Buyer-Driven Innovation

PurchTips edition #16

 

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Unmet Needs + Communication = Innovation

All successful organizations' success can be attributed to one simple concept - they recognize a need and fill it. Think about it - universities succeed because they fill individuals' needs for education; hospitals succeed because they fill individuals' needs for health care; and your suppliers succeed because they fill your company's need for products and services.

So, if the concept is that simple, why do needs go unmet day in and day out? Well, sometimes, it can be difficult for a supplier to find a need. That is where you - the buyer - come in. If you recognize the fact that your needs cannot be met by any supplier in the market, speak up! A smart supplier will recognize your need and fill it. You can sometimes drive innovation simply by offering your input or feedback to a responsive supplier. While some innovations result from someone coming up with an idea for a product or service and then convincing the world to buy that product or service, many innovations are the result of a prospective buyer communicating a challenge and compelling a supplier to help them overcome that challenge.

Here are three strategies for communicating your unmet needs in a way that can drive innovation:

  1. Have quarterly meetings with key suppliers. Use these quarterly meetings to discuss your unmet needs and to learn how your suppliers feel about filling these needs through innovation.
  2. Establish a supplier feedback program where you annually send written correspondence to your key suppliers. This correspondence should address what the supplier does well and areas where the supplier can innovate to better meet your needs.
  3. Insist that your suppliers establish a program to obtain periodic feedback from all of their customers. If the supplier leads the feedback program, you will benefit more because more voices will provide input.

The feedback process does not need to be complex, or even formalized, to be effective at driving innovation. We have an example from our own early experience as a supplier of online classes, which end with a short survey.

Example Of Buyer-Driven Innovation

In one survey question, we ask how we can improve our online purchasing classes. A few of the first students to take "Microsoft Excel For Purchasing Professionals" suggested the addition of a visual comparison mechanism - a way for the student to see if her spreadsheet looked the way it was supposed to look. So, we acted - big time. We added dozens of helpful screenshots. And you know what? The quality of our class improved immensely. Without hearing the voice of the buyer, the pace of our continuous improvement and innovation efforts may be slower.

Never underestimate the power of your suggestions as a buyer. Your words can drive innovation and ensure that your company's unmet needs are filled.

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