One of the problems that procurement functions face when they engage in supplier-enabled innovation (SEI) is how they measure and prove the success of those programmes to the business.
In terms of a formal programme run by procurement, SEI is relatively new, but it has tended to take place in pockets around the business. In itself this makes developing a set of metrics challenging. On the one hand a function is trying to create a set of metrics for a new concept and understand what will work; and on the other, some metrics may already exist.
It was in this context that the Procurement Leaders Supplier-Enabled Innovation Center (SEIC) community came together at the New Jersey offices of snacking giant Mondelēz International. The group of attendees from across the industry spectrum gathered to discuss and workshop the best ways to both set metrics and create a culture of innovation in their organisations.
These discussions revealed a number of common challenges around the setting of metrics. These included:
While the group identified commons challenges, they also set about identifying the ways that these could be overcome. These included:
Keeping things simple – The group were unanimous in their belief that any metric has to be both simple and clear. Anything that added complexity or ambiguity would not help in terms of measuring success.
One of the steps the group agreed that should be taken here was that early on the process, existing metrics should be accounted for and utilised.
The group said that the minute you set metrics that either double up on existing ones or are not recognised by others, things will inevitibly become more complicated than they need to be and that will make it near in impossible for metrics to be effective.
Develop metrics collaboratively – This follows on from the previous point of keeping things simple, but the group suggested that if you want to create a effective set of metrics then you have to develop them collaboratively with your key stakeholders. As mentioned, it is highly likely that metrics will already exist and, while it is important to utilise them, you need to use them as a platform from which to build.
Working collabortivley would, the group said, also help you to build trust in the function and will help you better define where an SEI programme is headed.
Tell your story – Any innovation programme will create a whole host of interesting stories in terms of successes, failures, lessons and challenges. Those stories should be used and told across the business because they will help drive a broader interest and understanding of what an SEI programme is doing and the success it can bring. This will ultimately give a wider audience an understanding of the measures of success and how they might be able to help deliver on them.
The ultimate success of an SEI programme rests on its ability to measure and prove what it is delivering. A few simple steps – drawing in metrics already used, bringing stakeholders into the metrics development process and communicating the impact a programme is having – will go a long way to helping build the strong foundations of an SEI programme and create a culture of innovation in a business. These aren’t difficult steps but they are key to progress.
Thank you to our hosts Mondelēz International as well as IBM, Novartis, Starbucks, International Paper, Bayer, Pfizer, Accenture, Corteva from the SEIC community who came together to discuss these challenges and share ways forward.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.