Measure your savings against lost lunches
If someone asked you about your current objectives, what would you say?
I’ll hazard a guess that making savings might feature prominently, especially in the current economic climate. And I agree this should possibly be the priority.
But what I really want to know is ‘how’ you have gone about achieving the objective. The level of savings may accurately represent how well you applied world-class practices but I’d like to know more. Are the relationships with your manager and peers improving? Have you ensured stakeholders aren’t alienated? Are suppliers continuing to thrive? I believe it’s these things that will sustain what you’re doing.
It’s easy to ignore these and pretend that a supplier going out of business was their own fault for accepting the pricing – even though they felt they had no alternative. Or to ignore the stakeholder or colleague who now won’t speak to you, assuming their opinion doesn’t matter or you’ll patch things up with them later. Or to ignore the aches and pains because you just need to get through this week, month or year, and then you’ll think about that holiday or eating, sleeping and exercising properly.
If “what gets measured gets done” (as the phrase goes) then it should come as no surprise that we need additional objectives to ensure the sustainability of what we’re doing. You could try adding these:
- Percentage of savings supported by internal stakeholders
- Percentage of savings with active participation from suppliers (working together not through negotiation)
- Percentage of holidays taken
- Percentage of lunches missed (well, perhaps that goes too far, but you could start with the percentage of lunches missed per month)
Are you measuring the “how”?
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“How” is what parties concerned within an organization expect from “procurementists”, especially, during shrinking economy.
Alison: you seem to be suggesting that there is a world out there populated by unfit, underfed, exhausted pasty buyers who don’t get along with their colleagues, all in the interests of making savings (saving their jobs?). Is there evidence for such a view?
To me the most important key element is collaboration. Of course as procurement specialist we expect to generate savings. One of the aspects sometime overlooked is innovation the comes both ways (from suppliers and clients).
There is a recent article about how Nestle achieved growt and savings despite of our current economic environment.
Bill – I’d be intersted in what KPI’s Nestle use to support this type of approach or whether you think it’s built into the culture?
Ian – I didn’t realise I’d painted it that badly – the evidence is from discussions and responses on tweets, blogs, networking events, conferences and working with purchasers and their stakeholders. Unfortunately I’ve yet to see anyone setting these sorts of ‘stakeholder/collaboration’ KPI’s that would prove they weren’t needed and had many discussions to prove they were.
The well being aspects are more general and I’ve assumed that purchasers are no better at that than any other area within the business. http://www.HRZONE.co.uk has many articles regarding stress increasing in the workplace. I’m just wanting to encourage purchasing to adopt KPI’s that flag some of the key contributors to stress before they have an impact on the individual and therefore team.
Since writing the blog I’ve been on a workshop on the relationship between food and well being and even cognitive skills. So I’m even more sure that all employers should support employees in eating regularly. I just know many people tell me they don’t have time and an environment that doesn’t support them taking a break. I would suggest they don’t have time not to. The Dr who ran the workshop has all the evidence to support that too.
Interesting take on this from Chip Conley.
Re measuring the intangible
http://www.ted.com/talks/chip_conley_measuring_what_makes_life_worthwhile.html
and Telegraph article last week attributing £50m a day lost by business due to people not taking adequate breaks http://www.telegraph.co.uk/news/uknews/8405677/Skipping-lunch-break-costs-business-50m-a-day.html