If it ain’t broke – FIX IT! Challenging the procurement status quo

Charles Handy was one of the first business gurus I really enjoyed – he is an important business thinker, being one of the first to identify the trend for “portfolio careers” and the “virtual organisation”. But he clearly cares for people as well as theories and structures, and has a highly readable style. If you haven’t tried his books, I recommend starting with The Empty Raincoat.

Anyway, one of his ideas was around the “sigmoid curve”. That suggests that every "entity" first consumes resource, then has a growth phase, and eventually goes into decline. So the secret of longer lasting success is that you have to start something new while you’re still in a previous growth phase. If you wait till you are in decline, it will probably be too late.  In the chart below, point A is where you need to start anew, so by the time your first curve is in decline (point B), the new one is on the upswing.

Charles Handy: The Empty Raincoat (1995)

But organisations often don’t do this – “it’s all going so well at the moment, why do we need to change / launch a new product / expand our markets”?  And we are the same in our jobs and functions. While we’re being successful, why follow a new or different course? But that is exactly the time we should be changing. That idea is explored in our new “Comment” paper, available now for free download from our "Comment & Case Studies" section.

If it ain’t broke, fix it!” was the title, suggested when I was discussing this issue with Garry Mansell, MD of Trade Extensions (purveyors of fine sourcing software and services...).

You may feel that your procurement function is doing fine, or that you have a good grip on your spend category – but that is exactly the time you should be looking to see how you can make things even better. So in this paper, we look at Handy’s ideas, and how they apply to procurement. Then we get into a brief look at four areas where we perceive that many organisations could do better. Even where current practice is pretty good, there is room for improvement, for taking a different or radical view of what is possible.

The four areas are:

  • Market informed sourcing (advanced sourcing techniques)
  • Purchase to pay – usability and adoption issues in particular
  • Supplier and supply chain risk management
  • Staff capability and development

We also discuss just HOW you can pursue innovation, new and different ideas - we'll come back to that here next week and give some more highlights from the paper.

Anyway, it’s a fairly short, snappy (we hope) read – you can download it here, free of charge (registration required unless you’ve already signed up with us / Spend Matters US).

Voices (3)

  1. Market Dojo:

    I first encountered this line of thinking whilst working with engineering simulation, and it was described there as the ‘S’ curves. You start with an innovation, slow then rapid growth. As the market matures, and the growth slows then you try to find new innovation and hence a new ‘s’ curve starts. In that time it was a move from ‘normal simulation’ to ‘Realistic Prototyping’ which involved building models from the smallest elements up and coupling different codes. The key is really understanding when to make the change and what change to make. Completely agree that you dont want to wait until it is broke but also you dont want continuous change, more like the incremental change at the right times and the right direction (as Craig mentions). Obviously sometimes there are paradigm shifts in the market where large change is a good idea such as the move towards online SaaS applications which we have all seen in procurement.

  2. Craig:

    What you’re describing here is strategic drift. You’re not aware of any need to change and by the time you find out, the moment has gone and you either need to change drastically or die.

    What you say is absolutely correct. What incremental changes can we make to keep with the environment rather than let it get away from us? Very difficult to do in practice though. The need to have very well attuned environment scanning capability is very high and this is one of the hardest management tricks to pull off, in my opinion.

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