Scepticism is a procurement virtue

We all hold up Harvard, home of the HBR, as having a reliable voice worth listening to. That's where Michael Porter's 5 Forces, value chain and so much of procurement's basic academic theory derives from.  Yet we have now discovered that two of its esteemed professors, who influenced UK austerity strategy, got it wrong in their research. Fortunatelty one of student, Thomas Herndon, a PhD candidate (pictured), had the sense to question their data.

There is a not insignificant problem though in that the Chancellor may relied on Reinhart and Rogoff's flawed evidence which told him what he wanted to hear about austerity strategy, even though it has now been proved wrong.  But Osborne is not alone in being gullible.

We have also learnt that a key influencer in childcare policy was feted yet without much testing of his credentials.

Then we have the health nightmare unfolding in Wales as a result of the nonsense propagated by the now discredited Dr Andrew Wakefield over the dangers of MMR vaccinations. Many of the population, including the Lancet proved gullible.

That's not to mention the £50m spent on fake bomb detectors.

Is there not something which suggests that when you get someone who is coming up with a 'flat earth theory' you maybe should test a bit more, after all is that not what the scientific method is all about. The   student who have the bravery and tenacity to challenge the findings of the two Harvard professors was not welcomed with open arms but has been proved right.

As procurement professionals perhaps we also need to be bravery, more tenacious and sceptical.

Two examples of what I mean in terms of procurement: I recently critiqued a bid and found 25 assumptions stated by the bidder - when the buying organisation were challenged on the assumptions I found that raised a hare in terms of readiness to accept the bid without being contractually open to additional costs and risks. Secondly, some 20 years ago, I was asked to review a recommendation for a tender award a few hours before it was to be recommended to councillors for acceptance. I received many cynical looks when I strayed beyond my 'look at the process' remit and revealed that the 'numbers just didn't add up'. Of course the "specialist consultants couldn't be wrong" - well actually, sorry, they were wrong.

We should use the low risk option of questioning validity in procurement more often - all we need is to be more sceptical and recognise that scepticism can really add value.

So, why is it so difficult to be a sceptic? Isn't scepticism a procurement virtue?  

Defining the scope for conflicts of interest in CCGs

It was only on the 15 March, discussing the potential Clinical Commissioning Groups' conflicts of interest, I said "what we don't know is how big a scandal some of those involved in CCGs could be walking into out of ignorance". Today's Sunday Times, 'naming and shaming' provides some indication that it will be a big scandal.

While "NHS England is creating guidance which outlines how conflicts of interest can be avoided and mitigated in the reformed health service" media attention and public scepticism just won't wait and have already jumped to conclusions.

I suspect a level of naivety in the NHS and CCG on procurement decision making and when those with a potential conflict of interest should absent themselves from the decision making process.

In commissioning the potential to exercise 'undue influence' is long before the decision of who should be awarded the contract and indeed long after. For example, the opportunity to influence for personal gain can be exerted:

1. In completing a strategic needs analysis and identifying which services would help match the needs of the area;
2. In prioritisation of the identified needs;
3. In determining the budget allocated to specific needs;
4. In determining the make/buy decision;
5. In determining the level of competition required;
6. In determining the potential for collaborative commissioning partners;
7. In determining whether the identified needs should be expressed as outcomes or narrowly defined inputs/outputs;
8. In agreeing the risk allocation;
9. In agreeing exit clauses;
10. In agreeing the bundling of contracts;

Snake oil procurement

Tonight the so called 'Devils Advocate starts a 14 year jail sentence. His sentence is poetic justice for a lawyer with no legal qualifications not registered to practice,  yet gained notoriety and £1m from representing those who could never win within a justice system. Isn't there something quite remarkable about this modern day snake oil salesman who received good money on a 'no expectation of win basis'. Added to his real CV are now fraud, deception, money laundering and forgery. Would you buy advice from such a person?

Of course we have already discussed fake lawyers, this is not a one-off, and ironically we have even come across a coroner who turned out to be unqualified to practice.

Although it was before I stared this blog, there was also a wonderful example of an unqualified surgeon. You are also no doubt familiar with the great fraudster, Frank Abagnale Jnr, portrayed in 'Catch me if you can', who now works for the FBI. and perhaps that other compulsive fraudster Steven Jay Russell made famous in 'I love you Phillip Morris'.

Interestingly, it can also be implied from this week's evidence to the Public Administration Select Committee, that those leading procurement reform in the UK have no way of knowing who in central government procurement is actually a 'fraudster' unqualified to practice!

