Today’s guest post is from Tony Bridger, an experienced provider of Procurement Consulting and Spend Analysis services across the Commonwealth (as well as a Lean Six Sigma Black Belt) who has been delivering value across continents for two decades. He is currently President of UK-based TrainingWorx Ltd, a provider of a wide range of Procurement and Analytic business training programs (inc. GDPR, spend analysis, project management, process improvement, etc.) and focussed short-term consulting solutions. Tony can be contacted at email@example.com.
The web is a fascinating place, your capacity to search, ponder and read is unlimited in reality. However, whilst rummaging around I happened to read an article in Forbes from 2015 entitled Why Business Transformation Fails and How to Ensure It Doesn’t.
There is little or no doubt that the “T” word has appeared in all functional areas of business life – Finance, Operations, Procurement, Human Resources and just about any type of business. Forbes suggests most transformations that fail are due to inefficient execution (41%), followed by resource and budget constraints (35%). It is likely that failure levels are much higher – but how do you define failure? Forbes also suggest that many failures are due to a “lack of buy-in”. Sadly, that phrase is largely overused — and meaningless if you think about it for a moment or two.
Many employees go to work for income — they may not see buying-in to changes as a high priority. The article also suggests that everyone needs to be “on the same page”. Again, there is a difference in understanding and interpretation by individuals of the reason why a change is occurring and what it means for them. As with many things — there is large scale charity, change and transformation fatigue – people just see inefficient execution as the same internal muddle repeated on a regular basis. Meanwhile, every day of the week the transformation word continues to bounce back. It is clearly a fad with some time to run.
Having been part of, and subject to, a considerable number of transformations over a number of years, the best performing companies (large and small) take changes in their markets and competitive environment as business as usual drivers. Change or die. There is no such thing as transformation. It’s simply good business management. No fanfare, just outcomes, jobs and profits.
In the procurement space in particular, social media articles exhort many large organisations who have managed to deliver “empowered staff within a learning organisation” and yet very little on “the net hard savings from this transformation were … $X”. In an analysis of some (as yet un-published) recent survey data, around 43% of Chief Procurement Officers in large companies had no analytics capability. However, many had advanced contract management, e-procurement and other sourcing capability. But no analytics numbers. One can assume the usual array of uncoordinated spreadsheets.
Whilst it is easy to accept the premise that executives inherit environments, the procurement focus should be on numbers and savings or realized value (if Procurement helped with an initiative that increased sales, that should be captured too). If you don’t have the numbers, get them. The issue may simply be that inefficient transformation execution means that little or no rigour is attached to the expected outcomes. It starts with a pre-change number and ends with a post-change number. What gets measured gets attended to. What people need to read are change strategies that they can emulate to drive down costs.
As will emerge shortly, the collapse of Carillion is likely to have been driven by managers who were transforming visionaries. They just needed to manage the business through market and competitive change. In effect, just get on with it.