By Sammeli Sammalkorpi
During the past few months, I have discussed with a number of chief procurement officers (CPOs) how they have managed procurement during COVID-19. One recurring answer was along the lines of ‘we broke all of our processes and went into wild-west-mode’. Now, many said this with an interesting combination of sadness and pride. Sadness that they had to give away great processes perceived to be the basis of any professional procurement organisation. Pride and excitement at how procurement teams were able to improvise, work hard and survive.
There should not be sadness for the breakdown of processes. This period has shown that processes are slow, boring and self-centred – and that we can live and thrive with much less of them. Many processes are manifestations of control-freak, risk-averse and mediocre management but there are cases where such can be beneficial.
Occasionally processes are great – when they allow for (almost) complete automation. For example, it is great when routine tasks are mapped out as a process and automated to save people time and attention. Even in this case I see processes as more of a tool to enable (software based) automation rather than as an end-game.
Sometimes, processes can be helpful guidelines for less experienced employees and/or to facilitate coordination in teams. If you are doing a supplier risk evaluation for the first time (and if it needs to be done manually), it may be good to have a process description to guide you 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.
But those are the exceptions. In most cases, processes bring many hidden costs to businesses.
Why does procurement need 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 is commonly to create a process. Over time, there are more and more complex processes in place, gradually suffocating the organisation and its creativity.
All this put together brings about a number of problems with processes:
– Things get slow. There are so many steps to cover and so many approvals to get that achieving even a simple task takes a lot of calendar time. I believe that this is the reason for breaking a lot of processes 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 about a talent shortage in procurement. 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 do not 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 do not get talent. Once we get real talent, we definitely cannot keep them with strict processes. It is equally bad for managers as their job becomes one of reviewing and approving. Approving purchase orders, business cases, vacation requests, etc. The brightest people who have worked hard, learned a lot and have a lot to give, become rubber stampers.
– Processes are self-centred. 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 opportunities that arise. 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 arising 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…