Thursday, 7 March 2013

Stifling Supplier Innovation (Part One)

Authored by Sara Omer

A colleague recently directed me to a great blog post from Rosabeth Moss Kanter at the
Havard Business Review, titled ‘Nine Rules to Stifling Innovation’. It’s a great list of how a company should NOT interact with their suppliers. I’ve picked a few of the ‘stiflers’ here that rang a chord....

1. Be suspicious of ideas that come from your suppliers - your strategy, innovation and R&D teams know your business better than anyone externally.

2. In the name of excellence, encourage cut-throat competition. If a new idea comes in from a supplier, immediately put it out to the rest of your suppliers to see if they can provide it cheaper. Even better run a RFX and auction.

3. Ensure quarterly reviews don’t happen. Make sure the procurement team are so busy that they don’t have the time to hold their quarterly meetings with top suppliers. Having a face to face meeting with suppliers on a regular basis may provide a sign that you care about the relationship.

4. Act as though punishing failure motivates success. If a suppliers idea does somehow slip through the net, ensure the employee who championed it is aware that failure will be a direct reflection on their capability. A few public hangings will soon stop future cases arising.

5. Above all, never forget you’re the customer and you already know everything there is to know about your business.

There’s more from Kanter Moss, you can read the
full list here.

Of course, it can be difficult sometimes to really see how you can truly work with your suppliers on innovative ideas and capturing and measuring the ROI on this innovation is even more problematic. For those of you who haven’t read Peter Smith’s report on
Market-Informed Sourcing, it’s worth taking a look.

In part 2 we’ll take a look at Kanter Moss’ ‘Innovation Promoters’.


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