Our “Procurement Experts on CPO Rising” series continues today with an excerpt from my 2021 episode of the Procurement Rising Podcast – Bill Cooper, former Associate Vice President and Chief Procurement Officer for the UC system, now retired (click to listen to the full interview). Note that this excerpt has been edited for readability.
The Role of Procurement in Higher Education
Andrew Bartolini: So, Bill we were talking about where procurement is today. As the CPO of the entire UC system, you think of California and its progressive policies, as well as the student stakeholders as a more progressive voice relative to the standard business structure. Talk for a moment about the role of procurement in higher education and what the success factors have been for you as a CPO first and foremost. And then more broadly, where do procurement organizations need to focus to be successful in higher education?
Bill Cooper: I was like many folks who made the transition from private industry into higher education. There was an instantaneous shock of where did they get these people from? I came from these experiences where you had mandates and a clear bottom line. When we have this contract, this is what gives us the best value and you introduce that. However, when you get into higher education, none of that really exists. It’s all about the value proposition and influence. And again, it’s the most decentralized organizational structure.
So, if you think about a major university campus where there are several schools [e.g., school of business, school of medicine, etc.] they are all autonomous in their operation. They have they own budget and think of that money as their own, even though it’s the university’s. And they all are myopic in their focus, which makes them marvelous. And so far as the researchers and whatnot, it makes them difficult as stakeholders and clients.
You have to recognize that’s where they are, and this is the longstanding tradition of higher education. So how do you operate there? Again, develop a value proposition that speaks to their particular needs. You have to understand what their currency is, so to speak, because you don’t have a monolithic stakeholder group out there. I used the balanced scorecard as one approach. When I’m speaking to the executive leadership, I can speak in terms of ROI. And by doing this, we’re going to look over our cost, and identify where more dollars can be freed up to spend elsewhere. However, if you take that argument to a science faculty or researcher, you’ll most likely get nowhere. To them, you have to show how are they going to get more uninterrupted value out of what you’re proposing. So for researchers, if I can show them that by lowering an item from this supplier, then they’ll still be able to get what they need, but also free up money that allows their budget to then hire another lab assistant.
So, that value proposition is the ‘why.’ The biggest failure that folks make too often in procurement and in other administrative functions is they are always speaking to the ‘how.’ Here’s something we want you to do, and this is how you do it. If you don’t answer the ‘why,’ you’ve lost your client base. Why is it to their benefit to do what you’re asking them to do? That’s why you should always be connected with the ultimate mission of your organization. The ultimate mission of the University of California is teaching research in public services, not procurement. We have to make sure our message is always showing and always answering why this furthers that mission for your particular department.
This is key to any success that you’re going to have in the higher-ed environment. You always have to make sure you have that connection. It’s more difficult in the private sector. When I was at Revlon, I made sure my staff and buyers went down to the manufacturing line and saw the results of their procurement actions. We bought the bottles of the caps and the chemicals, and all of this that went into a particular product. When you see that finished product come off the line or see the product in the store, you’re connected to it. When you’re buying things for a university, it’s more indirect spend. And calling it indirect is one of the problems because there’s not that connection, but what you’re buying is critical to the organization. It makes it more difficult to convey.
As leaders, we should always make sure that our folks understand that their actions, their procurements are directly supporting the ultimate mission of the university in more ways than just the dollars. That’s the key. It’s so often that you need a burning platform. A burning platform comes along once in a while and usually created by some horrible situation, and that’s what we’ve had in the last year and a half. I’d never in 51 years heard of a president getting up at a conference and speak about procurement and use the term supply chain. And now you hear it everywhere. It’s the realization of what supply chain is about, and we have to take advantage of that right now. And this is the time that we can. As an industry and as a discipline, we can make headway. When the light’s shining on, you either rise to the occasion or you run and hide, and this is the time to really rise to the occasion.
MORE CPO TOPICS
Procurement Experts on CPO Rising – Transitioning Into a New CPO Role
Procurement Experts on CPO Rising (Mergers, Acquisitions AND CPOs)
Procurement Experts on CPO Rising (Deploying Technology During a Pandemic)
Procurement Experts on CPO Rising – The Procurement Diagnostic
