What can board games teach us about procurement?

GordonDonovan_100.jpgThere are several parallels between games and business strategy. Gordon Donovan (FCIPS), Group Director: Procurement and Supply, Epworth Healthcare, wonders what we could learn about procurement from games and, as such, takes a look around the world wide web to find out more.

Join us at Smart Procurement World Western Cape on 9 & 10 April to understand “procurement board games”. Ian Russell (founder of Disrupting Consultancy, ex-CEO of BCX and a former CPO of Telkom, SABMiller and Absa) will discuss what procurement leaders should grasp now to become board-ready

We have probably all played Monopoly at one time or another (it was a Christmas staple in my household). Well, when it was first designed, it was meant to be a teaching tool to teach players about the evils of monopolies and private land ownership (property is theft?!). As such, this article aims to discuss what can we learn from the modern version of Monopoly.

The article also suggests that other board games are centred around creativity, innovation, teamwork, empathy and resource management but also emphasise outcomes more closely resembling the collaborative wins that have become so desirable within and between organisations:
– Pictionary comes to mind as clearly requiring observational and empathy-based skills
– Cluedo (or Whodunit) helps sharpen deductive-reasoning skills
– Trivial Pursuit, especially when played within teams, teach the value of diverse knowledge sets

Next, I want to highlight Game Theory. We teach Game Theory on our advanced negotiation programmes and one of the takeaways is to understand the type of game for the negotiation that you are in. From a business point of view, applying Game Theory means that companies can succeed spectacularly without requiring others to fail. And they can fail miserably no matter how well they play if they make the mistake of playing the wrong game.

The game of business is all about value: creating it and capturing it. We take our clients through the value matrix, a tool designed to help business and procurement speak the same language. The Harvard Business Review talks about a value net used to identify customers and who the players are. Within it there is a trace of Porter’s Five Forces (unsurprisingly really), so it’s worth a read. My takeaway from this is to take a step back, consider who the players are in your procurement or organisation and then decide on the type of game that you want to play.

Talking of strategy, according to My Purchasing Centre, more than 95% of purchasing or supply management organisations do not have a long-term strategic plan.

Many of the plans that are completed are done once, and then put away in a ring binder or on a hard drive, never to be referenced again. My Purchasing Centre provides some tips on creating and living strategy:
– Create vision and mission statements that align with the organisation’s vision and mission
– Be bold and ensure that people realise that you are aiming for supply management, not for traditional bureaucratic purchasing
– Try to gain a broad consensus and gather input from surveys, one-on-one meetings, research and as many employees, suppliers and customers as possible
– Keep it dynamic, up-to-date and a living document

Finally, I’d like to draw your attention to this particular article: it examines the strategic decisions surrounding extending the scope of procurement. It suggests that there are three main questions that need to be asked:
1. How will your customers and procurement staff collaborate?
2. Do your procurement professionals have sufficient category expertise to add value?
3. Are there enough skilled procurement professionals within the team to handle the volume of buying?

The article goes on to say that, until recently, the answers to these questions have been routine: policy, process, technology, hiring and training. However, the reality of execution is more complex.

Some of the learnings can be applied to designing internal strategies for greater collaboration within the business. For example, it mentions that strategy documents comprising more than 50 pages in length rarely resonate with internal stakeholders.

I think the key with all strategies is applicability: rarely does one size fit all. In today’s volatile environment where economic, political and technological change runs rife, greater flexibility and agility are required in our strategic choices – making the games we decide to play and enter into all the more important.

You can subscribe directly to the sources identified. If you want to take the discussion further, contact Gordon Donovan on LinkedIn or follow him on Twitter [@gdonovan1971].

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