Your Company is Not Innovative Enough for Supplier Innovation?

There is a lot of buzz about Supplier Innovation at the moment. Which is music to my ears, however I question whether some companies are innovative enough themselves, to really access innovations from their suppliers.

Its coming up to a decade since I launched Procurement Leaders and pledge my allegiance to the fine profession. For much of this time their has been murmuring about a movement away from cost management focus to one of value. The murmuring seems to becoming more of a chatter now and I am regularly speaking to procurement leaders about their increased focus on capturing innovation from their suppliers. It’s great to have these conversations, but one question that I repetitively have to ask is whether their company is innovative enough to capture supplier innovation.

The standard answer is of course we are, followed on by an explanation of the how the company has grown x fold, increasing in profitability and revenue over the last 3 years and how they just had a top consultancy implement their supplier innovations programe. A fair response, but is it really enough – does innovation really flow through the viens of the business? Do employees feel that they have the autonomy to question the business model and or look to optimise it. Does the company except that failure is part of the process of innovation and embrace it, not punish it? A number of these points I covered in my previous post ‘Nine Rules of Stifling Supplier Innovation’ .

A.G Lafley interview with the Havard Business Review shows a company that gets it. His mantra of ‘Integrating Innovation into Everything We Do‘ is inspiring. However they are really ahead of the game and I don’t think the environment of innovation can be created overnight.

I’m a big fan of Lynda Gratton’s book Hotspots. In the book Lynda explores the dynamics of highly energised environments which provide the perfect place for the synthesis of new ideas and innovation. Its this type of environment which will drive supplier innovation and thus competitive advantage, as your teams and suppliers work and brainstorm ideas together – something that can not be manufactured in weeks. In addition to this their needs to be a high level of trust from both internal and external participants to collaborate, something that in most companies is still lacking due to price focused relationships of the past.

hotspots_book

You always know when you are in a Hot Spot. You feel energized and vibrantly alive. Your brain is buzzing with ideas, and the people around you share your joy and excitement. The energy is palpable, bright, shining. These are times when what you and others have always known becomes clearer, when adding value becomes more possible. Times when the ideas and insights from others miraculously combine with your own in a process of synthesis from which spring novelty, new ideas, and innovation. Times when you explore together what previously seemed opaque and distant.

Hot Spots: Why Some Teams, Workplaces, and Organisations Buzz with Energy – and Others Don’t by Lynda Gratton

Maybe my questions and thoughts are wide of the mark. My view might be slightly blurred due to me spending the last decade of my life running my own startups which I believe have some of the characteristics of what Lynda calls Hotspots. For me large corporates don’t seem like the most innovative places to work, but maybe they are Hotspots waiting to capture sparks of innovation from their suppliers.

My goal is to follow on from Lynda’s work and search out Supplier Innovation Hotspots to see what makes them work. If you have know of any, please let me know.

Supplier Innovation Hotspot

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Mark Perera

Mark Perera

CEO and Founder at Old St Labs
Mark Perera
Mark Perera
Mark Perera

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