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- August 21, 2017
- Phil Ideson
At Coupa Inspire in May, I had the opportunity to see Apple co-founder Steve Wozniak on stage in conversation with Coupa CEO Rob Bernshteyn, and to interview Woz afterwards for the Art of Procurement podcast. Now that I’ve had some time to reflect, a few points from our conversation on innovation, change and branding stand out to me as particularly critical for procurement to consider at this point in our evolution.
Perhaps the most memorable line from Woz’s mainstage chat was, “Always design something new that does not come from anyone else’s design.”
The fact of the matter is, you can’t create something new using a legacy approach. The drive to innovate will require us to experiment with unproven approaches to spend management and supplier collaboration, which means procurement needs to alter our mindset towards risk, and be prepared for some failures.
Once we do that, how do we go about innovating? According to Wozniak, innovators are born rather than made. They don’t just blaze new trails because their company asks them to. “The innovators are the types of people that grew up their whole life as ‘makers,’” he said. “They would take little ideas and turn them into stuff that wasn't worth money maybe, but little robots or software projects.”
If that is true, and the innovators are born rather than taught, then we need to be on the lookout for them all the time, and at all levels of the organization. Every good idea, no matter the source, needs to be given an honest opportunity to succeed: alternate specs, brand new suppliers, and collaborative business relationships.
If we follow Woz’ advice, simply improving existing processes is not enough. Instead, procurement should hold fast to the principles we have always believed in - resource efficiency, transparency, and supply base capability – and experiment with new ways to apply them.
For example, by leveraging the altered economics of the circular economy; paying for access to a resource (or outcome) rather than buying an asset, or hiring an expert outright as with SaaS and PaaS, or exploring the capabilities of robotic process automation instead of automatically outsourcing, procurement may be able to create expanded value in the long run – even if it requires a larger upfront investment or doesn’t lend itself to ‘apples to apples’ savings calculations.
When we combine the ideas that innovation happens naturally, that it may be accompanied by increased risk, and that it does not necessarily build on existing frameworks, it is hard to deny that while innovation is something that every company wants and needs to do, it’s not something that can be mandated. It must be something an individual also wants and needs to do. Our job is to locate those individuals, encourage and empower them, and provide an environment in which they can succeed.
Does innovation necessarily mean replacing ourselves with machines? That is the unspoken fear in many industries today, not just ours.
First, the good news: according to Woz, robots and artificial intelligence will not render procurement obsolete anytime soon. Smart machines will be able to run processes and analytics very quickly. But only people having the understanding necessary to contextualize what we should do with the output from technology. “We've never talked about it [smart machines] making up its own goals. That couldn't happen for decades at least,” he said.
So, we’re good for a while, but the fact remains that technology will naturally eliminate the need for some tasks, while providing new opportunities in other areas.
I asked Woz how we are supposed to deal with these impending changes, and his response surprised me.
“To me, that's more of a psychological question than an economic one,” he said. Resisting change “is only going to keep you held back from the good things you could do in the world and it's going to give you fears, and that's not worth it,” he said.
We can’t be open to changes in process, technology, and business models if we are worried about its impact on our career plans. The leap of faith this requires procurement to take is not easy, but nothing worthwhile ever is. If we continue to generate meaningful results and take the best opportunities that arise, there is no guarantee that we will spend our entire career within procurement, but we will be productive, in demand, and free from fear.
Building enduring brand value
Against the backdrop of innovation and change, we need to continue to think about procurement’s “brand” within the organization, and what better example to draw from than Apple, one of the world’s most iconic brands.
Procurement historically has not had a strong brand. We constantly deal with the challenges (and consequences) of needing to effectively communicate that procurement is doing things differently. Our stakeholders probably feel that they have heard this message before – and we haven’t always delivered as much as we intended to.
A key part of Apple’s brand platform is doing things differently, so it’s comforting to know that before the brand became iconic, they also had their branding struggles.
Even though Steve Jobs had a failure with Macintosh business-wise, users loved it, and in the end it didn’t hurt the brand. “We were doing something so different than had ever been done before and were going to change the world,” Woz said. “It was a huge company started by two young kids just trying to do good things for people.” People tolerated failure as a part of that, and ultimately the Macintosh failure, and Jobs’ subsequent banishment and return, all became part of the Apple brand story.
What can procurement learn from that? When you communicate clearly that you are pushing boundaries, people are conditioned to expect a learning process. But even in “failure,” procurement needs to invest heavily in the user experience. All touchpoints and interactions with procurement including supplier onboarding, P2P, or just trying to order a mouse pad, must be positive.
In fact, we must remember to deliver a positive user experience even with high volume, low dollar purchases, as that is where most people’s interaction with procurement takes place. While these purchases do not make significant progress towards procurement’s performance metrics, they are critical to our internal stakeholders’ satisfaction – and our brand.
For procurement to build a meaningful brand, we need to seek out and nourish all sources of innovation, and communicate clearly to the business about what we are doing. We need to boldly face change, even if it may threaten us personally. Throughout it all, we must carefully guard the user experience, remember to prioritize the things that are important to our internal stakeholders, and put more emphasis on quality than speed. With hard work and a solid communications effort, procurement can build a strong positive brand image as an organization that thinks differently.
If you would like to hear my full conversation with Steve Wozniak, click here to visit the Art of Procurement podcast.
Philip Ideson is the co-founder and Managing Director of Palambridge, a company changing the way in which procurement leaders access the supply market insights and know-how they need to expand their value proposition. Philip also created and hosts and popular weekly procurement podcast, Art of Procurement. Prior to Art of Procurement and Palambridge, Philip enjoyed a career that spanned the procurement value chain, working across three continents for organizations such as Accenture, Ally Financial, Pfizer and Ford Motor Company.