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Watch the webinar here

Hosted by Clive R Heal, the CEO of LavenirAI, alongside Bill Michels, the Chief Commercial Officer of LavenirAI, and Iain Campbell McKenna, Senior Global VP of LavenirAI. We’re also delighted to introduce our special guest, Nicolas Passaquin, the Head of Sourcing & Supply Chain CoE from Telia, who will bring an external perspective on innovation and collaboration.

The session is titled “Unlocking Supplier Innovation in Modern Procurement”, focusing on the strategies, insights, and tools necessary for tapping into the infinite potential of supplier innovation.

Our hosts and special guest will delve into the techniques and tools steering the future of Procurement. Engage in illuminating discussions on the unique synergies between corporations and their suppliers, and unearth ways to foster a culture characterized by mutual growth and innovation

Read the transcript here

00:00:06.430 –> 00:00:17.920
Iain Campbell McKenna: Hi, everybody! Welcome to our very special webinar. I’m delighted to be joined by obviously, first of all, Clive, who is on my and my zummies on my right hand side.

00:00:17.920 –> 00:00:46.390
Iain Campbell McKenna: I’ve got Nicholas Pasquin joining us. Who’s from Tellia, and I’ve got my dear friend Bill on my right hand side, obviously depending on how you’re looking at this from museum. Right? Now, what we’re going to talk about today is supply and innovation in modern procurement. Really important topic. Everybody’s super excited about it. I know Clive could talk for days and days and days about this specific subject. Right?

00:00:46.390 –> 00:00:56.399
Iain Campbell McKenna: But my question really is, Nicholas. You you’ve you know you’ve written about this. You’ve got a book on Amazon about, you know, supply and innovation.

00:00:56.900 –> 00:01:08.629
Iain Campbell McKenna: So if I’m a procurement person, a procurement leader. And I’m wanting to, you know, implement supply and innovation. I want to understand it. I want to get supplies on board on board.

00:01:08.750 –> 00:01:18.159
Iain Campbell McKenna: Can you talk us through. You know what’s what’s the first steps to to getting those suppliers interested and and help us with innovation?

00:01:18.270 –> 00:01:46.900
Nicolas Passaquin: Yeah. And II think you can actually look at it from 2 different angles. I think when you actually think about supply innovation being a procurement leaders, you can think about it as well. I’ve got a procurement team. I want to make them more efficient so they could actually focus working on suppliers. And there’s plenty of innovation and solution that came up in the last 5 years, which are actually helping you to automate, to get better use of data and analytics to announce your skills and expertise. And then you can actually focus on

00:01:47.260 –> 00:02:10.379
Nicolas Passaquin: on your suppliers, on those relationships where you might actually generate innovations. So I think you can look at those 2 angles. And I think we probably talk a little bit more about that second one is how actually you interact with suppliers to actually generate with new growth fix customers, pain points. But I think in your mind as a leaders you shouldn’t forget that. Well, you actually have your own operation as well, and if you don’t want your

00:02:10.380 –> 00:02:23.659
Nicolas Passaquin: procurement managers to spend their time on excite maniping data, you need as well to give them more than 2, and you need to look at innovation. So that’s that’s one aspect. Then the other one. As I said, it’s more about suppliers, and how you actually create

00:02:23.660 –> 00:02:28.570
Nicolas Passaquin: a relationship and a structure where you can actually work with them on innovation.

00:02:29.080 –> 00:02:32.170
And the first things probably would be to look inside.

00:02:32.370 –> 00:02:49.210
Nicolas Passaquin: I think it’s actually great. There’s plenty of things you could work with suppliers. But I think the first thing you probably want to do is actually look what you need for you actually have an internal environment where you have challenges, you have opportunities. You have actually avenue for growth. You might have

00:02:49.210 –> 00:03:04.170
Nicolas Passaquin: data sets that you don’t know what to do about. And I think that’s what you need to understand is actually, what is your landscape? Then, when you can actually, when you actually start to talk externally screwed for innovation, co-create with your suppliers. You actually have no ideas of

00:03:04.580 –> 00:03:22.179
Nicolas Passaquin: whether what they will be proposing. You make sense or not. And actually to start that journey is fundamental to have that. And and it’s not. It seems like it’s a sometimes a word, and then it’s well understood. But it actually needs quite a lot of investment in terms of time and energy. And you need the right procurement people.

00:03:22.210 –> 00:03:44.660
Nicolas Passaquin: And that’s probably to the second thing, actually, not. Everybody would actually be good at scooting for innovation. That’s understanding the business landscape. You actually have skills and expertise. You need to be. You have to align on vision and strategy. You have actually to have that people aspects understood. And we need to have the right people facing internally to understand challenges and externally to work with suppliers.

00:03:44.800 –> 00:04:06.780
Nicolas Passaquin: And then, obviously, there are species. Suppliers is, then how do you interact with them? What framework do you put in place? And that goes from from scrutin to having labs to having giggles through to around that? So there is actually so many things you need to put in place as well in terms of of properties of syncing. And that’s actually those 3 pillars that would really think they are fundamental to put in place first.

00:04:07.290 –> 00:04:32.390
Iain Campbell McKenna: Do you know what’s really interesting? I was, I was reading some research on innovation and apparently sort of 25 to 45% of revenues come from product innovation. And I think it’s about up to 65% of innovations that are sourced externally through partners or suppliers now moving on to Clive. Because I can see you. You know you’re sitting there, and

00:04:32.390 –> 00:04:55.620
Iain Campbell McKenna: you’re dying to talk about that, Clive, because you’ve set up. Innovation centres yourself right at Rosh, I believe, and something you’re incredibly passionate about. Would you like to add anything to that, Clive, when it choosing the right partner. Nicholas raised quite a number of really really powerful points there. And a lot actually. So even the first one about

00:04:55.890 –> 00:05:08.960
Clive R Heal: what really is innovation and supplier innovation. And I think people have different levels of understanding. There, let me give an example. I mean, if you’re if you’re buying a banana right? If you’re buying bananas, if the business say to you, I need a blue banana

00:05:08.970 –> 00:05:33.419
Clive R Heal: for me. That’s so reactive sourcing. And that’s exactly what Nicholas talked about. You’re just going out to find what the business need. Is it innovative? Well, it’s new, but it’s not really innovative. The next level up might be, you know you’re buying bananas, and you see, out out in the market there’s a blue banana set becomes available, and you go back to your business. Say, hey? Do you wanna blue banana right? Can we use them? And that is sort of proactive scouting as well.

