Procurement Aerobics for the Agile Organisation:

Dave HenshallCategory Management, Innovation, ProcessLeave a Comment

Group of people doing exercise with dumbbells.The pace at which a company, is able to adapt and evolve is dependent upon the number of new strategic options that it is able to generate and test.

The agile organisation is therefore one that captures more than its fair share of new opportunities, successfully balances risk with reward and is in a state of constant renewal by redefining its “core business” in ways that open up new avenues for growth.

This definition supports procurement well in its drive to embed Supply Management as a core competency (SMCC) within the organisation.

In agile terms CPO’s can distinguish between rigidity and agility within their own organisation:

CPP: Rigid vs Agile

CPP: Rigid vs Agile

In today’s ‘new normal’ environment it is critical that CPO’s take action to ensure their teams are fit for an agile future. 

Our first suggestion starts with talent. How many of us have actually had a formal presentation explaining the company’s business strategy, followed by one to one coaching on how our role supports it? If staff don’t understand the business, how can they recognise real value in supply markets?

CPO’s must make their organisations a magnet for supply market ideas. This can be an easy win. By encouraging innovation from supply markets CPO’s help their companies generate a range of new strategic options for their organisation, facilitating its constant renewal.  So with this theme in mind, here are our recommendations for procurements Aerobic Workout:

  1. Challenge your believes to see if they still stand up today
  2. Shift the focus for senior managers from the operational to the strategic
  3. Do your staff understand the business strategy and have a clear view how they support it?
  4. Are decision rights clear and reflected in the organisation chart? It is still amazing how the real work gets done by someone other than the obvious job holder.
  5. Does your organisation speak to supply markets with one voice?
  6. Review the resilience of your supply chain and address weaknesses
  7. Start building a more entrepreneurial culture in which innovation can flourish – with supported risk-taking
  8. Develop and enhance your knowledge management framework capability – how quickly does important information get to the right people?
  9. Enhance customer focus by instigating development teams with customers
  10. Enhance collaboration with suppliers by implementing teams to facilitate innovation – establish brainstorming sessions to generate ideas
  11. Review systems and processes to ensure they are enabling agility
  12. Establish clear business rules with customers and suppliers

Agile organisations report superior growth and margins over time and sustain lower levels of disruption. Ultimately, these organisations succeed through superior execution, for CPO’s this means building the right programme of high leverage actions, including decision rights and information flows, securing entrepreneurial talent to process the information, organising resources to maximise value, and developing the tools and skill sets to support execution excellence.

Nuff said …

Please let us know if you have any other suggestions or comments.