ProcureTechSTARS with Lars Kuch Pedersen, Founder and CEO, and Matthias Toepert, COO, of LeanLinking a Supplier Management platform enabling procurement to realise greater supplier value creation, better supplier terms and save significant time.
During the conversation, they shared their thoughts on squaring the circle, reducing leakages, ‘muda’, hardcore and making the world a better place.
1. What’s LeanLinking’s mission?
LeanLinking’s mission is to fundamentally unlock value in the supply chain, by empowering supplier and procurement managers with facts and insights to increase bargaining power for the organization, as well as increase supply performance, responsiveness and compliance in the supply chain.
LeanLinking improves the way buyers and suppliers work together by providing data that allows fact-based decision making. We firmly believe that to build confidence and trust it is essential to make decisions that everybody understands.
We’re living in a world where we with changes on an unprecedented scale: Just look at inflation, continued disruption to global supply chains, and external shocks. In this macro-economic environment, which will not go away any time soon, customers need to become the “customer of choice” for their suppliers; this means they need to treat them differently than they did before.
If you look across industries, you can see those companies that have been historically kind to their suppliers are doing a little better.
However, at the same time while preserving the relationship, the customer needs to make sure they protect their own margins. During high inflation, standing still means regression: if you do not engage commercially with your vendor base, your investments are going to lose value. So procurement these days has to square the circle of preserving relationships with suppliers while still driving commercial impact.
The world is ever more complex, and to manage this complexity you need to have the right tools in place to help make good commercial decisions. That’s what LeanLinking does.
Regarding our USP, that is something embedded very deeply in our vision.
2. What have been the most significant decisions so far?
I’d say there were two major decisions to build the two products we have. LeanLinking started out with the Relations solution, which is all about supplier management, supplier relationship management, supplier governance, supplier performance management, and supplier compliance management. Next month, we will be launching our new product: LeanLinking Deals. It is a negotiation management solution that empowers and help negotiators negotiate and renegotiate with suppliers through a fact-based and semi-automated process.
Two decisions stand out for me.
Our Supplier Relationship Management product has historically focussed on SMEs. We then decided to pivot our offering to enterprises. This change helped us to better understand requirements and adapt our features to drive higher impact and reduce leakages in global value chains.
“We still very much believe with $40 trillion in global trade flows, about 5% of that is being lost in value leakages. If we could capture only 10% of this leakage, just imagine what it would mean to give $200 billion back to global communities and people subsisting on less than 1$ a day.”
When we decided on that pivot, we realised ‘just a platform’ or ‘just a process’ doesn’t quite cut it. We need to supercharge whatever we do with the content and knowledge that provides guidance around how to drive those value capture processes. That’s been a key part in our product innovation and creating a strategy to help define the right governance for a given supplier relationship, manage performance against clear targets, and create corrective action plans to develop the supplier relationship.
This is then ‘sparked’ in our second big decision within negotiations and our DEALS product; we need to give new tools to buyers that really address foundational problems. Take RFX as an example. If you think about it, how often are you really changing your vendor set? In 80-90% of cases when you are tendering, you are not sourcing new products of services but something that you have bought before; if you end up tendering, then you are going to stick with one of the incumbents 80-90% of the time anyway. So in 65-80% of cases, you are ill-served by a decision to launch an RFX. In the end, the reason to run a tender is competitive tension into your supply chain and drive better prices, resulting in tremendous efforts – both on your side and on the suppliers’ side. LeanLinking says there is a better way to do that: rather than subjecting a lot of vendors that you’re already working with to all of this work that doesn’t matter or is indeed meaningless, this energy can be put into good renegotiation by leveraging internal data and bringing in external data to make better decisions. That is why we have invested into creating DEALS, to improve how buyers and suppliers create positive friction and get to better results faster.
3. What do you look for in the perfect customer?
Openness to innovation and to do something new.
With our new DEALS product, we took a different road to product development, product creation and customer management. We co-created the solution with Roche, one of the Top 3 pharma companies in the world. This upends the typical product development process of build something in the ivory tower, bringing it to market, testing it, and inching your way to product-market fit.
With DEALS, we tried another approach. After we decided to invest into this product about two years ago, we started discussed with our client partner, Roche. Luckily, Roche has incredibly forward-looking Procurement leadership; they shared our vision, and decided to take the risk of moving forward with us in a co-creation partnership.
The perfect customer is willing to co-create with us and our team to build something great, based on our core product hurdles that makes sense to solve in their corporate environment. We have proven this case together with our friends at Roche and it has been a fantastic journey! It has really shortened the time to market, and then product to market fit by 6 to 12 months and we are looking to do that again. Regarding the product core, if companies are interested in how I can improve the way that I work with my suppliers beyond just onboarding, then we are super keen to help out. This means driving value from suppliers throughout the relationship lifecycle, commercially engaging with them through negotiations.
4. What are the foundations of a great team?
I believe a great team is a great mix, like competences, different levels of experiences, diversity, nationalities etc. And you need a glue that keeps it all together, because getting them all to work together is a fine balance. A great software developer is typically not the same as a typical great salesperson, but together they will create exceptional results.
“Having a joint vision on why we are in this together. That is the number one goal because it allows you to go the extra mile to develop good things with passion”.
Sharing that vision is the glue holding everything together.