00:05:33.420 –> 00:05:39.639
Clive R Heal: But I think that we we need to get a couple of levels up from there. Nicholas really talked about this. So there’s there’s the whole

00:05:39.640 –> 00:06:01.059
Clive R Heal: guided. So guided supplier innovation. So you and your business think, hey, we wanna get a different banana. Let’s go get blue one. And so then you’re out talking to suppliers about, can you do a blue banana? But I think what we really wanna get to. And and Nicolas hitch it on the head is co-creative innovation. So we have a problem. We have only got yellow bananas. What other products can we be buying?

00:06:01.060 –> 00:06:12.919
Clive R Heal: You sit down with selected suppliers and come up with ideas about? Well, let’s have a make. Make blue bananas, or let’s have red bananas. Right? So you’re actually creating something new that didn’t exist before you’re co-creating that

00:06:12.920 –> 00:06:28.850
Clive R Heal: that opportunity for you and for your supplier. And so that that we we need to understand that there are these different levels of innovation. And how do you get to that? What I would call disruptive innovation cause you’re creating something new that doesn’t currently exist. And that is the optimal value opportunity.

00:06:29.390 –> 00:06:45.520
Iain Campbell McKenna: I agree. I think so. If we and this is a question to Bill. If so, if we want to choose a partner. to help us innovate is what sort of due diligence do you think we need to do before we select that partner.

00:06:45.710 –> 00:07:10.540
Bill Michels: Well, II think what what you need to do is, first off, you need to kinda extend, establish really good communications with with the partners that you’re you’re thinking about. Then you’ve got a really kind of set of vision. Here’s what we’re trying to do, or here’s where we’re gonna go and expectations. And then I think internally, you gotta do a lot of work, because internal people sometimes resistant to seeing suppliers command and software

00:07:10.540 –> 00:07:33.579
Bill Michels: the problem. They try and solve the problem. They try and solve the problem and then that. And then eventually, they have. They have to work with a partner. And so it’s getting getting the engagement from internal organization as a communication from the supplier setting the expectation. And in in 1 one thing I was I was working on in a food company was was. We were trying to tamper evidence.

00:07:33.580 –> 00:07:57.679
Bill Michels: and it was on a jar with a cap where you know the vacuum pops up the top, and it’s not tamper evident, because you can go into a store. Take out the jar, throw garbage, you know bad stuff in it and heat it up in a microwave, put top down the vacuum, comes back down. So we found someone who would eventually get. They trusted us. They they did it without patents and working together. They put a coding on on the top of the can, and when the button

00:07:57.680 –> 00:08:06.710
Bill Michels: that said Open alright. But but but we wouldn’t have had that innovation. You hadn’t had communication outlined the goals. They they saw

00:08:07.070 –> 00:08:12.889
Bill Michels: a way of getting in there first. And so then, finally, everybody work together to get that get that achieved.

00:08:13.310 –> 00:08:14.889
Iain Campbell McKenna: So do you think.

00:08:14.960 –> 00:08:27.650
Iain Campbell McKenna: from from a corporate and a cultural fit. How important is that, do you think, in in selecting those suppliers to to help us innovate? Obviously, to to yourself, Nicholas?

00:08:28.540 –> 00:09:01.289
Nicolas Passaquin: Yeah, II think it’s gonna go back to what Kelly said. I think, no matter who you are, most of the smartest people in the world work for someone else. So you need that ecosystem or suppliers, but you should under estimate as well some of the challenges there. Ii like the example of very much, actually. And I think it’s actually a very telling story. But then these as well, a lot of things that company will come up with, and that you need to navigate. To be able to create, that internal structure can capture innovation. People will come with legal and compliance. Consideration with Zoom. Tutorial property

00:09:01.290 –> 00:09:19.860
is with confidential information and tried secrets that you need to protect. So there is so many things that actually are gonna be obstacle to innovation, obstacle to collaboration, that what I found actually relatively efficient is generally actually to have those innovation forums setup. You actually need to get out of

00:09:19.860 –> 00:09:38.009
Nicolas Passaquin: being a procurement team and being active in innovation team. And then actually, you are the one work gonna focus on that. It’s your objective. And then you actually go and find the alternative to the banana as a next revenue generating banana streams or whatever. And I think that’s actually one of the thing that companies struggle to do quite often.

00:09:38.260 –> 00:09:48.069
Nicolas Passaquin: You are actually so busy in construction, in operation efficiency day to day that if you actually try to do innovation with your existing team. It’s gonna be very hard to succeed.

00:09:48.070 –> 00:10:11.930
Nicolas Passaquin: because yes, you have passionate people. But then, if they are Daisina out, just focusing on putting contracts and negotiating, they will not be able actually to be focusing on those thing that actually gonna make a difference in revenue growth and efficiency. I think I like the idea of having a dedicated team that’s actually focused on to suppliers innovation. And then that’s their task.

00:10:13.040 –> 00:10:26.369
Iain Campbell McKenna: And when we so say, for example, where we’re in that selection process, do you? Where do you think the sound financial health lies within?

00:10:26.370 –> 00:10:46.910
Iain Campbell McKenna: They supply health and their capabilities so ensure, if we want to ensure sort of long term viability and innovation partners. For example, we need to be looking at their short term and long term financial health, and obviously be looking at the risk side of things as well. Right? So looking at risk assessment.

