Spend Matters Papers: If it ain’t broke – fix it!

So here’s a plan - through August we’re going to highlight all the research papers, briefings and so on that we’ve produced in the last two and a half years. We’ll  include what we said when we first launched it, and of course the link so you can download – free on registration. Why not use the quiet time in August to brush up on some procurement thinking? And they haven’t dated, in our opinion.

Today we have a somewhat unusual title for a paper but it really illustrates a principle that is important - that we should never be complacent, even when things are going well, and should always look to improve.  If it ain’t broke – fix it!

Here’s what we said when we launched it back in November 2011.

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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 (2)

  1. Market Dojo:

    We have seem this type of growth in many successful software companies. It is usually described as ‘S’ curves stacked on top of one another. Each time you near the top of one, you should be looking at the next paradigm shift in the market for the next evolution and start the next ‘S’ curve. This is why we did what we did, when we did.

    The question is, when should you invest in this next shift? If too early you take valuable resources away from a growing market but if too late may start to decline. It would be interesting to see if the metrics which judge the trigger of the next evolution could be quantitatively assessed and how would you apply this to procurement departments? Would it simply be when you are comfortable with the current processes or is that too late? Could you look at value and efficiencies of the procurement department to define a trigger or is it just intuitive?

    1. Peter Smith:

      Alun
      Great questions – I like the idea of applying this thinking to the procurement function. A future article there I think! I don’t know if there are metrics or triggers but one thing for sure is the need to avoid complacency or arrogance. You just know that organisations, functions or people that get over-confident in their own abilities are heading for a fall!
      Peter

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