When I was thinking of a subject to write about for my latest blog article, I thought it would be a great opportunity to write about something on topic and which encompassed two of my favourite subjects; procurement and Love Island.
Some of you may read the title of this blog and think that a blog about Love Island is “not for you.” I would urge you to persist…I thought the same about Love Island itself when I was first subjected to an episode by my wife last year. However, over time I became hooked, I sort of fell into the Love Island world (sound familiar with how you ended up in Procurement?) The icing on the cake was when I heard that one of this year’s contestants, Jack, was responsible for selling office supplies (and was bragging about how good he was), my mind immediately screamed “eAuction!” So what exactly do procurement and Love Island have in common?
Effective contract management
The top earners from last year’s Love Island have made a reported £1 million each since leaving the show through various endorsements, sponsorships and more. Rumours are that this year the show’s owners have clauses written into the contestant contracts that they receive 10% of all future earnings they receive off the back of the show. How the show continues to monitor and maximise benefit from this new clause will require some very prudent contract management. Perhaps if they’re very shrewd, there is even a clause that states that the % increases as their earnings increase, similar to how some of you may have rebates based on volume within your contracts with suppliers.
Negotiate when you have the leverage
Continuing with the contract management theme above, the opportune time to arrange these contracts is before the show begins and the power lies with the show owners. In Kraljik Matrix terms, the contestants are ‘leverage items’ before the show starts. There are thousands of others who will happily accept a place on the show if a contract cannot be accepted.
It’s going to be much harder to negotiate a contract with the show’s winner once they leave the show, as the power balance will lie with them. Apply the same to your tenders, if you can get the supplier to agree to an NDA and Terms & Conditions as part of your Pre-Qualification Process.It is much easier to get the terms that you want, and will lead to a much more efficient implementation phase upon award. The supplier can be extremely demanding with their terms if they have been told, or believe, that they are going to win the business.
Speak with your stakeholders…even the difficult ones
Only an experienced Love Island viewer will have picked up on this, but the contestants are very good at approaching and having the difficult conversations with their fellow contestants. There is much to be learned by procurement on this, get out into the business as much as possible and engage with your stakeholders, take the initiative to arrange a meeting. The more that you are seen to be engaging with, and having those conversations with business partners, the better placed you’ll be to be able to offer strategic value.
Still sceptical about eAuctions…try it first with an office supplies event
20 years later and there are still reservations around reverse auctions, and misconceptions that they are difficult and complex. They really do not need to be. They are also not just applicable to non-strategic, commodity based items. However, if you are still unsure about eAuctions, office supplies is always a great category to get started with as it’s easily defined and there is high liquidity (viable suppliers). Market Dojo even offers the opportunity to run an office supplies auction for free: https://www.marketdojo.com/office-supplies/
If you are still not a fan of Love Island, I’m sure that you would take great pleasure in seeing Jack sweat under the pressure of an eAuction.
Are there any other similarities that you can see between Love Island and Procurement? Please feel free to comment below.
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