Success Cues May Be in the Rearview Mirror for Procurement

Spend Matters would like to welcome a guest post from Jim Heininger, Founder of Dixon|James Communications

"We've tried it already and it failed." It's regrettably a line too many procurement leaders hear as they strategize new cost efficiency initiatives.

Implementing a new spend management program or procurement technology integration is challenging enough, but an unfortunately large number of new initiatives face scars left by previously failed attempts at similar programs. (One company we advised on change management and communications had eight different fruitless attempts on record!). Our assessment has shown that in most cases these previous failures were the result of people related issues -- lack of leadership support, ineffective governance, little stakeholder involvement, poor adoption, etc. One client said it simply: "Changing technology is easy, the hard part is changing people."

The "readiness" of the organization to successfully implement a new spend program is severely challenged by these historical landmines. Commit to the mindset that there is no room for error this time around. The same mistakes can not be repeated, so it's time to get the skeletons out of the closet.

To plan around these success inhibitors, start by looking in your rearview mirror!

Know the cultural and structural obstacles to success. Change management efforts for new procurement programs should always include an audit of cultural and structural obstacles to its success. A cultural assessment looks at such issues as historical relationship drivers with suppliers, corporate values that influence supplier working relationships and company management's relationships with suppliers that impacts objective sourcing strategies. Structural assessments look at how a decentralized structure impacts purchasing responsibility and accountability, identifies where purchasing power truly rests within an organization, and the history behind different department philosophies or practices within the same organization. These unique corporate dynamics will only be magnified by previous failed attempts, so gain full understanding of how they can addressed and reduced.

Search the memory banks. Gathering historical insight to effectively plan around these learnings is complicated by the fact that unproductive initiatives in the corporate environment are usually not documented as well as successful ones. Most often we have to rely on individual personal memories of the outcomes to piece together an accurate picture of what didn't work and why. Talk to employees, a good cross section of those involved, but dig deep and ask the tough questions about why the programs didn't work and how those factors could be overcome today.

Long-time employees have learned to avoid initiatives. It's the negative memories of tenured employees that most often subconsciously (and in some cases deliberately!) predetermine any new effort will fail. Long-term employees learn that if they "duck and cover," each new initiative will pass overhead and not require their energy or commitment to change. Focus on understanding what experience has taught these influential informal leaders and engage them in the process of designing a new implementation approach that will work.

Look beyond just spend management program breakdowns. Capturing important historical lessons goes beyond just spend management programs to evaluating success factors for all major corporate strategic initiatives. Look at HR programs, manufacturing changes, IT deployments, service improvement programs, etc. -- they all have stories and lessons to share. Interview project leaders for both successful and aborted companywide initiatives to identify trends that can be reflected in your implementation plans. One company had a consistent issue with management overestimating its ability to influence support behind any company initiatives which results in extended project timelines and more heavy lifting for the project team than expected.

Throw extra fuel on your burning platform. Situations like these call for leadership to communicate a clear mandate that this time, this initiative must succeed. A clearly articulated value proposition that addresses the repercussions of the initiative not being successful must be at the forefront of all communications. Align leadership behind the idea that "non participation" is "not acceptable" and leverage that message throughout the organization.

What other ways have you found to collect knowledge that has been swept under the rug?

-- Jim Heininger, Founder of Dixon|James Communications

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