Editor’s Note: Over the next few weeks on CPO Rising, we’re publishing some “best of” 2019 articles as we reflect on the year and prepare for the new year ahead.
Eight years ago, the theme and subtitle to my CPO Rising 2011 report was “Innovative Ideas for the Decade Ahead.” [Quick sidebar for our dedicated readers: The 2019 CPO Rising Survey is LIVE – if you can spare a few minutes to take the survey today, we’d be most appreciative.] In 2011, procurement-led innovation was an emerging topic. In 2019, it is both fundamental and critical to the success of a Chief Procurement Officer, the procurement department and to the success of and, in some very direct ways, the long-term survival of the enterprise. This is not a hyperbolic statement. This is fact.
In 2019, the businesses that fail to innovate will fall behind and quickly start to fail. Don’t believe me? Here’s a quick test: Pick your favorite stock index and google “Company Turnover in Stock Index since 2000.” For the S&P 500, company turnover has been more than 50% since 1999.
“Failure to innovate” is not the only reason why companies drop out of an index, but it was a major contributor to many that did. Bankruptcy courts are filled with the companies that led their industries for years and decades only to disappear due to a inadequate responses to new market shifts and innovations — Kodak, Blackberry, Toys R’ Us, for example. Failing to innovate a company’s products and services are the most obvious misses, but failure to adapt to new business models (Blockbuster), leverage new technology (essentially every old media company), and anticipate changing customer preferences (David’s Bridal) can also have deleterious effects.
#ValueExpansion is our procurement mantra this year (Reminder: please take our State of Procurement 2019 survey). As part of the discourse, Ardent Partners will examine different strategies, tools, and approaches that procurement leaders can use to generate more value. And, increasing “procurement-led innovation” is going to have a starring role on these pages.
After all, innovation is such a wonderfully powerful word and such a wonderfully broad concept. Innovation can be complex; but, it can also be simple. Some innovations are market-driven while others are engineering-led. Innovation can create markets and innovation can create dilemmas. Whether it results in an industry “game-changer” or a simple, incremental improvement, innovation is generally in the eye of the beholder. Given the level of organizational maturity, it is no surprise that most procurement-led innovation today focuses on the incremental; but, the reality is that many of the enterprise’s larger, longer-term opportunities will depend on how well procurement identifies and drives innovation within the enterprise and across the supply chain. This is not hyperbole. This is fact.
Andrew Bartolini is the Founder & Chief Research Officer of Ardent Partners and the publisher of this site.
RELATED RESEARCH
Our Procurement Mantra for 2019? “Value Expansion!”
CPO Rising Summit: Self-Service, Agility, and Digital Transformation
Tagged in: Chief Procurement Officer, CPO, Innovation, Monday First Thing, Strategy
