Jules Goddard and Jason Busch with their Procurious Big Ideas Videos

Today we’re looking at a couple of the videos produced by Procurious following their recent Big Ideas Summit - many of the delegates (including me) recorded our own brief “Big Idea.” Jules Goddard of London Business School facilitated the Summit and we looked at the paper he wrote (a Fatal Bias) earlier this week, but his video is also now published.

In his two-minute video, available on the Procurious website if you register, Goddard challenges the whole notion of best practice. “If there is one idea that has come out of the business schools in the last ten or fifteen years that has really harmed the ability of business to create wealth for the world, it is the notion of best practice.”

He argues that by definition, it assumes that best practice must be the same for all the firms in a particular industry, so firms all emulate the same standards and become more and more alike. But markets punish commoditisation, so if all the firms become more similar, that will affect the market negatively.

Pursue unique practice, says Goddard, seek out “what is right for us.” Proprietary practice is what is key, the way we do things ourselves, which should be designed to differentiate the business. So let’s stop using the phrase best practice.

It is an interesting message, and one that might well make us question our procurement practice too. Competitive advantage won‘t come from doing the same as everyone else, that must be true by definition. So should we look at the “best” procurement firms (not that we are very good at even identifying them) and simply seek to emulate them? Or should we be thinking about what we can do to help our organisations succeed by being different? Another good question that we will leave hanging for now!

Incidentally, the best and most successful company I ever worked for, Mars, had competitive advantage right at the heart of its way of working. That was the explicit goal of the procurement function – to be better than Hershey, Cadbury or Rowntree.

Another one of the first videos to be published comes from my esteemed colleague from Jason Busch. He is much more of a petrolhead than me, and his video is around an analogy about gearboxes. Procurement has moved from being a “manual gearbox” to an automatic – but it is a clunky, first-generation automatic. What we need to be is the equivalent of the latest automatic transmissions – procurement functions that anticipate and learn so they can act smoothly and super-quickly for their organisations.

He explains it much better than me, and takes it into other more specific areas of procurement opportunity over his three minutes – so why don’t you watch the video here.

 

Discuss this:

Your email address will not be published. Required fields are marked *