http://www.crestbsl.com There are six combinations of factors that determine whether or not your procurement strategy or your strategy for relationships with critical suppliers (SRM) will be effective. In this Slideshare presentation, we look at one of these combinations; that of your organisation's culture (or the culture of your supplier relationship) and your strategy. The presentation also outlines one way of measuring your organisation's culture.

1. 6 Practices
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That Will Make Your
Procurement Strategy
Super Effective!
Part 2: Culture and Strategy

2. In a previous Slideshare, I looked at a way to “stop
your gears crashing” when implementing a
procurement strategy or working with your critical
suppliers.
In particular, I focused on the interaction of strategy
and operations.
This time, I want to focus on the impact of
organisational culture on your strategy - your own or
the culture that springs up whenever you work with a
key supplier.
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4. Culture is the lens through which we see the world
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5. What do we mean by culture in an organisation?
Wikipedia defines it as “the behavior of humans
within an organisation and the meaning that people
attach to those behaviors. Culture includes the
organisation's vision, values, norms, systems,
symbols, language, assumptions, beliefs, and habits.”
Another definition (which summarises the Wikipedia
one) is that “culture provides the lens through which
we see the world; the logic by which we order it; and
the grammar which makes sense of it”.
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6. Comparing Strategy and Culture
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7. This is important to our procurement/supplier
strategies because if they don’t match the
culture of where we work then they are
unlikely to be effective.
If they are not consistent with “the way we do
things around here” then they are doomed to
failure.
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9. One very useful way was developed by Dan Denison.
His belief is that there are four main traits in an
organisation’s culture.
These are:-
• Mission – the organisation’s sense of direction. “Do
we know where we are going?”
• Adaptability – to changes in the marketplace. “Are
we listening to the marketplace?”
• Consistency – rooted in a set of strong core values.
“Does our business model create leverage?”
• Involvement – nurturing the engagement of people.
“Are our people aligned and engaged?”
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Underlying Tensions

11. It is Denison’s contention that these four traits are
closely linked to performance measures such as
growth, quality and innovation.
The subtlety of the model is that it captures several
of the underlying tensions in any organisation or
supplier relationship.
For example, the trade-off between flexibility and
stability or that between internal needs and
external pressures.
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Underlying Complexity
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13. These tensions are even more pronounced when we
add in the complexities of a supplier relationship where
there may be two views on everything.
The conclusion is that although we may be able to
resolve one side of the tension we can’t resolve both.
This means that an organisation’s culture will have a
“profile” which conveys how these tensions have been
resolved and these profiles lend themselves to a
particular strategy.
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15. For example, a culture that is biased towards
Adaptability and Involvement will be good at
encouraging and delivering innovation and
product improvements; whereas one that is
biased towards Mission and Consistency is
more likely to lead on perceived quality and
return on investment.
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17. So how do you put this into action?
The first step is to “take the temperature” of your
own organisation’s culture plus that of your critical
supplier (if you are implementing a SRM
programme).
This can be done through a mixture of surveys,
workshops and interviews. These are often best
done by a “honest broker” who has no direct
involvement in the strategy (this can be someone
from your own organisation or a third party from an
external business).
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View of the Culture
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19. Once you have a view of the culture you can
check your strategy against it to see whether
there is a good enough fit.
If there isn’t then you need to do some work
on either amending the strategy or changing
the culture.
More on this in a future presentation.
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