Ownership is good, right? Sure it is. The more stuff you own, the more wealth you accumulate. Houses and investment portfolios should appreciate (hopefully), and your ownership in those assets makes you a wealthier individual. What about too much ownership? Ever think of that? Columbia law professor Michael Heller has. I recently heard him on American Public Media’s Marketplace talking about his new book, The Gridlock Economy.

The jest of his argument is too much ownership is bad for the economy. As the professor said in the interview, “When too many people own pieces of one thing, no one can use it. Usually, private ownership creates wealth, but too much ownership has the opposite effect; it creates gridlock. If too many owners control a single resource, cooperation breaks down, wealth disappears, everybody loses.” A comical example of this is a 1991 episode of “The Simpsons”, where Bart, Milhouse, and Martin split the cost of a comic book and fight over who gets to keep it, when, and for how long. As a result of their infighting, the comic book gets torn up by the Simpson’s dog and then gets struck by lightning.

Heller goes on to say how this is a dangerous phenomenon because it’s difficult to see. He gave a hypothetical example of a pharmaceutical company who comes up with a better drug to treat Alzheimer’s. However, the company is hampered in the process of creating the drug because they have to license dozens of patents, and any one of those patent holders can hamstring the process. The socially and economically responsible new development is now stuck as a result of ownership gridlock.

Let’s not look at this paradox as strictly commodity-based. What about ownership in corporate initiatives and projects? It applies here as well. We’ve all been told at one point or another to “take ownership” of a project, yet we tend not to look at it the same way as owning a car. Sometimes too many people have ownership of a project or process and, instead of economic gridlock, there’s political and process gridlock. This is something industrial and organizational psychologists try to address when consulting with clients. Streamlining a solid hierarchy within project teams can increase productivity, decrease project completion time, and get more use out of personnel. There is a huge loss of resources if a six month project takes seven months to complete due to too much ownership and the resulting infighting.

Now let’s apply this to your supply chain. Say you buy MRO products from five different suppliers. Those suppliers hold too much ownership in your business. As a result of them sharing your business five ways, your business is less valuable to them, and it creates more process for you for having to deal with multiple sales reps, multiple ordering procedures, multiple invoices, etc. Consolidating so fewer suppliers have ownership in your business benefits everyone by reducing gridlock.

Striving not only to reduce the amount of ownership, but also strengthen it where it should belong, will serve to streamline procurement and executive and administrative processes.
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Jazzy Sourcer

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