It’s still too early to tell exactly what will happen over the next months and years as the UK progresses towards some sort of outcome linked to Brexit, as Europe continues slow growth and as the approaches of the new President-Elect in the USA develop.
Despite that, the general indicators are pointing to another slowdown and potentially reversal in growth, much as we saw in 2000-2008. This, in a world predicated on growth being the only positive direction, can be seen as a challenge / disaster / reversal of fortunes. However, for Procurement and Purchasing folk, we should see this as an opportunity to build and develop our standing in our businesses.
We are well equipped to do this through the twin lenses of Category Management and SRM. Excellent use of category management will have developed our capabilities in one very particular area: that of projecting a wide range of options from the market information we develop, and presenting those options back to the business with a firm view of why we need to adopt one direction or another. SRM, in its strategic version, allows us to do a similar thing by identifying the organisations most able to help us strategically, and how we need to progress with them.
This means that our abilities to develop broad options become critical - and not just price focussed, but leaning on the full range of value that should be available to us when operating at these levels. This is no simple task. We are often having to integrate a series of inputs to create a possible future direction for our category or our supplier relationship, in a way that provides a better outcome than alternatives, and can also be sold to a range of stakeholders who have not thought as deeply about this.
To do this, we need to understand a range of ways of developing the broader strategies which we can follow. The good news is that there is no shortage of tools to look at and consider when thinking about this. This, of course, is also the bad news, in that for every approach there is an alternative. Examples of ways of thinking include (in no order of preference): Porters Generic Strategies: Blue Ocean strategy; Bowman’s strategy clock; using game theory; scenario planning. And there’s plenty more.
There’s a danger of getting fixated with one over another; each has a role to play under many circumstances, and indeed, many approaches originated in the world of marketing. To use them in a procurement environment will take a degree of reverse engineering. Although we have an approach which we educate people in, we’re always open to a wide range of alternatives in this area, to make sure that the broadest opportunities are considered. If we discard them, it’s fine. However, we do need to make sure that they reach daylight so they can be examined and then discarded if necessary.
We also need to practice this as an approach. It won’t just come to us fully formed at the moment when we need it in the midst of a serious category activity. Rather, it is better to be able to use approaches as a mechanism to explore more mundane tasks. As an example, take Christmas shopping. This can become a challenging activity in which frantic shopping for unwanted gifts at unrealistic prices overwhelms the poorly prepared. Imagine instead an approach to Christmas shopping which is different. How could you differentiate that approach? How could you change the experience? What could you do that is different? What are the various scenarios which could be dreamed of to make it far more interesting? Just playing with that, and drawing up several alternative scenarios is a great way of practicing developing alternatives (as well as being potentially lifesaving!!!).
So, getting good at alternatives will help us massively in our new futures, starting early next year. Start by practicing; and you might get to enjoy Christmas shopping as well!
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