Procurement

What can procurement learn from Tinder?

What can procurement learn from Tinder? We conduct qualitative due diligence on our relationships, so why not our procurements?

Most people would agree that picking a romantic partner is one of life’s most significant decisions; the due diligence for which is done during the dating phase.

If you get it wrong then unfortunately, anguish, frustration, a wheelbarrow of cash, and a lot of paperwork is your prize. Which funnily enough is the same thing you get if you get into bed with the wrong supplier.

But whilst many organisations conduct deep dive due diligence on their partners, the questions that are asked, are usually nowhere near as meaningfully probing as the ones we ask about our potential spouse.

For example before we get a joint bank account with our husband or wife, we don’t just want a financial probity report on how much money they’ve got in the bank, we want to know what type of people they are, how they act, how they plan for the future. Whilst a credit score could be useful indication (albeit a really weird thing to ask whilst out on a date) – it still leaves most of those big questions outstanding.

Interestingly, the same applies when we think of suppliers. For example, a financial probity check on a supplier may tell you a bit about its financial health and whether it’s about to go out of business – but reports only go so far, and their data points are limited. All of those big questions, who is the organisation, what do they believe, how do they treat their people remain unanswered.

The dating due-diiligence procurement framework

The reality, for both suppliers and romantic partners, is that you won’t find the answer to those questions in a report, a procurement questionnaire, or a reference (although calling an ex could be insightful…).

The way that we build confidence in our romantic partners is by spending time with them; identifying their core values, habits and behaviours through experience and insight.

So when spending millions of dollars engaging with outsourcing partners, why don’t organisations consistently invest in this ‘qualitative’ due diligence?

All of the procurements I’ve been involved in have (intentionally or not) always included a smattering of discussion on culture and other touchy-feely characteristics, but this is rarely formalised and scored meaningfully.

Which seems a bit mad, because without doing this – how can you say you really know the partner that you’re committing your time, brand, customers and cash to for three, five or ten years?

Many people far more intelligent than me are already doing this and have built meaningful models – but I thought I’d have a stab at some of the due diligence that I’d want to do on my supplier, using those questions that you’d consider about a romantic partner as inspiration!

 Questions asked about a potential romantic partner  Questions asked about a potential business partner Potential indicator
What do they want out of life? What do they want out of this relationship? Alignment of objectives
How do they dress? Do they look comfortable in the way they are presented, or are they putting on a facade? Working culture
Do they want to have kids? Do they see a future for the relationship beyond the immediate deal? Commercial leverage and investment
How do they treat the waiter? Do their people like working for them? Delivery quality
When you argue, how does it get resolved? How do the leadership respond to conflict? Ability to fix problems and protect the relationship
Do they tell you the truth? Are they genuinely transparent in pricing, credentials and approach? Visibility and communication
Do they buy you dinner? How much are they investing in pursing this deal? Balance of power, priority of customer
How do they treat their family and friends? What do the references say? Quality and performance
What’s their dream? What specific incentives do their people have? Behaviour: alignment of incentives

Read more at www.sykessays.com

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