One of the best things about having good relationships with publishers is that I end up reading and reviewing titles that range beyond procurement or spend management. And yet, there is no question that the value and competitive advantage of a well-managed supply chain runs right through the center of all business strategy books.
The Big Pivot, by Andrew S. Winston, is no exception. The core message of the book is that there are three ‘mega challenges’ that every lasting business must be prepared to face:
- Climate change
- Resource constraints and rising commodity prices, and
- Technology-driven demands for more transparency. (p. 6)
Businesses that are prepared to recognize and face these challenges head on must ‘pivot’. The changes required to maneuver an organization through this new economic reality may be complex and even painful. Leaders that do so successfully will look like geniuses and innovators – partly because only a minority of companies are likely to be able to make the requisite commitment to transformation.
The Big Pivot recognizes the importance and potential of supply chains. One statement that is both empowering and haunting is “…companies should heed one lesson: any operation, anywhere in your supply chain, no matter how remote, is now your responsibility.” (p. 2) And as long as we can remember that all supply chains eventually lead to our consumers, procurement is positioned to occupy a critical role in any transformation.
Green initiatives are a current running through the entire book, and yet the author’s working definition of sustainability is less environmental than the requirements many of us have come to associate with sustainability initiatives. “The word sustainability means, by definition, the ability to keep doing what you’re doing.” (p. 63) Investments in renewable energy and corporate social responsibility aside, this book looks at what a business is looking to accomplish in the long term and does not take for granted that unanticipated changes will, by necessity, require changes to process, sourcing, and materials.
In order to drive this long-term view through every effort, Winston makes valid points about the need for corresponding changes to performance metrics and incentives. This requirement affects internal and external relationships. The section on Wal-Mart’s supplier sustainability initiatives, included in the chapter on ‘Radically Practical Strategies’, hits very close to home. One company executive summarized the feedback they received from suppliers: “It’s great to ask us questions, but it only matters if you do something with the information.” (p. 152). How many RFPs do we issue with questions on important, value-based topics, only to make an award that emphasizes savings because that is our primary performance metric? Only once the metrics change – a commitment that must be made at the highest levels of the organization – will the priorities, execution, and results contribute to the actual sustainability of the business.