Effectiveness is not a requirement that is peculiar to Procurement. Rather, it is central to success in any realm of life. The fundamental concept of doing the right things to achieve the outcomes we want remains the same, even when those outcomes are results as complex as outsourcing a key business process or building a successful Procurement function.
The challenge often comes because we get muddled in our thinking, not helped by the societal or environmental factors that confront us daily, whether in our private lives or in our organizational existence.
Economic activity and most organizational endeavours are measured by numbers—gross domestic product (GDP), unemployment, sales revenue, profit margins, ROI, cost savings, and so on. So it is understandable that most of us end up viewing our activities at work and measuring “success” by numbers.
Typically, these numbers are direct or indirect measures of efficiency—how much output we achieve for our input efforts.
But efficiency measures never tell us whether the outputs we achieve, or are pursuing, are the right ones. Efficiency just tells us how slick we are at getting the outputs. Effectiveness, on the other hand, forces us to consider what we really want in the first place.
Read the full adapted excerpt from Procurement Mojo® in Supply Business magazine here.
