If you are a user of LinkedIn, or other social media, you’ll be familiar with the ‘inspiring’ quotations or research findings that often get posted.
I bet you’ve seen this one:
“85 per cent of your financial success is due to your ability to communicate, negotiate, and lead. Shockingly, only 15 per cent is due to technical knowledge.” - Carnegie Institute of Technology
Do the percentages check out? Does it convince that the answer to success doesn’t only lie in hard work? Is the source valid?
The answer to all the questions above is yes. Except the quote is from an out of print article published in 1918 for an organisation that no longer exists.
The institute is now part of Carnegie Mellon University in the US, established in 1967. And the research was undertaken with around 100 engineers nearly 100 years ago! And how does the author of the research define “financial success”?
On the face of it, there’s nothing wrong with the quote. It’s just that when I dug a little deeper to better understand the facts, it’s not quite as impressive.
Do you take this approach with your suppliers’ propositions (often referred to as due diligence)?
• If you’re awarding a 10-year contract, have you requested the contractor’s five-year plan?
• If you’re given a lump sum price, have you requested a cost breakdown?
• If you require specific levels of insurance cover, have you requested a copy of the policy and the supplier’s history of claims?
• Are you clear on who owns the intellectual property rights underpinning the vendors offering? Is it you or a third party?
I don’t want to be prescriptive on the actions to take on your due diligence activities. But you want to be able to say you’ve identified your procurement risks and thought about what, potentially, you’re accepting.
Develop an approach to seek evidence to substantiate claims made by your suppliers. Trust and verify.
☛ Stephen Ashcroft is the lead at Procurisk