The Buying Team – Redrawing The Atlas Of Buying
Once upon a time a question like ‘who makes the buying decision?’ was easy to answer; one or two names were typically sufficient to describe where the power lay. But this is no longer the case, and nowadays sellers almost need a map of organizational buying to reflect all those who make and shape the buying decision.
A result of this is that sellers can easily end up talking to the wrong people – or even to the right people, but about the wrong things. This is particularly likely to happen if sellers are focused solely on selling to those individuals who freely made buying decisions in the past.
Managers Are Straightjacketed
Sellers are slowly beginning to realize that the age of the buyer as a free agent is over; individual managers can no longer simply write a check or sign a purchase order. They have become straightjacketed by purchase procedures, as a result of which their autonomy regarding purchase decisions has been greatly diminished.
These are some of the things buyers now tell us:
- Managers have had their sign-off thresholds lowered; indeed, in many cases these have been as much as halved.
- Even small purchases must be signed-off – it’s no longer a matter of senior managers ‘rubber-stamping’ requests.
- All purchase decisions are now subject to increased levels of scrutiny (at a local, regional and even global level) before approval is granted.
- There is a mounting burden of proof on managers looking to get sign-off on major purchases, and frequently even on much smaller ones.
Managers must therefore:
- Demonstrate that their plans are in keeping with changed organizational priorities and strategies.
- Show immediate and tangible results — that is, the quantifiable impact on key business performance metrics.
- Jump through hoops in order to get projects and purchases approved.
This is because more paperwork, committees and sign-offs are required nowadays for purchases managers previously had authority to approve on the spot.
“The locus of control with regard to buying has shifted from the individual to the organization…”
Indeed, purchases for as little as 10 or 20k may require the presentation of a mini-business case. The locus of control with regard to buying has shifted from the individual to the organization.
Redrawing The Map of Organizational Buying
In recent years, buying-power within large organizations has undergone some major shifts. It has moved down the hall, spread out across the organization and moved up in the elevator to the most senior levels. As shown in the diagram below, decisions are today being made at higher and wider levels throughout most organizations:
(click to enlarge image)
The center of control for buying decisions in most organizations has changed considerably. In a seemingly contradictory fashion, organizational buying decisions have become both more democratic and more autocratic simultaneously.
While the buying process now requires greater cross-functional teamwork as well as consultation with stakeholders, the ultimate power to make decisions has ascended to the top ranks of most large organizations.