In his recent post titled Who Are Procurement’s New Leaders, Jon Hansen referenced a reader comment that “business strategy and traditional procurement strategy are often misaligned.” As a result, “necessary leadership talent must synthesize the best . . . and discard the obsolete to create something new.”
In my experience the “new” to which the reader referred must be centered more on mindset or rather organizational culture, and the related change in approach it can bring about in terms of strategic relationships.
Let’s look at the purported transition to a strategic procurement practice.
Being strategic has taken on an added new dimension of importance. However, most people who have made or are making the transition to “strategic procurement,” have done so within the framework of the very same adversarial models that have undermined supplier relationships in the past. So, just because there is a new awareness of importance, does not mean that one becomes strategic from a practical execution standpoint.
The same can be said when it comes to relationships, or being relational.
To become truly relational, an organization has to do more than talk about it. It has to extend itself beyond the T&C’s of a contractual enforcement model. When one is relational, the usually inward focused strategic thinking, is actually extended to include the vendor or vendor community through a continuous system of relational governance. Unfortunately, this type of engagement has been limited to a select few.
If we are to see real traction in terms of the transformation of the overall procurement practice to one that is based on being truly strategic, the catalyst for change has to go beyond a response to exceptional circumstances or rare “one of” scenarios. In other words, the procurement practice has to become relational.
The Minnesota Bridge Project
While the approach to rebuilding the collapsed bridge in Minnesota a few years ago is a great example of relational thinking, it was induced under circumstantial pressure, and therefore hasn’t become a scalable model or standard by which all complex acquisition are guided in the state. Despite its success, the apparent lack of scalability in terms of the approach or model that was used in this instance is noteworthy, because it is not viewed as being an adoptable standard across the board. Therefore it is what I refer to as being a model by exception.
The real question is why?
Once again, and in principle, the Minnesota bridge project incorporated a number of important elements that focused on a collaborative approach to meeting a challenging objective. Unfortunately, it was viewed as a process that fell outside of the accepted norms that has traditionally governed complex procurement acquisitions. This meant that the circumstances dictated its use as opposed to representing a real transformation from the standpoint of the state’s overall procurement practice. Or to put it another way, the model used to successfully drive the Minnesota bridge project was transactional as opposed to being relational. It simply incorporated relational elements into what was ultimately viewed as a special transaction.
As a result change – real change, has not occurred. This means that the state has not become strategic or relational in its procurement practice, and therefore has not been transformed.
For a real transformation to take place, leadership must first recognize that a change is needed. Then, leaders must assume the lead role in making the transition from a transactional model to one that is relational.
For this to occur, the ability to standardize the relational approach beyond a transactional event requires a clearly defined road-map.
The road-map to which I am referring, will provide the leadership team with a clear outline as to how they can move complex acquisitions from the intended objective stage through to a successful outcome.
In my next post, I will go into greater detail as to how this standardized road-map can be created and implemented on a large scale, industry-wide basis.