Why Maverick Buying should be labelled as Compliance Risk to truly reflect the potential costs to organisations, and why only a Business Network can eliminate this type of risk.
Latest news from Hollywood is that in the endless re-hashing of “franchises”, a successor of Top Gun is slated to appear within 12 months or so. This will involve Tom Cruise reprising his role as Pete Mitchell, aka Maverick.
Here in the procurement world we have been using the term maverick buying since the days of Top Gun (1986). It is generally used pejoratively: people who are maverick buyers are to be stopped at all costs and re-routed on to preferred contracts with preferred suppliers. Procurement departments look to clamp down on maverick buying and this forms part of their DNA.
However, I’ve always been uneasy about this. I always imagined a maverick as someone who doesn’t let needless rules stop them from doing their job. In American culture, the maverick is idolised, not vilified. The “Ask for forgiveness, not permission” gene runs deep. Think of James Bond, Han Solo and of course the eponymous hero of Top Gun who bested Viper, Cougar Jester and the Iceman.
So having procurement folks banging on about eliminating “maverick buying” is counter-productive; everyone likes a maverick. I can’t help thinking that in the film, if Maverick had the nickname “Compliance Risk” stencilled on the side of his F-14 Tomcat, then he wouldn’t have got the girl
So in the procurement world, I’ve stopped using “maverick” with its heroic undertones and started using the phrase “compliance risk“. That suddenly doesn’t sound so heroic, and it speaks to the fact that procurement folks no longer are obsessed about savings, they have upped their game and are concerned about Business Risk. It’s not the small amount of money wasted by those maverick buyers, who purchase through un-approved channels, that worries CPOs, it is the fact that they can introduce significant risk into the business. No CPO gets fired for missing a savings target, but discovering that an employee just utilised a firm which was found out to be using child labour, conflict minerals or with a reckless safety record: you could be in serious trouble.
The game has changed, and the expectation is that procurement teams can monitor risk at all levels in their supply chain. By definition this is Network Intelligence, and you need a rich Business Network deeply integrated into your procurement activities. A Business Network can monitor and warn you of Reputational Risk as in the examples above, making sure that you and your suppliers are not trading with companies which have poor business practices such as environmental policies, human rights, intellectual property piracy, bribery etc.
If your only goal for your procurement policies and systems is to stop the Maverick, then you are probably need to adjust your radar.
For more information about how Ariba can use its Business Network to manage your suppliers and eliminate risk visit Ariba Supplier Management solution page.