00:10:46.970 –> 00:10:57.190
Iain Campbell McKenna: And do they have the value creation potential? Do they have the evidence that you know they are innovative. Do they have the right team together?

00:10:57.490 –> 00:11:20.579
Iain Campbell McKenna: And I think it’s also important to to choose a partner that has got that high value creation, potential right? Whether that’s in a a form of unique manufacturing procedures, processes, efficiency, strong innovation, pipeline or or some sort of rich innovation. History right? But

00:11:21.990 –> 00:11:37.930
Iain Campbell McKenna: I think that also plays an important part in that evaluation process when we’re picking those innovation partners, Bill, what’s your thoughts on this? Do you think that’s a valuable point, or would you disagree?

00:11:38.070 –> 00:12:03.059
Bill Michels: Well, I think it’s a valuable point. But what what I see from a lot of procurement groups is they ask for innovation. So I’ve seen them ask suppliers for innovation and then have innovation fares. And then when they get 2 or 300 ideas. They don’t know how to handle them, so they don’t know how to prioritize them. They don’t have the organization resources behind them to actually make this work. So I think there’s a lot of work that has to be done

00:12:03.060 –> 00:12:19.100
Bill Michels: internally, to be sure that you can take those ideas. So if you have 200 ideas, and you never get back to a supplier. G, who’s giving you a great idea? That’s not so good, and then you gotta have a reward or recognition for those suppliers that actually do give you the innovation, it’s gotta be some kind of benefit for them.

00:12:19.560 –> 00:12:33.890
Iain Campbell McKenna: Yeah, that’s a good point. And and when we think now, this is something like this, it will really hit home for you, because it’s a subject you talk about quite a lot. And obviously, I’m quite passionate about it as well is.

00:12:33.950 –> 00:12:47.929
Iain Campbell McKenna: what about skills? So if we look at skill sets that we need from our suppliers, you know, it’s really important that that we evaluate these. We have a deeper understanding, because

00:12:48.210 –> 00:12:51.449
Iain Campbell McKenna: we need to understand how flexible are they

00:12:51.510 –> 00:13:07.499
Iain Campbell McKenna: to change. If we change your strategy because strategies ever changing. Right? So how do we evaluate these really important skills of their suppliers to ensure that they can actually work with us in supplier innovation. Clive.

00:13:08.750 –> 00:13:14.760
Clive R Heal: Disruptive innovation is a partnership relationship. Right? You? It’s it’s not about every

00:13:14.770 –> 00:13:37.010
Clive R Heal: all 5,000 10,000 suppliers. It’s about picking the partners that you really want to work with right? And so what are the criteria for that? And then how do you assess that a a number of things really come to mind in terms of like. Is this an innovative company, as you mentioned? Have they demonstrated innovation in in the past? Do we trust this this company? And do we actually like to do

00:13:37.010 –> 00:13:55.539
Clive R Heal: business with them? Do we see them being a long term partner over the next 2 or 3 years? Because, you know, innovation partnership is not a one week process or a one time meeting. And you and you’re done right. It’s an ongoing relationship, you know. Are they the best company out there in terms of for this particular spend category that we really wanna

00:13:55.540 –> 00:14:07.039
Clive R Heal: wanna partner with go going, going, going forwards? And can we create the the trust through the customer intimacy that we’re willing to share data with them that is not in the public domain, and that, you know, they share data.

00:14:07.040 –> 00:14:35.900
Clive R Heal: they share data back with us. And you know, are they a sound organization? The other thing, I would say, is, does innovation leadership in that sector move quickly, because if it does, you know, it moves very quickly. There’s no point partnering with somebody now, cause they may not be the innovation leader 6 months from now. So it’s like, you gotta pick a a, a, an area where innovation leadership is probably gonna be around with that with that organization for a while and find that there was the financial stability of that company. I think it’s important in terms of the human aspect, though

00:14:36.020 –> 00:14:47.290
Clive R Heal: you know, innovation. Really disruptive innovation is about building those relationships with that partner. This is not supplier. It’s building relationships with that partner in a trusted way

00:14:47.290 –> 00:15:12.129
Clive R Heal: through mutual value creation looking at opportunities that are gonna bring value to your organization. But the suppliers gonna get something out of it as well. So you know, it’s a it’s a win, win, if you like, in terms of that mutual value, opportunity, and then are they willing to invest time and money and resources with us to co-create something new that, you know, is new, and we might get it first, but they can sell it to everybody else. We might get royalties from it. We might get it cost price, and everybody

00:15:12.130 –> 00:15:19.520
Clive R Heal: else pays the the market price. What’s how do we? How do we share that value that comes out of that innovation.

00:15:19.800 –> 00:15:26.650
Nicolas Passaquin: So like, that’s a really important point. But if we rewind right to the beginning.

00:15:26.780 –> 00:15:36.990
Iain Campbell McKenna: so we want to start up some sort of Innovation Center or get our suppliers to be innovative and to to buy into the journey right?

00:15:38.020 –> 00:15:39.180
Iain Campbell McKenna: How?

00:15:39.570 –> 00:15:46.979
Iain Campbell McKenna: If we look at the initial relationship between our suppliers. And this is to Nicholas and to Bell.

00:15:47.830 –> 00:15:54.249
Iain Campbell McKenna: If we look at the initial relationship and we go on playing hardball.

00:15:54.380 –> 00:15:57.560
Iain Campbell McKenna: we are hyper focused on the price

00:15:57.820 –> 00:16:02.330
Iain Campbell McKenna: and note the value. Do you think there’s any hope

00:16:02.710 –> 00:16:05.409
Iain Campbell McKenna: for supply and innovation? If

00:16:05.680 –> 00:16:12.520
Iain Campbell McKenna: that initial contract and that initial relationship has started off and am kind of rocky.

00:16:12.730 –> 00:16:35.940
Iain Campbell McKenna: rocky Royd Nicholas, what do you think? The answer is? Almost in the question, but not entirely. I think days always up. Sometime you actually start on the relationship because you actually need the product. And the price is actually a driver. And then you actually need to get that level of efficiency or price to get actually the necessary margin to run your business. And that’s perfectly fine.

