“Procurement of innovation” – are women the answer?

We started this series yesterday by outlining the difference between innovative procurement and procuring innovation. We’re going to focus on the latter today – how to procure in a manner that allows your organisation to capture the innovation of the markets in which you buy goods and services.

Let’s start by looking at one potential enabler for this innovation.  Shirley Cooper was one of the Chartered Institute’s of Purchasing and Supply’s highest profile Presidents of recent years, and worked as Procurement Director of Computacenter, the leading IT supplier to major corporates.

She’s recently moved on, and her first role, as part of what I suspect will be a portfolio career, is with WE Connect, an international non-profit organisation which “facilitates sustainable economic growth by increasing opportunities for women-owned businesses to succeed in global value chains”.

I met Cooper recently, and we discussed the issue of women-owned businesses and whether procurement people should be doing more to encourage them as part of their supply base. WE Connect and Cooper are emphasising strongly the innovation aspect of this – as she told Supply Management magazine:

“Companies mustn’t sacrifice innovation and creativity in their supply chain by excluding the value women-owned businesses can bring. I’m aware of how hard it is for companies to start engaging with women-owned businesses. When you talk to chief executives in Europe and ask them how many women-owned businesses are in their supply chain many haven’t got a clue.”

 So will including more women-owned businesses in your supply chain drive more innovation? And does it really matter whether your suppliers are male or female owned – or indeed owned by thousands of unidentified shareholders which, let’s face it, is the case for most large suppliers.

And is there any evidence that woman owned businesses are more innovative than others?  It’s a sample of one, but I’m undoubtedly more innovative / creative than my female business partner (wife) although she beats me on many other criteria! And it may be that CEOs don’t know how many women-owned businesses they have in their supply chain because they don’t care, as long as they’re good – I can’t see I’ve ever seen an iota of discrimination against women owned businesses in terms of awarding contracts. But it may be I’ve just been lucky...

So I think WE Connect have to present their case carefully if it is to have credibility. But where we do agree is that organisations risk losing the opportunity for innovation if they don’t pay some attention to the composition of their supply chain. If you drive down supplier numbers (see our comments on the Lloyds TSB initiative for an example) and end up with a group of pretty homogenous large corporates in many spend categories, you are less likely to get innovation than if you promote a diverse range of providers. And that may well include women and minority-owned businesses, third-sector organisations, firms from different countries, smaller organisations, and so on.

Now I wouldn’t recommend you start introducing quotas for female, minority owned or SMEs (small firms) specifically; but it seems likely that a diverse supply chain, with a range of businesses represented, will be more likely to provide innovation.

And of course many organisations have little idea who their suppliers are anyway! Whether it is through a backward-looking spend analytics approach, or recording up-front supplier information through the enablement and registration process, we’d strongly support the idea that understanding the makeup of your supply base is a vital element to drive procurement performance in all sorts of ways.

Good luck to Shirley Cooper anyway. Whatever the outcomes for woman-owned businesses, if she gets us thinking about how we are most likely to get innovation from our suppliers, she will have done us all a service.

Voices (4)

  1. Steve:

    Sexist rubbish. If you said “Asian people are the answer”, would that be OK?
    Yes I am a man 🙂

  2. Final Furlong:

    Interesting subject for a debate Peter.

    Not sure about Shirley’s comment – that many CEOs don’t know how many women owned businesses sit within their supply chains – why would/should they care? Product is king – not that it must be made by a queen.

  3. Toni:

    Interesting post. they might well be.
    Anyway they are being encouraged – strangely enough with a retroactive effect – by the European Union who just launched the Women Innovator prize… more info here: http://ec.europa.eu/research/innovation-union/index_en.cfm?section=women-innovators
    Some strange rules for it but not bad money. Ladies and ladies good luck!

  4. Christine Morton:

    Can we make a distinction between women-owned and women-run businesses? The two are not the same necessarily.

    I happen to know of a family stateside who lists the wife as the “business owner” on US government service contracts when in reality she just answers the phones and types invoices. The running of the business – all strategy, all work scheduling – is done by her husband.

    But hey, they get government contracts on a preferential basis…

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