Why Cross-functional Teams Are the Primary Audience for SPLC’s Guidance v1.0

It might seem logical to assume that our Guidance for Leadership in Sustainable Purchasing v1.0 would be solely aimed at procurement departments and processes they manage.  In reality, the Guidance goes far beyond this, and that’s a key reason that it significantly departs from typical contract-by-contract, product-by-product approaches to sustainable purchasing.  In this post, I’ll explain why our guidance is intentionally designed for use by a cross-functional team tasked with addressing the sustainability-related impacts and opportunities associated with an organization’s enterprise-wide purchasing.

Leadership action goes beyond the purchasing function.

The Council’s mission is to support and recognize entire organizations for strategic leadership in understanding and taking responsibility for all of the consequences of all of their goods and services spending. This typically requires engaging actors from across the entire organization, for several reasons. First, some important areas of spending may take place without the involvement of the procurement department, such as electricity purchases which are sometimes handled by facilities departments. Second, purchasing professionals generally can’t “go it alone.”  They must work in concert with budget holders when changing status quo purchasing practices. Third, an operational change may be the most meaningful leadership response to the discovery of impacts in some purchasing categories. For example, one of the best ways to reduce the upstream environmental impacts associated with a university’s food purchasing is to implement food waste reduction measures, thereby enabling the purchase of fewer food products, which eliminates the upstream impacts of those avoided purchases (and saves money in the process!). Therefore, for an organization to exercise leadership in addressing the consequences of its purchasing, it must consider all its purchasing (not just that handled by the Procurement Department), collaborate with internal stakeholders outside the Procurement Department, and evaluate non-procurement actions that could address those consequences. The Council believes the formation of a cross-functional team is the most effective way to implement such a strategic, organization-wide, and prioritized approach.

Cross-functional teams are essential.

The Guidance currently under development encourages organizations to convene a cross-functional team to assess the consequences of its purchasing and develop a plan of action for addressing them.  The “Getting Started” section provides guidance to internal sustainable purchasing advocates (who may be in any of a number of roles within the organization) on how to: A) enlist support for this approach; B) determine an appropriate scope for the team’s work; and C) structure team, internal and external engagement. The “Running the Process” section provides guidance to that cross-functional team on how to: 1) analyze the consequences of their organization’s spending; 2) create an action plan to address these; 3) implement that plan; and 4) measure performance improvements, as an iterative, continuous improvement process.

Diagram of SPLC Guidance v1.0

The procurement function is still crucial.

While the Council’s guidance is not limited to the Procurement Department, an organization’s purchasing professionals are central and vitally important to the cross-functional team described above. Purchasing professionals:

  • are the primary source of the purchasing data fed into the spend analysis,
  • have unique insight into the possibilities within current contracts, including contract renewal timelines, and
  • have specialized skills in data analysis, market research, bid design, navigating legal obligations, price negotiation, managing supplier relations and contract management.

So, while it is true that actions outside the Procurement Department’s responsibilities can sometimes be the most effective way to reduce impacts, it is NOT true that an organization can run this strategic process without the buy-in and participation of this Department.

An analogy: Climate Action Plans.

Organizations that have developed Climate Action Plans may recognize the Council’s recommended process. The typical climate action planning process includes an organization:

  • building internal buy-in for creating a Climate Action Plan,
  • making a commitment to assess its greenhouse gas impacts,
  • forming a cross-functional team to conduct and interpret the analysis,
  • identifying and selecting cost-effective mitigation strategies within a Climate Action Plan,
  • committing to Climate Action Plan implementation (including resource allocation),
  • tracking progress against the Action Plan’s goals, and
  • periodically repeating the process to create revised Action Plans.

The role of Facilities Departments in the Climate Action Planning process shares many characteristics with the role of Purchasing Departments in SPLC’s strategic sustainable purchasing process.  In developing a Climate Action Plan, the Facilities Department plays a central and vital role, providing a majority of the energy data and specialized skills that the cross-functional team needs.  But, there are many effective strategies for reducing greenhouse gas emissions that are not within the Facilities Department’s control.  Implementing these strategies require the cooperation of building occupants, budget-holders, buyers of plane tickets and electronics, and so on.  The success of Climate Action Planning processes at many organizations demonstrates that the formation of a cross-functional team is a great way to build buy-in, win cooperation, and get fresh perspectives that can lead to break-through wins.

Category guidance is intended for use by cross-functional teams.

As part of the Guidance development process, Technical Advisory Groups are developing guidance chapters for eight categories of purchasing:

  • chemically-intensive products,
  • construction & renovation,
  • electricity,
  • food,
  • IT hardware and services,
  • professional services,
  • transportation & fuels, and
  • wood & agrifiber.

While it may seem that these chapters are play books designed primarily for Procurement Department commodity managers, we expect, first and foremost, that they will be used by a cross-functional team during the Action Planning step.  After an organization’s spend analysis identifies the most significant opportunities to improve the social, environmental and economic performance the organization’s purchasing, organizations will use the relevant Purchasing Category Guidance Chapters to find suggested actions for their action plan.  For example, if fleet vehicle fuel use is a significant area of an organization’s impact, they could select from a range of strategies within the Transportation and Fuels Guidance, including procurement strategies, such as buying more fuel efficient vehicles, and operational strategies, such as promoting fuel efficient driving practices.

Tools for independent investigation.

If an organization wants guidance on a category not yet addressed by the Guidance v1.0 purchasing category chapters, the Council has created two tools that can help an organization investigate the impacts and solution strategies for any category*:

  • SPLC Worksheet: Key Factors Brainstorm – Use this to ensure that the category is evaluated for a wide range of social, environmental and economic sustainability impacts and benefits.
  • SPLC Worksheet: Solution Strategies Brainstorm – Use this worksheet to ensure that a wide variety of solution strategies are considered when searching for actions that can address a category’s key impacts and opportunities for benefit.

* Because conducting a thorough independent study of a category’s impacts and solution strategies can consume quite a bit of time and resources, we strongly encourage organizations to conduct an analysis of the impacts associated with their entire goods and services spend first.  Such a study may uncover another category that presents a greater opportunity to reduce impacts and produce benefits, and that therefore deserves the investment of the organization’s precious investigative resources.

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