00:16:35.990 –> 00:16:40.480
Nicolas Passaquin: But I think at the same time, it’s actually difficult to build the relationship on

00:16:40.490 –> 00:17:02.820
Nicolas Passaquin: win lose relationship. So you need as well to be able to change that and involve the relationship to something which is being more constrictive, and how you can co-create something if you actually stand at the level where the price is, gonna be the conversation and the availability. And that’s gonna be quite difficult actually to just move up to something that will be generating innovation.

00:17:02.820 –> 00:17:31.879
Nicolas Passaquin: But I think, as I said, II just want to come back to something you’ve said. And and I was listening. I come from a different industry. I come from a world where daytime content is actually one of our first products. So we don’t we? I never. I’ve not been working for a long time in industry or manufacturing or so we don’t set product reset services. And you talked about financial stability or on partnership and all that, all those actually, the most successful innovation

00:17:32.120 –> 00:17:58.910
Nicolas Passaquin: is basically with relatively small company start ups group that probably had no chance to survive past 3 years if they were not receiving any funding. So actually, our wrangle was more like creativity and what they could do actually with our data and content. How can they actually generate innovation, innovation or create revenue growth for the use of our data and content generate new revenue stream. So what I just wanted to say with that is, I think there is a very

00:17:58.930 –> 00:18:08.689
Nicolas Passaquin: important industry elements into all of those conversations, whether you actually are in babyhood, of asthma’s or you are actually like.

00:18:08.720 –> 00:18:28.639
Nicolas Passaquin: I was with Tom’s content, driven environment. It’s actually a very different type of innovation and relationship you’d be setting up now, coming back to your question. I think it’s actually exactly the same paradigm is actually, you need a constructive relationship, and the one which is win lose is probably not gonna be the best relationship to create innovation

00:18:29.270 –> 00:18:44.540
Iain Campbell McKenna: to you, Bill, what’s your thoughts on this. I mean, if, as I said to Nicholas, you come into the negotiations, say your tier one suppliers, and you do command hardball. And you say, look, this is about price. But then, later, down the road.

00:18:44.960 –> 00:19:09.150
Iain Campbell McKenna: you’re thinking about innovation. What hope have you got to build those relationships and and try and sort of get that spark going internally for fun. Innovation. Do you think it’s possible or we don’t use? I’ll use an example of of my experience in consulting. So in the automotive industry where I had, you know, a major Japanese

00:19:09.270 –> 00:19:22.490
manufacturer, and then I do us domestics us domestics where I want money, one price decrease. Give me 5% a year. Give me 5% this year. Give me 10% next year. And then I went to the Japanese manufacturer who was like.

00:19:22.490 –> 00:19:47.110
Bill Michels: let’s work together. Let’s target cost the price. Let’s look at and let’s look at how can we make this better? How can we achieve our goals. A great example is when Ford had its problem with the explorer, and it was the tires that’s big blow up with Firestone. That was great. We had the same thing with Toyota and the gas pedal supplier, but you would never know who the gas pedal supplier is, because they work in in partnership?

00:19:47.220 –> 00:20:10.409
Bill Michels: So so I think you know, who Ca, who do you think I was? Gonna write a book one time saying the best, the the the the best, the best customers get the best ideas. So if you’re gonna go in and get beat up by the automotive, what the domestic automotive manufacturers, or you’re gonna take your innovation to a a a Japanese manufacturer who’s gonna be part of it, help you grow it.

00:20:10.490 –> 00:20:18.250
Bill Michels: put it in, get it started. Which one are you gonna go to? You want the best ideas are, gonna go to the most collaborative companies.

00:20:18.930 –> 00:20:33.419
Iain Campbell McKenna: Do you think that’s when we are actually the whole entire book process when we’re thinking about innovation. Do you think that’s something that we should automatically be thinking when we select, for example, our tier one suppliers, Clive.

00:20:34.290 –> 00:20:59.070
Clive R Heal: Well, I actually think that a true innovation partner should be considered very much as just part of your business. It’s just another department that you happen to work with. Another. What? Another part of your business. So how do you? How do you get the relationship to that level where you can actually share information. You trust each other, you know, so that. And they become just an a, an extension of your and of your of your organization. So

00:20:59.170 –> 00:21:16.000
Clive R Heal: it it’s it’s about identifying. Well, let’s take a step back. You have to look at where is the best opportunity for innovation? Right in procurement. We have limited resources, right? We can’t innovate everything. We can’t innovate that innovate, that innovate, that you can’t do that right. You have to think of innovation

00:21:16.000 –> 00:21:39.250
Clive R Heal: as like a, you know. Maybe a a gun might be the wrong word, but you know a, a, some, a tool with 6 bullets in it right? And where are you gonna fire those bullets to work is the biggest opportunity to get value for your for your business. Right? Yeah, we could do this, but it might only save us a little bit, or we could do that. Yeah. But the potential is huge. So you really need to be thinking about. Okay, where am I gonna go for it to get the innovation?

00:21:39.250 –> 00:22:02.369
Clive R Heal: And then who are the partners? Maybe that can support that. So and that is a discussion with the, with really understanding with the business in terms of really understand. What do the business want? What are the biggest business needs? And then let’s go after it. Because when you wanna drive innovation, it’s this is Maslow’s hierarchy of needs, right? The very bottom one is, you know, like food, water, shelf, whatever warmth, right whatever. So

00:22:02.380 –> 00:22:28.429
Clive R Heal: the bottom of Maslow for a business is, what are the big business needs that we need to address right now, we gotta sort out this production problem. We gotta get the time of this process down from 90 days to 2 days, right? So it’s picking the the what’s at the bottom of Maslow. So what are the real business needs? And those are the ones you wanna go for first for innovation, right? There’s no point bringing them a shiny new bicycle. If they’re starving, they need food right?

