… And why what seems perfectly logical kills initiative, destroys morale and is fatal to long term profits
My first job, 58 years ago, was as Assistant Editor of a magazine called “Cotton”.
Every week one firm ran an advertisement that read:
“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey”- Ruskin
This sprang to mind when a colleague told me what was happening in his business, which is Experiential Marketing.
He went to see a client with a new idea. She said “If you’d like to submit it, we’ll put it out to procurement.” This means that about seven other companies were also asked to quote prices to put his idea into effect.
My colleague has been dealing with this firm – a household name all over the world – for over a decade. He has had some amazing ideas for them, one so good it was used for a famous advertising campaign.
As he was leaving their offices he ran into the head of marketing and mentioned his idea. “Brilliant!” said the man, “Let’s do it.” Then a few days later, sure as eggs are eggs, he received an invitation to submit a quote to procurement for his idea. I think firms should always try hard to make sure they’re not ripped off. But is that fair?
But there is more. Currently his firm is competing with a dozen others for a big job in the U.S. with another firm, as famous as the first. Procurement assesses each quote on the basis of a series of criteria. After you quote you are told how you are doing on each criterion. This gives you the opportunity to improve your bid.
That makes sense, right?
Yes: until you realise that these criteria (I think there are 15) are fixed. If your idea has elements that don’t relate to them, too bad. It is price and price alone and those criteria alone that govern choice of supplier.
Procurement is not in itself a bad idea. In the case of government Sir Philip Green pointed out that there are over a thousand suppliers for identical articles like stationery. The National Health Service is the same.
But ideas are not identical articles.
Thus we see how what seems so logical is insane.
By the way, if you want to give yourself an edge when submitting proposals, one man is the most knowledgeable person I have ever met on the subject.
You’ll find him at AndyBoundsOnline.
