There are a lot of popular buzzwords in the business world. Some have a fleeting 15 minutes of fame while others seem to endure forever as overused or misused terms. "Strategic" is perhaps one of the most overused (and misused) terms in business today -- enjoying that status for quite some time. As it relates to supply management and procurement, "strategic" is being misused in at least two respects:
- Form over Substance: Simply adding a few bells and whistles to conventional purchasing and then slapping the word strategic onto the process or department name is not the same thing as adopting the process as it is intended. (This point is made strongly in the book "Straight to the Bottom Line®" by Rudzki, Smock, Katzorke and Stewart)
- Dumbing Down the Process: Equally concerning are the companies that at one time employed a genuine strategic sourcing process, but have now "dumbed down" that process to be a nonstrategic, tactical ghost of what it used to be
The second situation described above may in some cases be due to the temptation of quick wins described in my last post, and in other cases due to a change of leadership and/or losing sight of the value of staying strategic.
Who are we trying to fool? The reality is compelling: there is a huge difference in performance between world-class organizations employing strategic processes compared to companies stuck in conventional purchasing practices. Research studies from a variety of research and consulting firms offer quantitative proof that it not only pays to make the transformation to strategic, but it pays to maintain that commitment over the long-term.
What it takes to do that will be the subject of a future posting.
Robert A. Rudzki