00:22:28.430 –> 00:22:32.790
So don’t bring them the bicycle yet. So, in other words, target your innovation

00:22:32.790 –> 00:22:49.369
Clive R Heal: where the business have the business need biggest need, because business innovation, you know, business needs trump new innovative value. Right? In other words, you know, if you’re helping the business sort out a business issue. They’ll pull you in to help with the innovation. Right? They’ll they’ll want it because it it solves a problem.

00:22:50.060 –> 00:23:04.130
But, Ian, you you mentioned you mentioned, though? Talking about skill sets of supplier. What are the skill sets of the procurement team? And and what do you think are the the things that? How? How do you select the the person that’s gonna go get the innovation?

00:23:04.880 –> 00:23:10.190
Iain Campbell McKenna: It’s a really really good question I. So I personally think it’s all about.

00:23:10.690 –> 00:23:12.170
Iain Campbell McKenna: you know, mindset

00:23:12.460 –> 00:23:27.939
Iain Campbell McKenna: and creative thinking, blue sky thinking. A lot of innovation doesn’t happen when we think it does. You know, a lot of the best ideas come from outside of the work environment. So I think we need to create an environment

00:23:27.940 –> 00:23:39.729
Iain Campbell McKenna: for to enthuse people to think like this. I remember Clive was telling me a really interesting story about. They used to change the lighting and the rooms

00:23:39.730 –> 00:24:05.459
Iain Campbell McKenna: to reflect people’s moods, and to really kind of try and get them to think a certain way and trying to encourage certain emotions. So I think from an innovative mindset. We have to be creative thinkers. We need to have a certain learning, agility, and learning. Agility is a really important.

00:24:05.490 –> 00:24:33.710
Iain Campbell McKenna: really important behaviour of us as human beings and learning agility. If we measure it actually measures someone’s future success. So I think we need to actually do some sort of research into who are these people looking at, you know, getting someone to come in and do assessments on a, you know, behaviour’s cognitive abilities or learning agility? How creative are we as an individual.

00:24:34.140 –> 00:24:37.259
Iain Campbell McKenna: because there’s no point in making an on-the-spot decision.

00:24:37.330 –> 00:24:49.880
Iain Campbell McKenna: We have to actually put some signs behind it, and then we can cherry, pick our team to say, Well, look, I’ve got a pretty amazing team. But until we actually do that due diligence, it’s

00:24:49.950 –> 00:24:53.960
Iain Campbell McKenna: everything’s based on assumption. Right? But

00:24:54.340 –> 00:24:57.739
Iain Campbell McKenna: I think it’s also really important as well.

00:24:57.880 –> 00:25:17.229
Iain Campbell McKenna: How do we sell it to the stakeholders? You know, the behaviors are super important, but we need to get buy in right? And that’s kind of my question to to Nicholas. How? Where do we even start? How do we get that buy in from a stakeholders? If innovation’s pretty much nonexistent.

00:25:17.770 –> 00:25:37.640
Nicolas Passaquin: And and I think actually, you said one white point earlier is like, well, you need to have the fundamental in place you can’t start talking about the innovation. If you don’t have actually a matrices organization, I think that’s probably one of the first things that you need to think about. You will never be able to open that door if you actually don’t get those things right first

00:25:37.740 –> 00:25:44.570
in your own fucking organization. But as well, company might be facing as well some challenges that are actually surprise-related that you need to fix.

00:25:44.570 –> 00:26:07.949
Nicolas Passaquin: That’s that’s a fundamental. Before you go to the next stage. Then, after that, I think it’s a lot about what is the what’s the business case? What’s unique for them? Basically, the company will actually face certain situations. And then you need to be able to develop a procurement innovation strategy that will relate to that is what problems are you gonna address? How are you gonna help me growing their business. How can you actually solve some of those challenges?

00:26:07.950 –> 00:26:30.560
Nicolas Passaquin: And I think that’s really that it’s it’s what you need for them. Basically, if they want. Well, all of the procurement people, let me take that back. Most of the procurement people would actually like to work on innovation, because that’s fun. That’s actually interesting. There’s plenty of things to learn. But then it needs to have a purpose as well. You need to be able to relate that, and to be able to sell that internally, so to create as well that

00:26:30.620 –> 00:26:55.200
Nicolas Passaquin: visibility around what you need for them is is important. I would really start by that. Say, well, you need to support us going to look for innovation, because for your business it may A, B and C, so you need as well that touch of pragmaticism and that touch of common sense into well, why are you gonna involve time and resources into looking in those direction? And you need to be able to translate that into something that’s meaningful for your organization.

00:26:56.080 –> 00:27:03.080
Iain Campbell McKenna: Now, I think that’s a really valid point and and slightly diversing on to environment.

00:27:03.220 –> 00:27:09.400
Iain Campbell McKenna: Clive, this is something that you and I talked about. How important is the environment

00:27:09.420 –> 00:27:18.910
Iain Campbell McKenna: to encourage people to think innovative. How do we encourage creative thinking. How do we encourage people to

00:27:18.970 –> 00:27:26.400
Iain Campbell McKenna: put themselves into that mindset? Now, I know you’ve you’ve done a lot of work in this environment. Can you share that with us.

00:27:26.540 –> 00:27:27.630
Clive R Heal: Yeah, you need.

00:27:27.780 –> 00:27:47.530
Clive R Heal: Okay, you gotta. Okay. Let’s take a step back. First of all, you have. You have to have an innovation process. It doesn’t matter what it is. It can be Disney ideal design thing. It doesn’t really matter. I don’t think as well, but you have to have a process that that people follow. And Nicholas mentioned. It’s worth having a few people who actually manage that process. You know part of your procurement. Excellence group, and so on.

00:27:47.750 –> 00:28:07.350
Clive R Heal: So when you think about the different stages of the process, and and both guys mentioned it earlier as well. Obviously, somewhere in the process. There’s ideation, creation. And then you’ve got to go through your evaluate your planning and your challenging and your evaluation. And ultimately you’ve got to create a business case that has to be sold is sold to the sold to the business right?

