I’ve discussed with a number of CPOs during the last months on how they have managed procurement during Covid-19. One recurring answer is along the lines of "we broke all of our processes and went to wild-west-mode.” Now, many say this with an interesting combination of sadness and pride. Sadness that they had to give away the great processes perceived to be the basis for any professional procurement organization. Pride and excitement of how procurement teams were able to improvise, work hard, and survive.
There shouldn’t be sadness for the breakdown of processes. This period has shown that processes are slow, boring and self-centered - and that we can live and thrive with much less of them. Many processes are manifestations of control-freak, risk-averse mediocre management but I admit there are cases where they can be beneficial.
Occasionally processes are great - when they allow for (almost) complete automation. For example, it's great when routine tasks are mapped out as a process and automated to save people's time and attention. Even in this case I see process more as a tool to enable (software based) automation rather than as the end-game.
Sometimes, processes can be helpful guidelines for a less experienced employee, and/or to facilitate coordination in teams. If you’re doing a supplier risk evaluation for the first time (and if it needs to be manually done), it may be good to have a process description to guide through the first steps. In these cases, processes should be seen as a learning method. Having consistent vocabulary and descriptions of a process helps communication and coordination across individuals.
Those are the exceptions. In most cases processes bring many hidden costs to our businesses.
Why procurement needs less processes
Processes are, almost by definition, designed to cover all sets of actions taken. This tends to lead to complex multi-step processes that often include a number of bottlenecks in the form of approvals and reviews. Whenever something bad happens in a company, management often asks “how we can prevent this from happening again.” The answer commonly is “let’s create a process.” Over time, there are more and more complex processes in place, gradually suffocating the organization and its creativity.
All this put together brings on a number of problems with processes:
- Things get slow – there are so many steps to cover and so many approvals that getting even a simple task done takes a lot of calendar time. I believe this is the reason that lot of processes were broken during Covid-19 - they were just way too slow to create a meaningful result.
- Things get boring both for managers and the people driving the processes forward. CPOs often talk of a talent shortage in procurement.(1) How to fix this? Definitely not by trying to reduce our exciting work to a process-led obstacle course. Nobody ever said “I just completed a 15-step sourcing process and that was the greatest moment of my life.” People don’t get excited about running processes but, unfortunately, they may get overly excited designing them. People get motivated about purpose, outcome, creativity and freedom, but not about executing processes. If we provide processes as tight guidelines on how to do things, we don’t get talent. Once we get real talent, we definitely can’t keep them with strict processes. It’s equally bad for managers - their job becomes one of reviewing and approving. Approving POs, business cases, vacation requests, what not. The brightest people who have worked hard, learned a lot, and would have lot to give become rubber stampers.
- Processes are also very self-centered. They assume that we can dictate the timeline – it may make our own lives more plannable, but it also takes out any options to leverage the opportunities that are coming up. Say, for example, you follow a strict quarterly business review cycle with suppliers. If supplier collaboration happens only through process-driven reviews, you are not leveraging opportunities coming up in between.
The world is getting faster and more volatile. In this new world, as the Covid-19 era has proven, processes are just too slow. I truly hope that Covid-19 did not only teach us that remote work is possible, but also that a more action-oriented, exciting procurement world is possible … But more on that on my next blog article.
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