Attracting Innovation from Suppliers: The People Motivation Factor
I had planned to write an article next on factors that help companies attract innovation from suppliers. I was ready to describe how intellectual property matters, reputation, transfer of knowledge, trust and fairness can make a company a customer of choice for innovation. This is critical to innovation as it is easier to obtain a good price than to be the first exposed to breakthrough innovation from suppliers.
However, I ended up focusing on only one factor: The motivation of key people on the supplier side. In a nutshell, to be the customer of choice for innovation, the innovation elite from your suppliers need to favour you over other clients. I saw this in action a few months ago when I was working on a research project with one of the leading companies in the field of robotics. I interviewed a young engineer working for one of their suppliers who was very enthusiastic and put all his energy into making the project a success. I asked him why he was so enthusiastic? His answer was “I get to work with the Gods of Robotics”. For him, a simple walk in the corridor, discussing with lead engineers from his client was a very gratifying experience. Listening about past technical wizardry and future ideas was for him the most motivating experience one could have at work. And this is not an exception. I have seen this time and time again. Key people in a company compete to work for a specific client. It can be important for their career; it is also important for their motivation and their personal contentment at work. So being a customer of choice for innovation is a people game.
Now let me introduce a simple framework presented by Lindsay McGregor and Neel Doshi in their book “Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation” (2015) These authors show that motivation comes from three key motives: Purpose, Play & Potential. And motivation generates a higher performance in terms of creativity, innovation and problem-solving capabilities. So, let’s look at each of them individually
Purpose: Purpose is how a person values the outcome and impact of her/his work. We might not enjoy everything we have to do in our daily work, but if we value its outcome and impact, motivation will be on the high. For instance, by inviting key representatives from your suppliers to meet with some of your clients. By showing how their work contributes to make your client or employee satisfied, by showing them how their work helps to deliver your company’s mission and vision, you are contributing to create a sense of achievement and motivation that can help you realise the best from them and secure access to innovation.
Play: Play is about curiosity and experimentation. It’s not about organising funny games and team building activities. The best engineers working for your suppliers often enjoy solving complex technical problems. It makes their work playful, enjoyable and motivating. If the key people working for your suppliers are told how to do things and if they receive as performance report spreadsheets with traffic lights flashing in red, it is unlikely that they’ll come to you with their innovative ideas first. The great thing about play and innovation is that innovation needs play and play brings motivation; so, you can really create a positive virtuous cycle here. If you positively challenge innovation leaders from your suppliers, if you encourage them to experiment, if you organise innovation workshops with them and if you use their input; you will capture both innovation and motivation.
Potential: Potential is about people achieving their personal work aspirations and advancing towards their next career steps. For key people working on the supplier side, it might include providing them with access to industry knowledge, working with a well-established industry player or about giving them visibility within their own company. If many companies have created awards for some of their suppliers, the best performing purchasing organisations pay attention to recognising the key individuals on the supplier side who make a difference. Often, following an award… they deliver more value than ever before.
To conclude, to earn innovation from suppliers we need to motivate their key people; this can be achieved by thinking systematically about Purpose, Play and Potential as motivation factors.
Finally, we also need to remember that motivation and trust can be quickly destroyed:
If we say we have no time to listen to new ideas coming from suppliers,
If we consult them on an interesting project only to get a price benchmark,
If we tell them that five other companies are waiting to do their work,
We put the motivation of their key people at risk. So, it is not about being nice and friendly all the time, but to gain access to more innovation from suppliers we need to be particularly careful about the impact of our own communication and acts.
Hence the EIPM Motto: Values for Value!
EIPM Value Creation Observatory Director