Hey Procurement Legend, this week’s mental model is Occam’s Razor. It’s a tool that I’ve used too much. I say too much because this tool is particularly useful when you lack data and information. And too often, Procurement teams who are not operating with a digital-first focus lack this (like many of my previous clients).
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I’ve seen too many complex and awful procurement processes and working methods to count. Heck, I’ve seen too many teams with no process or agreed-upon manner of working. This was the norm in my early career, which is why I spent a couple of years working with clients to help them improve upon these areas.
The main reason I’ve seen teams struggle with unwieldy processes or none at all is the same. Complexity.
Whatever way they look at the problem, they see complexity. One easy way for them to lose is due to stakeholder involvement. We’ve all seen it. You’ve got those people who want to be involved in every decision.
I’ve been talking about making Procurement simple for years now. I include this idea in much of my content on LinkedIn because it’s neglected.
And here’s one mental model that will help you achieve simplicity in Procurement: Occam’s Razor.
What is Occam’s Razor?
Occam’s Razor is a principle that suggests when there are multiple explanations for a phenomenon, the simplest explanation is often the correct one. This concept can be helpful in Procurement to avoid unnecessary complexity and streamline processes.
I’m currently (slowly) reading David Deutsch’s The Beginning of Infinity (a most recommended read for you) (As an Amazon Affiliate, I earn a commission when you purchase a product using this link) where he states:
"Also, a common way in which an explanation can be bad is by containing superfluous features or arbitrariness, and sometimes removing those yields a good explanation. This has given rise to a misconception known as ‘Occam’s razor’ (named after the fourteenth-century philosopher William of Occam, but dating back to antiquity), namely that one should always seek the ‘simplest explanation’."
We’ve all seen our fair share of superfluous features and arbitrariness in Procurement.
How Can You Use Occam’s Razor in Procurement?
Visualise a razor blade cutting through ideas.
Or a process.
A process is an easier visualisation. Procurement processes can become long and complex. Certain stakeholders must be involved for specific categories, supplier segmentation types, spend value, etc. Soon enough, your processes look like this.
You may only have a gut feeling for this at this point. You’ve seen some delays at certain points throughout your “process”, so you start chopping at it.
Perhaps that person who says they must review everything before the next task happens doesn’t need to be involved.
Perhaps your questions aren’t getting to the subject matter quickly enough, so these need reworking.
You can use Occam’s Razor to cut the noise out whilst you await any data, such as days spent on this specific workflow phase, to re-design and rework how you’re doing things.
I’d suggest that for any of you not using Procurement Tech, it might be virtually impossible for you to have an accurate reading of where these blockers are. Or where the friction points are because you’ll not be tracking your tasks, which means you won’t have any data.
And data is needed.
Occam’s Razor is the perfect tool for when you don’t have data.
Use it to compare the before and the after. Whichever is the simplest way of working that ensures the results are the same should be your chosen manner of working. Then, add the data points to your theory if you have them.