeholder view of business is something that I think is really becoming much stronger now and whether you’re marketing and your view is really to look at the consumer and the customer, or whether your view is HR to look at the employee stakeholder or whether your procurement view is to look at the supplier, and the workers in your supply chain as the stakeholder, that stakeholder orientation is really at the heart of what good business is.

And so, I think if you have that stakeholder view in your work, then you’re going to be on the good side of the work you’re doing.

Darren:

So, Matt, just before you go, just a final question for you. And that is if, in your current role, you could change anything about the way procurement is perceived in the marketplace, what would it be?

Ideal for marketers, advertisers, media, and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here

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    Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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