Bravo’s Mickey North Rizza facilitated a great discussion yesterday with the metaphor of “health” as a means for diagnosing the state of today’s procurement patient. The entire discussion was a backdrop for introducing Bravo’s new procurement benchmark, diagnosis, and improvement program (more on this later). In the meantime, her points that compare patient health to procurement organizational health are worth sharing – and spot on.
Live at the BravoSolution Event
Mickey began by questioning how we know whether procurement is healthy or unhealthy in our companies: sourcing, procurement, supplier relationship management, risk, quality, transactional/compliance activities, etc. Some audience members suggested that we can look at overall performance to gauge health based on input from stakeholders, suppliers, and others. Are we meeting our client’s requirements? Are we aligning them with our activities? These are some of the diagnostic questions to ask on the most basic level.
The next question Mickey posed is how do we measure the state of procurement, sourcing, and supplier relationship management health? Everybody knows that the worst way to diagnose yourself is WebMD, of course… Googling symptoms oftentimes leads us to believe we're dying from a common cold! And the same is true for procurement diagnosis.
A better way? Go to the doctor. In our companies, the equivalent is formally surveying our peer group (i.e., benchmarking), stakeholders, leadership, suppliers, and others. But I also tossed out the metaphor of diagnosis based on Western vs. Easten medicine (Western is all about tests – cholesterol, liver function, heart rate, blood pressure – while Eastern is more holistic). Both count in sizing up the patient, at least in my view.
We can measure health in patients both on quality of life and ultimate longevity. The same is true for companies looking not only at procurement leadership tenure, but influence and downstream results (i.e., profitability and greater sales, which can lead to better shareholder returns). But in procurement, we must also gauge health not just based on long-term objectives, but short-term measurement and activities. One question here is whether fighting the proverbial procurement fires is at odds with creating a healthier overall procurement patient. In other words, can we be healthy and still fight fires?
Answering this question comes down to the direction of our overall journey and how the fires fit in – and whether we’re actively focusing on fire-proofing for the future as we fight the fires themselves or not. Fighting supplier quality, performance, and on-time delivery issues – or internal fires based on non-compliance – are part of our lives. We can’t get around them. But as we engage in these activities, are we building a stronger, healthier procurement patient or simply raising our blood pressure in the process?
It’s a question worth asking.
As we expand on Mickey’s metaphor in the coming days, we’ll explore the concept of procurement health as a journey – and what you need at various stages to improve the overall state of the patient regardless of whether you’re approaching it as a walking heart attack or whether you’re starting as an athletic performer already.