Let's Discuss Procurement & Transformation - Yes, Right in the Middle of a Polarizing Coalition / GNU Debate

I've spent more time figuring out how not to lose readers of this article in the first paragraph than I did looking at transformation statistics – and that's probably part of the problem. Conversations about transformation or inclusivity only ever happen if one of the parties resolves to tiptoe around the other. This hesitancy stems from the fear of offending, misunderstanding, or sparking conflict, which often results in diluted discussions that fail to address the core issues.

Transformation is, and should always be about fundamentally changing the economic landscape to reflect the diversity and potential of all people present within that economic reality. It requires honest, open, and sometimes uncomfortable conversations about the systemic barriers that have kept many from participating fully in the economy. Avoiding these discussions not only perpetuates polarization, but also creates an environment where future discussions default to timid, censored interactions.

We need to move beyond superficial engagements and commit to deep, structural changes that promote genuine inclusivity. This means acknowledging the historical context, addressing the disparities head-on, and implementing policies and practices that drive real progress. Only then can we create an economy that truly works for everyone.

So, What Role Does Procurement Play in all This?

Procurement plays a pivotal role in driving transformation and inclusivity within the economy - and there are a plethora of reasons to support this view. Not least of which is, that the procurement function sits at a unique intersection in the business. Operating, ironically, as a distribution center. Receiving information from internal stakeholders, translating that information into palatable, digestible chunks for external stakeholders, while simultaneously receiving information from external stakeholders and translating it into palatable digestible chunks for internal stakeholders.

In packaging and conveying information for and between stakeholders, procurement professionals hold an obscene amount of power to dismantle systemic meta perceptions and rebuild them in more equitable, inclusive, and transformative ways. We currently don't do this enough. And, we probably won't until we realize that the narratives we build, through the things we say, that don't make it into our recommendation reports, live far longer than the recommendations themselves.

What Do We Need to Do?

1. Supplier Diversity

Procurement strategies that prioritize supplier diversity are crucial. By actively seeking out and engaging with CAPABLE black-owned businesses, women-owned enterprises, and SMEs, procurement departments can ensure that economic opportunities are more widely distributed. This not only supports these businesses but also stimulates job creation and economic growth in underrepresented communities. It's silly that I feel the need to draw this parallel, but this does not mean we de-prioritize quality. Where a skill or capacity gap exists, our responsibility is to develop a capacitation plan that needs to be completed PRIOR to award and engagement. Often times this means that a few opportunities will pass while capacitation happens, and that is OK.

2. Economic Empowerment

See previous article on the pitfalls of BBBEE and what an efficient re-design should look like.

3. Capacity Building

Procurement can facilitate the growth and development of small and emerging suppliers. By providing training, mentorship, and access to funding, larger companies can help build the capacity of these suppliers to compete on a larger scale. This not only benefits the suppliers but also enhances the overall competitiveness and resilience of the supply chain. Mandatory capacity building should form part of selection criteria.

4. Transparency and Accountability

Implementing transparent and accountable procurement practices ensures that the benefits of transformation efforts are realized. This includes regular monitoring and reporting on procurement activities, compliance with transformation policies, and the public disclosure of procurement performance. Such transparency builds trust and ensures that transformation objectives are being met. Additionally, implementing more value driven approaches to sourcing such as no-price tendering and gamifies supplier selection level the playing field in a way that doesn't compromise quality.

5. Strategic Partnerships

Procurement is arguably most efficient when it is positioned to drive transformation through strategic partnerships. Collaborating with industry bodies, government agencies, and community organizations can amplify the impact of transformation initiatives. These partnerships can facilitate knowledge sharing, resource pooling, and the development of innovative solutions to complex challenges. A great example of this, is the work done by the triple threat of Anglo American South Africa Anglo American , Absa Group and Anglo Zimele. Some great folk there to share insights are Larisha Naidoo CA (SA) Mahlatse Shaibu Esen Covenden - (none of these good people have endorsed any of the views in this article - they're simply here in case you'd like to reach out).

Parting Thoughts

Procurement in most organizations is underutilized. It is ill-positioned and ill-equipped to play the strategic role it needs to. A role of thoughtful, intentional procurement practices that address historical inequities and build a more inclusive economy. One of prioritizing supplier diversity, supporting economic empowerment, building capacity, sourcing locally, ensuring transparency, and fostering strategic partnerships.

The transformation bill is due (bill in the context of what you pay at a restaurant after a meal, not legislation); But it requires courage, commitment, and a willingness to engage in difficult conversations. If we get this right, the rewards will be well worth the effort.