Procurement Intelligence Unit

Fix the Process Not the Problem - this was the title of an article by Sirkin & Stalk in Harvard Business Review (July-August 1990), a seminal piece of work that highlighted the difference between treating symptoms and addressing the root causes in order to bring about sustainable levels of continuous and step-change improvement.

When I read it I was so excited that I started jumping up and down, furiously clapping my hands together. I then realised I was still in the library.

What was important about this article was that it described how to break the cycle of problem solving so that you could raise your game (and performance) to that demonstrated time and again by process improvements. Breaking the cycle is analogous to watching your house burn down because the fire engine isn't big enough. The last thing you want is someone coming along and suggesting there needs to be a team meeting to redesign the engine.

Despite the above analogy, people do like problem solving. When they see a problem the hero within emerges, they draw their swords and march forward to slay the dragon. The issue is that 'problems' are often symptoms of much deeper root causes. Therefore, what tends to happen is that 'problem solving' actually becomes 'problem shifting' as the root cause never gets tackled and simply pops up elsewhere. Focusing on the processes that cause the problem enables us to track and deal with the deeper root causes.

Sirkin & Stalk proposed a four-stage roadmap that progressively moved the organisation to its desired state. The stages they identified were: (1) Fix as fail; (2) Prevention; (3) Find root causes; (4) Anticipation.

The Procurement GPS model takes a similar approach, staging the development of the function so that improvement becomes much more achievable, delivering benefits to the organisation as it is implemented. The first stage is to build core procurement competences and ensure that prices are robustly managed. Secondly, cooperative ways of working need to be embedded across the organisation so that costs can be managed down to their minimum. Thirdly, Total Cost of Ownership requires the engagement of partner suppliers who are able to advise and support the optimisation of supplies across their lifetime. Finally, all of the above parts need to be pulled together into a coherent network that integrates customers and suppliers into an extended network that has the ability to maximise the amount of value added as products, services and resources flow through it.

When we look at those who have championed procurement over the last decade, they tend to be the ones that have a long-term plan and are able to stay the course. Living your work life on a day-by-day basis wondering if the next problem is going to be the one that is bigger than you is a debilitating experience. Having a strategy, like GPS, puts you firmly in the driving seat and helps you to weather the knocks and setbacks that we all experience - the reason being that a long-term strategy that delivers benefit along the way will always be bigger than the next daily problem.