I have been thinking lately – yes, yes, the fire department has been notified – about procurement governance. It then follows that neither you nor I will have trouble sleeping tonight.
Since I won’t be writing a textbook on the subject, I’ll just pick two items that I think should be considered that, in many cases, are not.
- The Decision-making process – Often, the process for making-decisions is an afterthought. The person or small group that makes decisions assumes that he/she/they accurately represent what is A). Right or B). The will of the group around them. However, ask Loewenstein, Surowiecki, Taleb, or J.S. Armstrong how that generally works out. Two words “Sub” + “Optimal”. Say them together now. Good.
- Emergent Strategy – I love creating and building systems. It feels like we are being scientific, even though business can only uneasily borrow concepts from our more systematic brothers and sisters. It feels like we can build a system that, if everyone just performs their role, will work brilliantly. And again, we’ll be….well, right! The problem is that reality has no particular interest in our feelings, and that some of the best strategies emerge from the ground up. Soichiro Honda, can you hear me? Giving people the skills and knowledge to think creatively, and then empowering them to take advantage of opportunities should be part of our approach to governance. My own tendency is to go all out on the rational planning thing, but knowledge and experience tells a different tale.
Go forth and do great things.
- Generation Why: What’s Eating Soichiro Honda? (thetruthaboutcars.com)
- Leadership in procurement (prometheusprocurement.com)
- Golden rules of e-procurement (procurementtv.wordpress.com)
- Structured decision making for developing strategy (protegra.com)
- Wisdom of Crowds by James Surowiecki (whatwearereading.typepad.com)
- Daniel Kahneman and Nassim Taleb NYPL 80 Minute Talk (valuewalk.com)