When hiring, we are looking at three things that we need in our teams. Subject matter expertise: we will not hire somebody into our Sales team who does not understand what procurement means – that doesn’t make sense; and we will not hire a UX person who only has UI skills. The second thing we look at is a willingness to go the extra mile. Great things don’t happen between 09:00-17:00, they happen between 17:00-09:00. And the third thing is intellectual curiosity and an openness to work with different people.
Those properties are attracting search. The glue that holds it all together is our joint vision.
“That demonstrates a combination of subject mix, expertise, willingness to go the extra mile and work with different characters.”
5. As we emerge from COVID what will you be doing differently?
Lars & Matthias
There is a much higher acceptance of online meetings from the client side which was not there three years ago. In one of my previous roles in international Sales, I was away for more than 250 nights, and went on about 150 flights – in just a year. Now I think companies are trying to strike a good balance between time spent on site with clients and then what can be done remotely. Similarly in LeanLinking, we are not going to have a 100% on-site/ in-office policy – that just doesn’t make sense to our business and I think it’s counter-productive. You manage the output – that’s what counts.
6. What is the vision for LeanLinking in the future?
We’re launching our new product shortly, LeanLinking Deals, our negotiation solution which we are extremely excited about. It will be interesting to see how the market is going react to it. We are going to continue growing over the next 5 years, mainly supported by new funding so we can accelerate what we are already doing by expanding our reach not only in Europe but also in North America and Asia.
“We want to grow and conquer the world!”
We have had very high growth during the last year. This past year, we’ve taken a bit of a breather and focused our entrepreneurial energies into more product development in Relations and Deals. We want to offer that in future, therefore are continuing to build it now so we are ready for future investment.
We are going to double down on development, particularly in our Deals offering. We will continue developing our products differently with the help of a solution advisory board, where we invite other companies to join us and Roche on the journey we have started together. We want to focus development not only on features, but the whole community and its capabilities.
“The jury’s still out on whether we will be able to do it, but we certainly have enough passion and product. We’ve poured our hearts and souls into it and are convinced that that we will be successful!”
7. How are you doing good for the planet?
We are already making the planet a little bit better. We help customers understand their supply chain. We help partners remove ‘muda’ from the supply chain, which means removing waste in lean language.
We help bring experiences and issues on suppliers, delivery, services, hassle in the corporation itself, to procurement teams and supplier managers so they can act on it. They can meet with suppliers and discuss how to remove muda.
That’s fundamentally what we do today, because we see so many suppliers making the same kind of mistakes, which basically creates waste in the corporation between the partners. By bringing up these issues to the procurement team, it helps them to change processes and avoid the same problems happening over and over again.
I think there are 2 approaches; corporate and individual.
I think it’s our responsibility each day to make the world a better place. It starts with a simple thing today where you can make a change rather than going on preaching and posting about making the world a better place. Do that in your everyday actions: take a glass bottle with you, instead of disposable cups; take a bike instead of a car or an eScooter. Everyone can do something little everyday, and it will add up. And the same applies to our products: buyers and suppliers can work a little bit better together everyday, and that accrues into something great for both parties.
INSTANT LARS AND MATTHIAS INSPIRATION
1. What is your favourite book?
I too like Benioff’s book.
The second one is Wolf Hall by Hilary Mantel. The three novels in these series are fantastically well researched, and shed a completely new light on a period of English history where the main character, Thomas Cromwell, was historically considered the villain. Turns out that if you change your perspective by just a little bit, he actually is not. I find that an important lesson for life. It’s my comfort book.
3. What is your favourite piece of technology?
Uber! You might laugh, but in Denmark, we don’t have Uber. I use it every time I go abroad, and it’s annoying not having it in Denmark.
I would say video conferencing apps. I know it’s probably an uninspiring choice, but there are very few things in the world that did so much good as these kinds of technology. They allowed to see my kid, Yannick, who is four years old now, growing up; without Zoom and Teams and others, I would have to have spent a lot more time in hotels, conference rooms, and on the road. Now I can play Lego with my kid instead.
4. What’s your favourite way to celebrate success?
A champagne dinner party, followed by a sauna to help with the hangover!
I will turn on some easy-listening Jazz, sit back and think about what made that success possible – and enjoy an extra nice dinner with the family.
5. What is your favourite cocktail?
Gin and Tonic.
I don’t drink that much, but if I did, it would probably be an Old Fashioned.
1. Build confidence and trust with suppliers to reach your vision
2. Be kind to your suppliers
3. Reduce waste in your supply chain where you can
4. Work with people and partners aligned to your vision
5. Make use of people’s past expertise
6. Double down on development and innovation at key times to scale future growth
7. Turn your words into action and do your bit for the planet
LeanLinking is the #1 supplier management solution build to help companies improve supplier governance, relationships, performance, quality and compliance management. The DEALS solution provided AI-guided negotiation management capabilities. LeanLinking connects businesses with suppliers enabling a value growing collaboration reducing costs, risks and reaction times while improving supplier service, quality, performance and innovation.
Our industry is moving forward faster and faster, empowered by innovative, progressive digital procurement solutions created and led by inspiring teams. ProcureTechSTARS are the digital procurement company CEOs and Founders that are leading the change, they are entrepreneurs, engineers and architects collaborating to transform procurement and the enterprise. In an open conversation with these leaders Lance Younger will be discussing the highs and lows of building the future now, the challenges they’ve faced, their perspective on accelerators and hot topics, and what keeps getting them up in the morning (and keeps them up at night).