00:28:07.590 –> 00:28:17.879
Clive R Heal: The the ideation part is actually fairly straightforward. If you can create, bring together. You know, you’re co-creating your ideas. You’re bringing together people from the business.

00:28:17.880 –> 00:28:45.219
Clive R Heal: Yeah? And creativity flourishes at the interface of diversity and experience meaning get some different people from your business in from different roles, you know, rookies, people who really understand it, some engineers whatever. But also you gotta bring in the the suppliers, people as well to co-create that, that that those ideas you’re you’re looking for, the ideation to generate, maybe 150 ideas in, and which you can then evaluate, take forward and ultimately create a business case that you sell.

00:28:45.360 –> 00:29:13.820
Clive R Heal: The ideation is actually fairly straightforward. If you can create an emotive challenge that people actually really interested in sorting. Right? Well, we need to come up with a new way of doing this. We need to come up with a better way of doing this. And and if you think about the you know the the, maybe there’s 6 or 7 different value types. You know, you can be looking for cost savings, headcount reduction, risk, speed time. It could be customer service or or revenue growth. Right? So you’re looking at the 6 main quality baby as well. But you’re looking at the 6 main

00:29:13.820 –> 00:29:23.749
Clive R Heal: main ones. So how do you create an environment where people feel open to be able to create ideas generate ideas without criticism. So that’s that’s the first thing right?

00:29:23.750 –> 00:29:47.460
Clive R Heal: People have to be able to put forward an idea that is not gonna get shot down their peers where their managers aren’t. Gonna say, that’s a crap idea, Clive. It will never work right. You have to be able to create those ideas, and and they’re out there because you want a, you want a diversity of ideas. You want different people coming up with a different different ideas. All ideas are great ideas in the right situation. Right? So how do you create the environment where people can can ideate and come up.

00:29:47.460 –> 00:29:50.979
Clive R Heal: come up with those ideas right. And what we found is that

00:29:50.980 –> 00:30:20.199
Clive R Heal: people are more creative when they’re when they’re cooler. So you want the temperature in the room down a bit. You don’t want it cold. You don’t want it hot. They’re more creative when they’re cooler. There’s certainly more creative when there’s a blue environment because of the dopamine production cells in your eyes react to a certain like blue sky. Right? Why? Why are people happy in blue sky? Because it’s creating the dopamine right? And dopamine is a is one of the one of the molecules we’re trying to create in the brain to help people be more creative. People are more creative when they feel safe and secure, right? Physically like.

00:30:20.200 –> 00:30:27.610
Clive R Heal: And nobody’s gonna come in. A tiger is not gonna walk in also from a commercial perspective. My manager is not gonna shoot me for coming up with this.

00:30:27.610 –> 00:30:49.570
Clive R Heal: With this, with this great idea, people are more creative when they’re relaxed and kicking back, you know. Not not so sat there around the table, but they’re on the beanbags when having fun, right? So if you’ll throw a few things around the room or whatever. And so they, they’re having a fun environment. So you can change the emotional configuration of the innovation space, the ideation space to help people be more more creative.

00:30:49.570 –> 00:30:58.589
Clive R Heal: But I think the biggest thing comes down to a give them a challenge to solve through the innovation that they can is they can really an emotive challenge they can really

00:30:58.590 –> 00:31:26.739
Clive R Heal: support like, how can we help patients do this? Or how can we help our customers do this? Or how can we solve this big problem? Right? Because people, actually, everybody is, can be creative, some people more than others in terms of the ideas, but but give them something that they can really lock into. Like, I wanna solve this problem. I wanted to create this idea, both both your people and the suppliers together, because that is the emotional hook that helps trigger that creativity from the subconscious.

00:31:27.090 –> 00:31:41.050
Iain Campbell McKenna: That’s really interesting. And there’s a lot of things. I’m sure everybody’s learned about the colors and dopamine production. I think I personally think that’s really fascinating. A really important point that you touched on

00:31:41.050 –> 00:32:01.950
Iain Campbell McKenna: Clive was the diversity aspect of innovation, and to having an innovative team is about having a diverse team. Nicholas. Obviously, you and I have talked about Diversity to blowing the face. Pardon the pond, you know. Maybe that’s why the dopamine came right. But

00:32:02.110 –> 00:32:13.530
Iain Campbell McKenna: what’s your thoughts on that in in a creative environment? Do you think diversity is imperative to to have a creative team. Or do you think that’s just a

00:32:13.570 –> 00:32:35.220
Nicolas Passaquin: can I hear? Say, no, II think definitely, that’s something which is important. If you actually have only well clone. You are actually gonna have exactly the same kind of thinking, the same ideas. I think you definitely need to assemble diversity. And I think, the most successful team I’ve seen our activity team that come from different backgrounds to age industries. And then

00:32:35.220 –> 00:33:02.409
Nicolas Passaquin: that’s where as well, the challenge is. Then you have to have the platform to make them work together. And I think what Clive said is actually really important is that you need that comfort to be able to partner all together and to actually share your ideas. So the more diverse, sometimes the more difficult it actually to create that comfortable environment. But I think if you can actually succeed in bringing diversity, and then met putting them in situations where you, they will be able to generate everything that comes through their mind.

00:33:02.500 –> 00:33:19.610
Nicolas Passaquin: Actually, I think you probably got the perfect mix now comes as well the difficult part, and I think we talked a little bit about that it’s like. Well, then, you might end up with 200 ideas, and then well, you need as well to have a way to to filter, to channel and to come up with the 5 things you want to focus on.

00:33:19.610 –> 00:33:33.399
Nicolas Passaquin: And and one of the challenges I’ve seen is actually well, from those 200 ideas. You actually had the hard time selecting you end up with 20, and you can’t manage 20. And you actually dilute your efforts. And you do you go nowhere? You actually not achieving anything.

