The Opportunity Cost of Purchasing’s Time
My passion is making this profession better. One person, one department, one company, and one industry at a time.
Asking the right questions always points me in the right direction. However, I’m going to give you a warning: I frequently ask questions knowing full well what the answer is going to be.
In such cases, the goal is not for me to get the answer. More frequently, it’s for YOU to get the answer.
So riddle me this: do you have enough time on your schedule to prepare for your big deal negotiations the way you really want to, and the way you think you should be?
We both know the answer to that question. For my part, I’ve been asking that question to thousands of purchasing professionals for 20 years in 15 different countries. That’s a big enough sample size, right?
Now start thinking about monetizing your time. I’m serious. Your time as a purchasing professional has tremendous value. If you had a Ferrari, would you use it to deliver newspapers or shuttle people to the airport for a fee? Why do you think your time as a purchasing professional is any less valuable?
You are trained to negotiate hundreds of thousands and chances are millions of dollars for your company. And you’re not getting the time to focus on doing that the way you want because you are stuck spending your time on _____________.
So fill in the blank. What is it? What could be more important than preparing right to spend the company’s hard earned money properly? You tell me what is more important than this fiduciary obligation you have to your company as a purchasing professional. What is it that is so important that you’re willing to stifle your career for?
You see, more than in any other business profession, everything you do with your time has a purchasing professional has an opportunity cost. If you’re sitting in a weekly waste of time meeting with whomever in your company, you could have been planning for, preparing for, and engaging in high stakes, high value negotiations instead. That’s the opportunity cost.
On top of the opportunity cost that spending your time on the wrong things brings about for your company, it’s also impacting you directly.
Spending your time on the wrong activities results in negotiation outcomes that aren’t as good as they could or should be, which then ultimately impacts your performance reviews.
Your performance reviews are then tied directly to your career and income growth, right?
And guess what, it’s deceiving focusing on the wrong things. Why? Because your customers and partners are really happy because you’re dropping everything to focus on them. Making sure no feathers are ruffled. Making sure everyone’s happy.
But happy customers and business partners don’t equate to improved purchasing results. They just equate to happy customers and business partners. Don’t over analyze it and don’t be mistaken.
And it’s also frustrating working on the wrong things. Why? Because these things don’t end up on your status reports or your performance reviews, and even if they do, nobody cares. Just because you shoe-horned it into your status report doesn’t make it valuable.
Sorry to be so blunt, but if I don’t communicate directly, then change doesn’t happen, and my job is not to write or speak or teach or consult. Anybody can do that. My job is to create change. That’s what companies pay me a lot of money to do.
So go ahead, take a look at your calendar and see where you are spending your time. Then take a look at all the unscheduled activities you are spending your time on. Then you tell me if you are controlling your schedule, or if your schedule is controlling you.
So make the change. Monetize your time and view every single thing you spend your time on while working as an opportunity cost.
Ask yourself: “Will spending my time on this activity make my status report and performance review read better? Will this look good on my resume? Will it help me perform better in negotiations and in delivering breakthrough TCO for my department?”
If the answer to either of those questions is “no”, then we have a problem. Don’t feel bad. Every single purchasing professional is facing this problem.
But the issue is not that there is a lack of awareness of the solution. The real issue is that there is a lack of awareness that there is a problem! Yikes.
So now you know. But don’t go back to business as usual. Now you need to make the change. Take control of your schedule. Don’t be afraid to say no to people. Even if it’s your boss. Manage your manager.
Guard your time like you are guarding Fort Knox. This is your one and only chance to take control of your career and spend it in the right areas.
We are in the best profession in the world. Don’t blow this opportunity. Having great skills is a waste if you don’t allocate time to use them smartly. Now go off and do something wonderful in your purchasing career.
Talk with you next week!