Is Middle Market Procurement Really Any Different? (Part 1) — Summary

I had the chance last week to connect with a fascinating gentleman that I hope to collaborate with in some capacity. This gentleman is pursuing a new type of organization to enable middle market companies to identify, learn and execute on best practices across the functional spectrum -- from sales to HR to procurement. His vision, which appears close to execution reality sometime this quarter, is a true knowledge sharing, network and enablement concept that is as different from models like Vistage and YPO as it is from conference, advisory and publishing companies (e.g., Gartner). Regardless, he asked me the question: is middle market procurement really that different from the challenges that large companies face?

If we first put a definition on "middle market," bracketing this description as companies somewhere between $100MM and $3B in revenue based on a whole variety of factors -- ownership, management, growth, talent, markets, etc. -- I do believe a common set of unique challenges for these types of organization arise which are worth confronting separately (or in addition to) those of larger organizations. These challenges often include the following:

  • Lack of established processes (e.g., strategic sourcing, lean, Six Sigma, etc.)
  • Among professionals, both a fear of "rocking the boat" and an overt focus on career stability over personal/professional growth
  • A lesser emphasis on skills development
  • Technology infrastructure differences
  • Technology adaptability and agility
  • Domestic (and often regional) blinders
  • Fewer utility players
  • Avoidance of commodity management and a misperception of supplier management
  • Unfamiliarity with data-driven approaches
  • Potential for owner/CEO/executive micro-management
  • A comfort -- almost a justification for one's job -- based on fire fighting vs. fire prevention
  • Inbound mentality (vs. proactive involvement) more common than not

Stay tuned as we investigate these areas in more detail in a series of periodic posts in the coming months.

- Jason Busch

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