Don’t Limit Your Potential: Become an “Opportunity-Centric” Instead of “Budget-Centric” Company

Spend Matters welcomes a guest piece from regular contributor Robert Rudzki.

Management guru C.K. Prahalad (who passed away in 2010) always told executives to think big. "Set ambitious goals and then figure out how to mobilize the resources to achieve them -- rather than the other way around. Most companies limit themselves because they focus primarily on what they believe they can afford." This phenomenon plays itself out during the annual budgeting process, and supply management is certainly not exempt in most companies. Consider the following three questions. Which one do you, as a leader, hear most often in your company?

  1. Can you get by with a few less people next year?
  2. What can you accomplish with a few more people next year?
  3. Ignoring current staffing levels, what could you accomplish if we gave you everything needed (budget for staffing, training, external SMEs, etc.) to maximize the benefit to our company? How would you improve performance (what's the road map for change and transformation)? What could be the likely results (what is the opportunity)? And what staffing (internal and external resources) would you need to accomplish the opportunity?

If you are like most leaders that I meet, question (1) is the one you are mostly likely to hear. A few procurement leaders hear question (2). And question (3) is typically heard only in companies with truly enlightened top leadership.

That, my friends, is an indication of the opportunity available to your company. Those companies that are open to a true ROI business case for supply management (question 3, above) have the best chance to achieve the full extent of the supply management opportunity. I personally refer to these enlightened companies as "goal-centric" or "opportunity-centric" -- a sharp contrast to "budget-centric." If you are budget-centric, you will be incrementalized to death. [note: a comprehensive review of this topic appears in Chapter 1 of the newly released book Next Level Supply Management Excellence (Rudzki, Trent)].

In a future posting we'll outline how you can accomplish the seemingly impossible: become an "opportunity-centric" company.

- Robert A. Rudzki

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