More from our readers on procurement of innovation

Our series on procuring innovation drew very interesting comments from readers, so here are some  which we thought moved the debate forward. (We’re not focusing here on the ‘women owned business’ discussion – read that post and the comments it drew here).

We’ll start with a strong theme; whether innovation naturally declines as you get further into a supplier relationship. Personally, I suspect there is a case of “entropy” here – which means you have to keep injecting energy into the relationship to keep up the innovation. Here’s Andrew anyway to kick things off:

I have noticed an interesting apparent trend where the longer you have been working with a supplier then the less “innovation” you tend to get back... Everyone is aware of the “lazy incumbent” syndrome but I think it might go deeper than this. Some of this tends to be where the customer (procuring organisation) ‘beats’ the innovation out by encouraging the supplier to concentrate on delivering the terms of the contract, forgetting any additional ideas that they might have (I think this is particularly the case with larger /public sector organisations). Also some of this apparent phenomenon may be due to the reduced Account Management capability that you tend to experience over time. But why is it that the best innovation tends to come from a new entrant supplier – it shouldn’t be the case?

"Bitter and twisted" responded to this.

To displace a “good” incumbent, a supplier has to be innovative.  If they were able to do the same thing in the same way cheaper and/or better, they would have won the work in the first place. I suspect the benefits of competition have been lost a bit in the vendor-reduction-partnership-supplier dogma of the day.

And there was agreement that much of this is about mindset rather than ‘technical methodologies.

I agree that the barriers to innovation are often institutional…indeed I know folks who would rather spend time trying to agree a definition of ‘innovation’ that actually discuss new ideas! We regularly include provisions in contracts for innovation but to make them work you have to have a very open, receptive mindset. Never dismiss ideas outright but ‘thank’ and ‘bank’. Prioritise the suggestions and try to ensure that some are implemented as encouragement to get more.  Where significant innovations are accepted, use gainshare provisions to reward the contractor and incentivise the more suggestions. (Tim L)

And those internal barriers are often a major source of annoyance to the suppliers themselves.

I remember many years ago providing feedback (within a fortnight) to our legal and banking incumbents who’d both just lost out on re-appointment following tender exercises. As instructed, part of my feedback was that neither was viewed as being proactive (innovative) hence their losing the contract (there were other issues). In both meetings, exception was taken to this element of the feedback. I was told … that each incumbent had been trying to get the organisation to look at new ways of working – but they weren’t being listened to. So, while as a client, we may not have beaten innovation out of them, it was obvious (and on reflection, knowing the characters on ‘our side’ I’m not surprised) that the service providers simply weren’t being listened to. (Flog)

Finally, I liked the analogy with other sorts of relationship, and the note of pragmatic cynicism from PlanBee!

All long term relationships, whether between a husband and wife or buyer and supplier, need to be nurtured and worked at, otherwise they go stale. When we have lost contracts after long term relationships because of a lack of innovation, too often the buying company’s definition of innovation is reduced price. Nothing wrong with that as an objective but let’s not dress it up as innovation.  And for a selling company, innovation too often actually means we want to sell you something extra and increase our revenue flows from you.

Anyway, we’re not dropping innovation as a topic, as it’s obviously a pretty hot one, but thanks again to everyone who has added to the debate do far.

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