Paul Walker and Sarah Coulter presented on behalf of the Clorox Global Strategic Sourcing (GSS) Organization at the 99th annual ISM conference in Las Vegas about innovation in sourcing practices. Clorox has developed a unique approach to growing the business through innovative partnerships and has learned a few things along the way. These learnings were shared at the ISM conference last week, and there were four key messages I took away from the presentation that led to the success of this initiative.
#1: If you can’t outspend them, outthink them.
Clorox wanted to grow, but as the company looked at its competitors, Clorox realized it would be impossible to outspend them on R&D and other common areas companies look when they want to grow the business. Instead of giving up, Clorox decided to think outside the box and make innovative partnerships a key aspect to this growth initiative. Because partnering could amplify Clorox’s reach and gain scale, the new partnership could likely provide the results Clorox needed.
#2: Picking a Partner: Scout, Select, Source, Manage
Partnering for innovation is a tricky process. A strong partnership involves a lot of trust, transparency, and communication, and a deep understanding of the strategy for the product itself. Clorox’s process of scouting out partners, down-selecting, negotiating deals with those partners, and managing the ongoing relationships was managed by the same person in R&D. As Clorox continued refining the process, the company realized it was essential to split out the sourcing piece, and this created a need for the innovation sourcing management team.
#3: Become an Embedded Resource
The negotiation process itself requires a specific set of skills to produce an ideal win-win situation, especially in the case of an innovative partnership. The GSS Organization accomplishes this win-win through participating in the R&D Organization as an embedded resource. This allows an immediate, direct line of communication between the internal team to make quick, informed decisions to ensure the best partnership deals are successful.
#4: Desire, Decide, Delight
My personal favorite piece of wisdom came from the overall strategy of the organization: desire, decide, delight. Clorox’s primary focus is creating products that delight its customers, and the R&D Organization succeeds in discovering and filling gaps in products that can increase customers’ delight. The GSS Organization then works as an internal partner to support these initiatives by facilitating the connection between Clorox and its innovative partnerships in order to create a win-win situation for everyone. In my mind, this is the definition of true strategic sourcing.
What tips do you have for bridging the innovation gap? Comment below or tweet us your ideas @iasta.