Easy Answers R Us?

About the time Pearl Jam's Vitalogy was rocking my world, my first boss in consulting was telling me there were two things I should never be afraid of telling my client. The first was "I don't know" and the second was "It depends". When Mike gifted me this sage advice I could never have guessed how frequently these mini-mantras would be tripping off my tongue in the years ahead.

Most recently a company asked me to box up and tie a ribbon around the question of which spend categories are being outsourced today. It's a fair question, right? After all, if I could tell them the answer they could start outsourcing those very categories first thing on Monday morning couldn't they? Unfortunately I had to play party pooper, press the play button on "It Depends" and experience the palpable feeling of disappointment and frustration as eyes rolled upwards and exasperated sighs coursed through the conference room.

Why "It Depends" in this case? Well, I agree there are certainly some broad criteria regarding outsourcing decision making like whether or not a category is core to the business and whether or not an external provider can provide ready access to superior domain expertise or buying leverage. The complexity is that the answers to these questions tend to be very specific to a company's unique situation meaning that one generic sound bite of an answer is not available without understanding more about the company's procurement environment. Like what is your spend by category? Where are your pockets of sourcing excellence? Where are your gaps? For example, a VP of Indirect Procurement told me recently how he had hired a Director of Strategic Sourcing who had previously worked as a benefits consultant. This proved of high value when it came to sourcing health benefits, even though the new Director's responsibilities included a broad range of indirect categories. Would this VP have gone out to hire a full-time commodity manager to source only benefits? Unlikely. Would he have outsourced? More likely in this case. The correct decision for this VP really did depend on the unique skill set available in his current team, not on some industry trend or best practice.

So the next time you're called on to provide the easy answer for a grail-seeking customer in a data-poor setting take a deep breath and make absolutely sure you have all the needed facts at hand. If not, then it must be "It Depends". You might not make friends at that moment for sure. But in the long run you're more likely to earn an invitation to return at a later date and find the answers they really need.