9 Tips for Stifling Supplier Innovation
January 20, 2013
Mark Perera
2 minutes

I Just found a great blog post from Rosabeth Moss Kanter on the Harvard Business Review entitled ‘Nine Rules to Stifling Innovation’. I thought it would be apt to apply the same style and thinking to one of my favourite topics; Supplier Innovation.

So here I present the 9 rules to stifling supplier innovation.

  1. Be suspicious of ideas that come from your suppliers. Suppliers only act in their own interests and there is no chance that your strategy, innovation and R&D teams could have possibly missed anything.
  2. Keep suppliers busy with legwork. Closely policing your suppliers to ensure they can meet your ever changing needs, is a sign that they understand and are responsive to your intricacies of your business. Their account managers will be too busy to try and second guess what your business needs to be worrying themselves with providing improved ways you could work together.
  3. In the name of excellence, encourage cut-throat competition. If a new idea comes in from a supplier, immediately put it out to the rest of your suppliers to see if they can provide it cheaper. Even better, run a RFX and auction. The best results come from competition not collaboration.
  4. Don’t share any information with your suppliers. Sharing product roadmaps, demand and organisation charts will only encourage them to come up with ideas on how to help. Knowledge is power!
  5. Sit on ideas for as long as possible. If a supplier does find the time to share some innovation, ensure not to get back to them in a timely manner. Let the idea bounce around the different areas of the business with no ownership until it fizzle’s out and the supplier stops asking for an update.
  6. Ensure quarterly reviews don’t happen. Make sure the procurement team are so busy that they don’t have the time to hold their quarterly meetings with top suppliers. Having face to face meetings with suppliers on a regular basis may provide a sign that you care about the relationship.
  7. Pay late and extend payment terms. By paying late, your supplier will spend hours chasing your accounts payable team trying to get payment. Even better push out payment terms as far as possible. Your FD will thank you, and the supplier can bear a little bit of pain for the grace of having you as a customer.
  8. Act as though punishing failure motivates success. If a supplier’s idea does somehow slip through the net, ensure the employee who championed it is aware that failure will be a direct reflection on their capability. A few public hangings will soon stop future failure!
  9. Above all, never forget you are the customer and you already know everything there is to know about your business.

Following these rules will ensure suppliers will never see you as a customer of choice and will take their innovation to your competitors. In a constantly evolving marketplace, you’ll be able to stand still and carry on with business as usual… At least for a little while.

Mark has 20 years experience building and delivering high value enterprise solutions to help large corporates work smarter. He previously founded Procurement Leaders which services the most influential buying community in the world.
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