2023 GLOBAL SRM RESEARCH REPORT
CASE STUDY: NIKHIL PARVA
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Companies are increasingly using a standardised methodology for goal-setting, now they just need to invite suppliers to join in, says Nikhil Parva. Ambitious aims
“Bringing in suppliers early on engenders trust, and focuses their effort on helping you to achieve your goals, instead of what’s simply contained in their contract.” Nikhil Parva
These figures focus on the internal dissemination of information. Statistics revealing how well plans are communicated to suppliers would likely be even more dismal. Some don’t even attempt to share such information. Certainly suppliers are rarely part of the process of setting annual plans, despite the key role many play in helping to achieve them. That could - or should - be about to change with growing adoption of a goal-setting and progress-tracking methodology that’s supported by increasingly accessible technology. Here we consider why and how procurement professionals can capitalise on the expertise that exists in their extended enterprise by leveraging the tools at hand. Objectives and Key Results The methodology that’s gaining traction is called ‘OKRs’, which stands for ‘Objectives and Key Results’. This framework is being used by a growing number of companies, particularly some of the tech giants in Silicon Valley, to help set measurable goals and improve performance. OKRs can be used for setting company-wide, business unit and/or individual goals. Enabled through a cascading structure, the framework allows ‘Individual Contributors’ to assess how their efforts link into the larger company or business-wide outcomes. Following the success of those credited with its creation and early adoption, it is an approach that has been deployed across various industries irrespective of their type. Interest in this approach continues to grow, as does the availability of technology used to help manage the process. How they work OKRs are broken into two areas: the aspirational objectives, and the actions needed to achieve them. These are effectively, the ‘what’ and the ‘how’.
Organisations are well-versed in setting annual plans. Built into the business calendar, this process involves evaluating the previous year’s performance; followed by identifying goals for the year ahead and the actions required to hit them. Plans to achieve these goals are then devised by each department, with timelines set against specified milestones.
It’s a well-trodden path that’s part of the regular rhythm of doing business, although, according to research, too few do it successfully. In the 2023 Asana study, the Anatomy of Work 1, only 16% of almost 10,000 global knowledge workers said they thought their organisation was effective at setting and communicating company goals.
through regular check-ins, feedback, continuous learning, collaboration and problem-solving. Objectives, Key Results, and the progress towards them, should be visible across the organisation or business unit to drive an increased level of transparency. The process of goal-setting, sharing and collaborating, as well as tracking can be done by using technology. Tools are becoming more widely available on the market as adoption has grown. Microsoft’s acquisition of ally.io, which it said was to improve employee experience by aligning people’s work with team goals and company mission, will likely expedite the take- up of OKRs yet further. Involve suppliers Setting OKRs helps to drive integration into the planning process of setting and sharing company and/or business-wide goals. Yet, so far, this work has typically happened without the involvement of suppliers. This is a missed opportunity. OKRs can be a powerful tool for organisations to drive mutual success with their strategic suppliers by enabling a greater level of alignment, accountability and collaboration.
As an example, procurement might set an objective to establish a strategic relationship management programme with suppliers. Some initial time-bound, quantifiable and measurable key results might include: requesting 360 O feedback from suppliers about what your business is like to work with; segmenting your supply base; and identifying a small number of suppliers and internal stakeholders with which to try piloting a new approach. The idea is to set objectives that are not only ambitious but inspiring: A good Objective should inspire and engage people. It should provide a sense of purpose and direction, making people feel excited and committed to achieving it. Meanwhile, the Key Results should break down the achievement of the goal into measurable outcomes that can be used to objectively determine if it has been achieved. And if not, what remains to be accomplished? Key Results should be clear and easily identified as achieved/not achieved without any judgment. Supporting tech tools Goal-setting through OKRs is best done at an organisational or business unit level so that everyone is clear on their role in achieving the needed outcomes. OKRs can help teams, big or small, to collaborate and achieve challenging goals
1 The Anatomy of Work, Asana, 2023: https://asana.com/resources/anatomy-of-work
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