Harnessing a start-up needs particular attention, according to Warrick Cramer. The CEO of two-year-old Tomorrow Street, the Luxembourg-based innovation hub of Vodafone, offered some tips to delegates at a recent CIPS SM Forum.
Nurture the start-ups
Start-up companies need an environment in which they feel nurtured, said Cramer, who had to break the mould to build a lasting innovation model that start-up suppliers and Vodafone would benefit from. Start-ups will require help from procurement professionals to navigate their new fields of business and to develop their strategies for going to market. Lead the innovation with purpose.
Manage risk and adapt
Small and medium-sized start-ups are often unable to deal with the processes and demands of larger companies procuring their service. Anticipate any risks by making realistic agreements with the start-ups and being open about areas they might not be confident they can fulfil. “We’d hit them with a 300-page procurement agreement, and expect to go through all the multiple markets in one go. Realistically, someone that’s only given £200m revenue is not going to be able to service 26 countries,” he said.
Be fair about equity
Creating an environment that gives start-ups more control encourages them to come on board. They will be less apprehensive, for example, if they don’t have to offer equity to procurement companies engaging their services. It’s much more comfortable if procurement professionals agree to be rewarded only when they have added value to the start-up.
Bringing stakeholders, suppliers and institutions together will help start-up suppliers communicate much better with corporate decision-makers. This can only help with overall innovation.
Supply Management Forums from CIPS