- 05
- MAR
- 2010
Procurement strategy tools for a shifting landscape
Author: Mark Perera - Categories: Procurement Strategy
Since setting up the PIU I have started to get slightly obsessed by procurement strategies. In particular, I want to know how they are formed, how well aligned they are with the business, and also whether they can be adjusted with quick-moving internal and external pressures.
So when I picked up the January-February 2010 edition of the Harvard Business Review magazine, I was intrigued to read Michael Jacobides' article, 'Strategy Tools for Shifting Landscapes'. Michael's view is that in an age when nothing is constant, strategy should be defined by narrative - plots, sub-plots and characters - rather than by maps, graphs and numbers.
Drawing on his consulting engagements and research, Jacobines believes business executives should develop strategy by writing a play script incorporating the motives, decisions and actions of the company as well as the other organisations linked to it - including competitors and suppliers.
The article provides great guidance on how to create, reinvent and future-proof your play scripts so they will stand the test of time - as well as providing guidance on the characteristics of a good play script:
Imaginative – Play scripts should explore all the opportunities that exist, whether within or beyond your sector;
Outward facing – They should focus on links a company has with other entities, the way it connects them and how others perceive it in the market;
Robust – They should not depend on too many assumptions about other actors' behaviours, but instead focus on the actions that lead to creation and capture of value;
Plausible – Companies should consider why they, rather than some other player, would be able to make play scripts succeed.
Considering the number of influencers on a procurement function, I would be really interested to hear if any procurement leaders have or would be willing to try to build their procurement strategy based on play scripts. I would also be interested to get your views on this approach as opposed to more traditional frameworks.
Personally I'm going to give it a go with PIU strategy, as a compliment to the balanced scorecard approach we are developing. I'll keep you posted on how it goes and look forward to getting your take on this new approach.
