Procurement culture: East Coast vs West Coast

From dress codes to Thanksgiving dishes, there are established differences between the East and West Coasts of the USA that run through to business culture.

East Coasters communicate more, ahem, ‘directly’ than the laid-back West Coasters. In New York you’re more likely to find an office full of suits; in LA you’d be hard pushed to spot one.  A survey of 1.6 million Americans over 12 years by the Journal of Personality and Social Psychology found that this is more than just stereotyping – the North-East and mid-Atlantic states are home to a cluster of ‘temperamental, uninhibited’ inhabitants, whereas the West Coast attracts ‘relaxed and creative’ people.

Do these cultural differences extend to procurement? There is certainly a concentration of particular industries with their own strong cultures along both coasts. The West Coast is known for Silicon Valley and other entrepreneurial tech hubs, with finance and pharmaceutical firms representing the East – although surveys show that investors are backing tech companies in New York and Boston as strongly as San Francisco and San Jose.

We asked some top Procurement professionals from both areas for their opinions. Are the States united or divided when it comes to Procurement?

Industry v geography

 The strongest culture differences seem to be based on type of industry rather than geographical location, with the relatively young tech businesses on the West coast offering more opportunities and rewards for innovation, allowing the company to transform and typically creating a more ‘advanced’ procurement function. This is partly due to their freedom from the types of regulatory compliance required in the East Coast finance and pharma industries.

A senior Procurement director with an overview of both coasts said:

“In my experience, the tech industry tends to favor those that are strategic thinkers (transformative focused), while financial services tend to be more transactional focused (more tactical but good deal makers).  The former attracts more of the collaborator while the latter is more about the lone wolf or rainmaker.”

Tech companies generally focus more on branding and overarching business value, which leads to new business services offered and more assumption of responsibility for other functions. This can be the buildout of a supplier diversity program or the management of the contingent workforce program of travel desk.

The financial services culture is much more segmented by line of business, creating a procurement organization that is more focused on contractual deals, P2P optimization and risk mitigation (due to regulatory focus).

It’s also been observed that banking and financial services seem to be more focused on delivery and compliance / risk mitigation, with pharmaceuticals falling somewhere in between. Pharma companies tend to be well funded, like Tech, and trying to right size the organization. At the same time, similar regulatory pressures to Financial Services require regulatory oversight.  This does slow down the procurement process and can hamper innovation.

Overall, in finance and pharmaceutical firms, having strong category leads and risk management teams tend to be the key outcomes.  In tech companies (which are less regulated), risk management is not the same degree of concern.  This enables the companies to deliver business value in areas other than negotiations and operations.

Company maturity

Culture is often also based on the maturity of the organization, with less mature functions focused on getting work done quickly.  Working on contracts and setting up a strong P2P system would be initial goals.  As organizations mature, so do Procurement functions.  Margin pressure may require additional category expertise to deliver more business value, which can be found across industries and regions.

Robert Freeberg, Senior Director, Strategic Sourcing at Adamas Pharmaceuticals, Inc, said: “I do think that there is a mix of traditional and non-traditional procurement approaches, but I think this is more driven by the size and maturity of the company. I do believe there are cultural differences as well. The East coast seems to be more formal than the West. I also think that there can be differences within the company culture and indirect vs direct / supply chain / technical perspective, and part of this may be driven by the business (for example, sales is very different from research and development.”

It’s an interesting question for job-seekers as cultural fit is hugely important when deciding which company to work for. What if you’re East Coast based with a West Coast attitude, or your background is all in financial services but you find the highly regulated, traditional atmosphere frustrating? It may be time to shake things up and look beyond your expected career path for a place in a younger, more entrepreneurial company.

If you’re thinking of a career move on either coast – or you’re a client with a role to fill – get in touch with us our USA office.  Contact Rikard Lenkler at r.lenkler@bramwithconsulting.com or on (267) 388 9322 to discuss.

 

 

 


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