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How to Succeed in Procurement Transformation Without Really Trying

Here at New York City Sourcing Leaders, an innovative NYC-based network of sourcing and procurement leaders inspired by knowledge sharing and collaboration, we’re all practical visionaries with big plans. But even the grandest of plans always start with small steps toward success.

In 2002, the British cycling team had won just one medal in 76 years. When Sir David Brailsford accepted the uncoveted position of head coach, he knew the team had a long road ahead of them. A former cyclist with an MBA, Sir David became obsessed with finding as many marginal improvements as possible for his team. Compounded, these continuous improvements eventually became his team’s competitive advantage. In the 2008 Beijing Olympics, the team earned a whopping seven out of the ten available gold medals.

Sourcing Leaders Take on Change Management in New York City

So, what can we learn from Sir David? At Tuesday’s New York City Sourcing Leaders event, Simon Geale of Proxima Group, a leading procurement services company, led a discussion about driving procurement transformation journeys, one step at a time. MDC Partners’ Jason Cammorata, Vice President of Strategic Sourcing, and Ryan Linder, EVP, Global Chief Marketing Officer, hosted the session in which we learned about a variety of unconventional transformations.

New York City Sourcing Leaders

Like Sir David’s approach, Proxima’s Geale advocates for finding small improvement opportunities that add up to high-impact results. The impetus for this change can be complicated, but Geale said it most succinctly on Tuesday, “You have two options. You can stand still, or you can transform.” As leaders, we all know the unsaid implications of this statement: if you stand still, you get left behind.

Small Changes and Consistent Progress Generate Incredible Results

Transformation of any kind implies a big change, but small changes still add up to big results, and there’s no one-size-fits-all approach to any transformation. What may work for one organization may not work for another.

The first step in any transformation journey, Geale says, is to accept this fact and adjust your view of transformation. No matter what, we need to do what we can to drive improvements (however minute they may feel) and keep our eye on the end vision. Geale views this as a balancing act between seizing opportunities and compensating for deficiencies.

NYCSL

For example, a new business may start off without any procurement function at all. From there, maybe a need is identified for a sourcing generalist, and then Sourcing advances into category management. A structured “sourcing transformation plan” may never actually be instituted, but as the business evolves and people strive to continually improve operations, the Sourcing function eventually becomes an elevated, strategic partner for other business stakeholders. In the thick of this evolution, it may simply seem like an obvious response to an obvious need, but looking back, going from zero procurement to a mature procurement team engaged with the business to drive collaborative impact through strategic sourcing is truly an incredible transformation.

At ServiceNow, for instance, all Sourcing processes started off completely manually. By implementing incremental changes, including introducing Scout’s sourcing platform, ServiceNow was able to automate sourcing processes and events. The Procurement team now gives business units visibility into events, which has eliminated deficiencies in communication and emails of status requests and capitalized on new opportunities to save and scale the small Sourcing team.

The Power of Marginal Gains Transcends Industries

Like cyclist coach Sir David, Geale pushes Procurement to think outside of the box and come up with innovative ways to transform. “Challenge yourself!” Geale says, “Evolve yourself and your thinking, your impact and your function.”

No matter whether it’s a professional cycling team, a competitive eating champion, a tennis superstar, or a massive medical institution in question, Geale shared, experimenting and implementing simple, thoughtful changes can go a long way toward driving successful transformations.

NYCSL

Geale elaborated on each of these examples in turn, emphasizing the life-saving process transformation at the Virginia Mason Medical Center. A little known but tragic fact is that preventable medical errors are a major cause of death in the United States. After several close calls, Virginia Mason Hospital decided to take a stand against these errors. By just color-coding hospital bands and changing medicine labels to be more distinctive, they were able to prevent countless other (potentially life-threatening) errors and even achieve a 74% reduction in insurance premiums they paid.

Be Part of the Conversation and Share Your Transformation Experiences

Have you had a transformation experience you want to share? Whether it’s a story of triumph, a funny anecdote, or a warning of “what not to do,” we’d love to hear about it and celebrate (or commiserate) together.

Join the conversation in the NYC Sourcing Leaders LinkedIn group to stay updated on future networking opportunities like this one and stay in touch with each other in the meantime. Can’t wait to see you at the next event!

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