by Alex Howerton, Business Development Manager, Source One
This month’s excerpt from the book Managing Indirect Spend identifies organizational politics as a potential hurdle to overcome in developing an improved spend system. But why would this be the case? Isn’t everybody within an organization focused on the best interests of that organization? Certainly, but “best interests” can be an idea subject to widely differing interpretations, sometimes resulting in a series of actions that can actually limit the organization’s flexibility and responsiveness. Understanding some of the dynamics of how such a “status quo” gets formed can shed light on the organizational modifications necessary to implement a successful new spend management program.
In his 1962 book The Structure of Scientific Revolutions, Thomas Kuhn introduced us to the idea of a “paradigm shift.” He outlined how scientific inquiry can reach a plateau, where no further progress can be made, because the theory behind the science no longer offers enough flexibility to accommodate new, more refined data.
What is needed is a paradigm shift to a new, broader way of looking at the world, which can incorporate the new data and offer a clearer roadmap of the path forward. Kuhn’s classic example discussed the details of how the Copernican sun-centered model of the solar system replaced the earlier Ptolemaic Earth-centered model.
While inaugurating and executing a new spend management program by no means carries the weight or significance of changing our entire view of the Universe, nonetheless the same organizational structural dynamics are at work. What happens in both scientific research and organizational operations such as spend management is that standard methods of working get established and solidified into habits. This can effectively institute standard operating procedures, which is a good thing, as long as external conditions don’t change drastically. However, this becomes a detriment if, for example, lower-cost alternatives or new technologies make the old way of doing things more expensive than necessary. Some common refrains we often hear are, “If it ain’t broke, don’t fix it,” and “That’s the way we’ve always done things around here.” Over time, those can become rather expensive wordviews for an organization.
Change can seem scary, because the outcome is unknown, and could very well turn out to be worse, rather than better, than current conditions. Fear of the unknown can be a powerful disincentive to taking action to implement change, even when the existing methods are known to be inadequate or insufficient. Inertia plays its part, too. As the scientist Newton informs us, things (and people) tend to keep moving in the direction they’re already moving, and energy must be applied to change that direction. People don’t want to expend that energy without reasonable assurance that the payoff will be worth it.
That is precisely where a strategic sourcing partner like Source One becomes valuable. We can help organizations control variables and implement a change process as smoothly as possible. Some employees may be so focused on their specific roles that they have difficulty seeing the forest for the trees. Having the “fresh set of eyes” of a third party can often discover and ameliorate stumbling blocks. Or employees may fear that such spend management changes might jeopardize their jobs. But the many scientific revolutions of the past few centuries, of which Kuhn outlined the dynamics, have given us a world in which change and innovation are the norm, not the exception. We all now must adapt or die.
Those employees who recognize the value of change, and embrace it, will become more valuable to an organization, not less. One can only make oneself obsolete. Source One is very skilled at, and has a long history of, helping organizations and their employees effectively navigate the complexities of a paradigm shift to a new spend management program, thus empowering those organizations to achieve their own small revolutions in how they do business.