00:33:33.400 –> 00:33:50.280
Nicolas Passaquin: And actually, that’s one step in the process. I think that’s ideation is is extremely important. But the following up as well is, how do you get? And how do you feel to select? And then how? Where are you gonna focus in developing those actually 5, you can really be focusing your time on is is a critical step in the process

00:33:50.750 –> 00:34:15.099
Bill Michels: moving on to you, Bill. sorry I don’t. I don’t want. I don’t. Wanna you think that we’ve forgotten about you? I wanna say, Nic, Nicholas makes a really good point. But one of the points is that when you get, let’s say you get 300 ideas from suppliers, and you pick 20. It’s really the obligation of the sourcing person to go back and tell the other

00:34:15.100 –> 00:34:40.070
Bill Michels: 200 why they why you’re not gonna take their idea, because the worst thing you do is ask for ideas and do nothing with them when they give them to you and their valuable ideas. I think I think one of the things we’re not talking about and should, is what’s the culture of the business. What’s the what’s the senior leadership like? So I mean, I’ve seen so many times where you’re trying to drive innovation. You go out to a research group or an engineering group. And they say we don’t have resources.

00:34:40.070 –> 00:35:03.080
Bill Michels: We don’t have the money. We’re not gonna fund this, and that’s supported by the top especially, and and very tactical. low margin businesses. So you’re not gonna see that. So I think when you’re joining an organization, you really have to think about. What’s the culture? What’s the culture toward innovation? How open is if you’ve got a multi 1 billion dollar pharmaceutical company that builds the real.

00:35:03.080 –> 00:35:27.969
Bill Michels: and ships for 17 years on the on a patent. You got that opportunity to work with a company that’s got innovation. You’re dealing with a food manufacturer doesn’t change and only makes 3% or 5% on on the business. It’s all about. Get more, get more, get get a cheaper, get a cheaper find in another place. So I think, what’s the culture? What’s the organization like? Are they willing to put research, you know? Dollars into funding innovation cause if they don’t fund.

00:35:27.970 –> 00:35:43.750
Bill Michels: you go nowhere. I mean you gotta you. You run into a brick wall where you’ve got cross functional groups that say, don’t have resources, don’t have the time we have these priorities. That’s not a priority. And so I mean, I think that that’s part of what we haven’t talked about, but something that’s a reality.

00:35:43.940 –> 00:35:48.810
Clive R Heal: So II wouldn’t pick up on that bill that th th, that’s what we’re talking about before.

00:35:49.010 –> 00:36:10.539
Clive R Heal: Focus your innovation on a business need, because, you know, it’s it’s is a is it a? You know, it’s the burning platform for the business, right? We have to sort this problem out. And if you can go in and deliver us innovative solution to solve that business problem, it it’s a lot easier than to sh to sell the shiny new toys. Bring them the new bike, you know, in a month’s time or 6 months time. Right?

00:36:10.640 –> 00:36:14.209
Iain Campbell McKenna: That’s that’s that. That’s a really valid point. So

00:36:14.440 –> 00:36:35.989
Iain Campbell McKenna: I’m really conscious that, you know, we have to open the floor to a couple of questions, guys. So, Nicholas, if you, if you you take home of the information you’d like to share with our listeners to day. What would you say? The 3 to 4 most important things that you need to consider when you’re going through this process.

00:36:36.760 –> 00:36:58.000
Nicolas Passaquin: have. The fundamental in place is pre the first one. You need to have a performing procurement team. Don’t start by innovation. I’m gonna go back to where skills and expertise you actually need to have. And you’ve described that really, well, yeah, nothing you need to like to do the right people working on innovation. And and that dedicated team that actually gonna be working on that

00:36:58.100 –> 00:37:13.039
Nicolas Passaquin: the the sort of partnership with your suppliers, and how you actually create the right environment. And these are, let’s call that the preferred customers to your suppliers. I think, Billy, you mentioned that I think it’s it’s critical for me as well.

00:37:13.820 –> 00:37:16.990
And then, I think at the end as well, the sort of

00:37:17.910 –> 00:37:20.490
Nicolas Passaquin: relationship built on

00:37:21.020 –> 00:37:45.230
Nicolas Passaquin: generating ideas, to selecting those ideas to coming back when they are not as successful, to follow a gupin few one that you can really deliver on. I think that’s more of a process question, maybe. But I think that’s actually something you really need to think about into how you organize and structure that. So that that’s probably the things I would really want to mention.

00:37:45.430 –> 00:37:52.830
Iain Campbell McKenna: Thank you very much, Nicholas. I think you’re right on point now. Clive, is there anything you’d like to add to that.

00:37:53.190 –> 00:38:05.379
Clive R Heal: Yeah, I’d agree with Nicholas. You gotta have the process defined and the and the people behind it. I think you’ve gotta be looking for mutual value creation opportunities with your with your partners, you you gotta be

00:38:05.500 –> 00:38:15.820
Clive R Heal: thinking about. Where do we really want to focus our innovation activity. You can’t innovate everything right? You could try. You could always make a better pen or a better banana, maybe, but

00:38:15.820 –> 00:38:40.540
Clive R Heal: but but like what is important to the business, and where? And Nicholas mentioned earlier at the start as well, you can innovate within procurement as well. Right? And then that’s that’s an important point as much as you can innovate with suppliers you can look at, you know, how do we change the contracting process? Right? What new technology do we bring in to change the way that we work to make ourselves more efficient. And maybe that’s the that’s the initial step. Let’s do some innovation in our own function first, before we

00:38:40.550 –> 00:38:55.320
Clive R Heal: start engaging with suppliers and and and business issues as well. And then the other thing I would say is, you’ve got to. Obviously, you got to solve the IP problem sometimes. But you’ve got to have a way of measuring innovative value because

00:38:55.390 –> 00:39:04.819
Clive R Heal: a lot of innovation is not about cost savings. It’s about other value types. And how are you going to measure that? Because that’s going to go in your business case? And that’s what’s going to get recorded.

