Five 'must reads' for procurement professionals

Over the past couple of weeks I have seen a number of posts here on LinkedIn about ‘must reads’ for procurement and supply chain professionals. These posts mentioned books about procurement principles and management, spend analysis, supplier evaluation, negotiation and more of these theoretical job content related topics.

All these books are about some sort of approach or methodology which can be used to improve one’s performance. However, in my opinion, this is not the area in which most procurement professionals are lacking in knowledge. In addition, it supports the idea that procurement is a methodical and rational kind of business. Which, by the way, many procurement professionals are trying hard to prove in practice, by boring their colleagues with benchmarks, business cases, analysis based on numbers and other rationally valid arguments. A popular phrase being ‘fact based purchasing’.

The key area in which procurement professionals can use some broadening of knowledge and insight is not about methodology and models, but is about ‘people’. We are in the people-business. Our customers (the ones who provide our company with money) are people. Our colleagues whom we need to serve with our professional advice, are people. And our suppliers are people. Companies don’t do business; people do.

As procurement professionals we have been taught very little about people and how their brain works. Education and training are mainly aimed at processes, models, structure and more rational stuff. But we need to realize that people are not driven by ratio. They are primarily driven by emotion and are predictably irrational. Which is why my ‘five must reads’ for procurement and supply chain professionals are not about procurement or supply chain at all. They are about people, how the brain works and how we can use that knowledge to our (professional) advantage. Here’s the top 5.

1. How to win friends and influence people (Dale Carnegie)

This book was first published in 1936 and it is no rocket science. Actually, when you read it you will think ‘what’s new about this’, it’s so obvious. But when I’m honest, I violate the basic rules on a daily basis.  I like the subtle nuance between ‘making’ friends and ‘winning’ friends, because there is certainly is a difference.
Dale Carnegie mentioned 9 different leadership principles. In 2014 these principles have been tested by using brain scan technology. Of these 9 principles, 7 were proved correct. The other two were ‘unsure’; in other words, they could not be proven right, nor could they be proven wrong. Not bad for 1936. If you don’t read any of the other books, read this one for sure. When you feel that the thirties examples are not easy to grasp, you can read the update of this book, published in 2011, called ‘How to win friends and influence people in the digital age’, which uses some more up to date examples to illustrate the basic principles.

2. Thinking fast and slow (Daniel Kahneman).

In this book, Daniel theoretically splits our brain in two sections: the ‘fast thinking brain’, labeled system1, being the part with which we don’t consciously think and the ‘slow thinking brain’, also known as system 2, with which we actively think; where we deliberate. System 1 is what actually keeps us going. It is primarily our ‘automatic pilot’ and is highly dependable on our ‘believes’ and ‘convictions’ and controls over 80% of our actions. However, we commonly think that system 2 (our ratio) is in control. Which it isn’t.
Because we are in a profession with a high level of prejudice (‘procurement is about cost reduction’), this is a very interesting book to read and it will definitely reframe your thinking (and hopefully thus reshape your actions).

3. Predictably irrational (Daniel Ariely).

Daniel is a professor of behavioral science (or psychology). Through numerous tests, he shows how irrational we humans are. Interesting to us as procurement professionals, since we usually try to appeal to the rational side of our colleagues in order to convince them and win them over to our point of view (the term ‘no brainer’ comes to mind). People are not rational and are not objective. Learn to deal with that. The main benefit of this is however that people are easily influenced. Which we can use to our advantage. Which brings us to must read 4.

4. Influence, the psychology of persuasion (Robert B. Cialdini)

‘Manipulation’ is not a positive phrase. However, it’s what this book is about. But we rather call it ‘influence’ because it sounds much better. In his book, Robert describes six basic triggers for people to behave in predictable ways. Reciprocity, Commitment and consistency, Social proof, Liking, Authority and Scarcity. It is actually what we see in commercial communication each and every day. Advertising uses exactly the same principles to influence our behavior as consumers. And why would you think that we would behave differently as business ‘consumers’. Right, we don’t. We just need to justify it afterwards based on ratio. But our initial triggers are based on emotion.

5. Switch (Chip Heath and Dan Heath)

This is a book about change management. What I particularly like about the book, is the analogy the brothers Heath have borrowed from Jonathan Haith (from his book ‘the happiness hypothesis’). They use the Elephant, the Rider and the Path. The Rider represents the ‘ratio”; our deliberation of the pro’s and con’s of certain actions; our analytical skills. While the Elephant stands for our ‘emotion’; what we feel, what motivates and drives us. This clearly shows the balance of power between those two. You can imagine that when the ratio says ‘turn left’ (rider), but the emotion says ‘dead ahead’ (elephant), the emotion gets its way; the elephant just plunders on, neglecting the pull on the reigns of the rider. In our profession, we usually try to appeal to the rider (ratio), whereas the elephant (emotion) has far greater power. Use this to your advantage. The path describes how we can direct both the rider and the elephant in a certain direction. We are faced with this every day. Take road signs; certain procedures we need to follow. Like you having to withdraw your banking card from the ATM before you can retrieve your money. How likely is it for you to forget taking your banking card?

Happy reading.