00:39:05.790 –> 00:39:32.910
Bill Michels: Bill, would you like it to add anything to them? Right? And I agree with both both Clive and Nicholas? And I think you have to have the right mindset. I think you have to have people with emotional intelligence that can build relationships. You have to have trust, I think trust is one of the critical things, because if the supplier doesn’t trust you, or if you if you’ve been untrustworthy in the past, you’re not, gonna you’re not gonna get very far, and innovation with a supplier that doesn’t trust you. And I think you need to have a clear vision.

00:39:32.910 –> 00:39:40.269
Bill Michels: Everybody has to be aligned on that vision. And II think you need a top management support

00:39:40.450 –> 00:39:46.489
Bill Michels: alright without top management support. It doesn’t even get out of the out of the gate, even even if it’s solving a per problem.

00:39:47.510 –> 00:39:52.940
Iain Campbell McKenna: I agree. I think you know what I would add to that would be hand. Pick your team.

00:39:53.040 –> 00:40:11.119
Iain Campbell McKenna: make sure that there’s a cultural fit for your suppliers, but make sure that you hand, pick your team and you do that. Due diligence. Don’t just think with your gut, you know. Actually do your homework. Make sure that you’ve got the right team a diverse team.

00:40:11.120 –> 00:40:32.200
Iain Campbell McKenna: and I think that will really paved the way for innovation. Now we’ve got 5 min left, and I think we should use this for for some questions. So I’d like to open up to the listeners out there. Is there any questions that you would like to add, or any points that you feel that we haven’t raised today?

00:40:36.270 –> 00:40:42.279
Iain Campbell McKenna: And I’m not entirely sure where these questions come from, ie. Where they are on my

00:40:42.510 –> 00:41:06.430
Clive R Heal: Just while you’re waiting for any questions to come in, I think I think there’s a quite a range of skills involved in innovation. Obviously, there’s there’s are you creative to help the ideation? Are you analytical as as Nicholas mentioned to evaluate all those ideas? Have you got some financial ability to be able to create the the business case? And have you got the relationships with the people internally to be able to to sell that the whole program.

00:41:06.430 –> 00:41:13.009
Clive R Heal: But sell those business cases, because, you know, you can have a great innovation program. But if that business case doesn’t get approved

00:41:13.140 –> 00:41:41.810
Clive R Heal: is no value, there is no value. Innovation is about creating value. It’s not about coming up with a whole list of ideas that you could do. It’s about implementing those ideas and getting the value for the business and for the supplier. I agree. And you know, I think it’s a really valid point as well to mention the company culture as well, because there has to be that balance, isn’t there, between our company and our supplier, and there has to be that sort of mutual sort of connection, right?

00:41:41.810 –> 00:41:51.100
Iain Campbell McKenna: Otherwise, I think, you know, by setting myself up for a fall. Really anything else you’d like to add. Nicholas Bell.

00:41:51.260 –> 00:42:16.250
Bill Michels: Well, ha, ha! I mean one of the other things you have to get out of the way is the sacred cows. You know, the people that are just hanging onto something because maybe they invented it. Or maybe it was their process, or or maybe they have a relationship with certain suppliers. So I think that that can be an obstacle to innovation. And you as a leader of an innovative process, you really have to get the teams on board. Get the teams align, get the teams focused on

00:42:16.250 –> 00:42:24.460
their objectives, get the data that you need, and then, once you have all those things. You’re gonna be able to have a successful project that drives you to the next level.

00:42:24.960 –> 00:42:25.940
Iain Campbell McKenna: Nicholas.

00:42:26.110 –> 00:42:50.680
Nicolas Passaquin: Yeah, no, II think it’s actually an important point, I think. Think about Commodore Polaroid, all those company that I’ve actually went big sacred cows, and they never really went out. And they actually where they almost disappeared or their business actually change fundamentally. And they actually missed innovation because they were so happy generating revenue from areas. They thought that they were never gonna get challenges is actually important.

00:42:50.680 –> 00:43:16.610
Nicolas Passaquin: Now, now, the other thing II just want to add is sometime when we think about innovation, we we have people that think, yeah, let’s let’s go off and run around. And I think innovation is actually need a structure need a process need to get organized. And that’s not the fun part. But I think you actually need that you you can’t actually be at less chickens. Otherwise you’re not gonna realize the business case, you’re gonna select the right idea. So it’s actually takes a lot of effort to structure it.

00:43:17.190 –> 00:43:31.539
Iain Campbell McKenna: That is very true. You know, you have to put the hard work in. And yes, it’s not the fun part doing the strategy, putting the process in place. The outcome is incredibly exciting.

00:43:31.540 –> 00:43:40.670
Iain Campbell McKenna: but the hard work needs to go into into the back end right? Developing that strategy. And that process before we get to any of the good stuff. Right?

00:43:40.670 –> 00:44:03.859
Clive R Heal: It’s a huge, untapped opportunity. I really think that procurement of really yet to really grasp supplier innovation and the opportunities to create new value with suppliers. I it’s not fully there yet, and it’s it’s a it’s an untapped opportunity. II once did some analysis. Ian, looking at the top 20 suppliers with their with their annual reports to look at what’s their R&D spend

00:44:03.890 –> 00:44:28.039
Iain Campbell McKenna: and our top 20 suppliers. We’re spending over a hundred 1 million dollars a year on RD. And I was thinking, Wow, if we could get 1% of that focused on yeah, what we need for our business that will be so powerful is. It’s an asset that’s set out there that you gotta tie into. Well, anyway, we could talk about this for a very, very long time, but unfortunately, I I’m saddened to say we’ve ran at a time. So

00:44:28.040 –> 00:44:48.009
Iain Campbell McKenna: first of all, I’d really like to say a big, warm, warm welcome, and thank you to Nicholas for being on the show today. It’s been an absolute pleasure. And clearly, guys, you know, it’s always great to have you on the show as well, and I hope everybody has a wonderful day and a productive week.

00:44:48.030 –> 00:44:49.619
Iain Campbell McKenna: Thank you for joining us.

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