But today's message is simple, how can you meet the challenge and avoid the risk of being gullible enough to be taken in by a procurement snake oil consultant selling aspirations which cannot be delivered and is more qualified in non-delivery than the profession?  This is all the more relevant given that many of those who make such appointments just wouldn't recognise 'the real thing' and are buying the promise.

Is this the way to procurement credibility?

I recently discussed the issue of credibility and why I think that it is core to procurement effectiveness. You need only to have been dipping into the news over the last few weeks, and as recently as today, to have seen many examples of where credibility has been lost - quite simply we 'smell a rat'.  However, all has led me to think more on credibility. I threatened to return to the discussion and how you might gain the 'X Factor' of credibility. So here goes.

It does strike me that you gain credibility - it is something you need but is sadly not something you can do a great deal to protect against theft. It is earned but can easily be taken away as a result of others. It is earned but can be thrown a way in an instant.

So, how do I think you could gain the 'X Factor' of credibility:

1. Relentlessly deliver against the '5 Rights';
2. Be hoenst about reporting performance;
3. Drop any reliance on qualifications - your credibility comes from delivery not bits of paper;
4. Avoid being associated with the role of 'policing' the procedures; 
5. Know your subject, your toolkit, and which is the right tool for the job;
6. Simplify as opposed to complicate;

Unhealthy diagnosis for NHS commissioning reform

The NHS chief publicly begs for his job arguing that he didn't make any mistakes but has learnt from his mistakes. Then, because he made a promise to lead the NHS reforms two years ago he justifies that he should be allowed to stay, whether or not he was paid to be personally accountable for needless deaths and misery. It is also clear that there has been no succession planning - quite simply, he implies, with the Prime Minister's endorsement, there is no one else in the whole world would could oversee the NHS reforms.

As if we were in any doubt about Nicholson's view of the world, the efficiency element of the reforms is named the Nicholson Challenge. Not that I would want to cast doubt on the effectiveness of the man's leadership, but it appears even the delivery of Nicholson Challenge is challenged.

So just as we learn that there is an indispensable man leading the NHS reforms, and recognising that the efficiency strand delivery is questionable, and with less than four weeks to go before the new commissioning regime kicks in, we also learn that the commissioning rules need to be rewritten.  After all this time discussing the commissioning reforms is it really conceivable that a sprint rewrite will be a good job.

We have one person at the top of the pile with a history of losing focus (his own admission) and new commissioners who now discover the rules are being rewritten.

So all the ducks seem lined up for an almighty mess. Change management case study ready and waiting - pity we all look set to suffer. I wonder is anyone identified as personally accountable?

Are you ready for Procurement Visibility: ProcureTruths

I wonder how many of you have come across Glassdoor; a website where potential employees can identify a particular organisation, the typical salaries paid to their varying levels of staff, what questions were asked in interviews, others experience of the recruitment process and what those who were successful in the selection process subsequently thought about working for the organisation. Some really interesting insights and all free of charge.

It came as quite a surprise to someone who recently wanted to discuss a 'compelling opportunity' with me, when I explained that the comments on Glassdoor made it clear to me there was little value in progressing the discussion.

I can see how Glassdoor could be used as part of procurement research in providing useful insights on bidding firms. Of course as Peter Smith rightly implies have we information overload?

However, visualise a similar service for the supply market, let's call it, 'ProcureTruths'. Perhaps ProcureTruths already exists unbeknown to me (please enlighten me if you know of it?).

Nevertheless, let's visualise that ProcureTruths, provides potential suppliers with information on specific buying organisations, say:

1. Key decision makers in the procurement process;
2. Procurements influence over spend;
3. Typical questions asked during the procurement process; 
4. Organisational tendency to maverick spend;
5. Buyers qualifications and currency of training;
6. Understanding and application of procurement best practice; 

What happens when you ask 1 Knight, 2 Professors, 1 Dr and 1 CEO a simple question on procurement?

Today brought, as I understand it, the final oral evidence session of the Public Administration Select Committee Inquiry into procurement. That's three sessions of oral evidence and heaven only knows how many words of written evidence. I have already discussed the Inquiry and the need for caution in taking opinions.

Now I am wondering what on earth the Select Committee are to make of the evidence taken.

Today's evidence was generally focussed on the complexities of Defence Procurement and the answers came from a Knight (KCB), two Professors, a PhD and a CEO. You would have expected differing views, but I would have expected them to have been able to answer simple questions, for example:

1. Define Value for Money? and,
2. Explain what reverse auctions are, how they work, and what are the benefits?

Alas that proved too difficult for the 'distinguished panel' and the Select Committee are left scratching their heads.

Some wonderfully digressing opinions into the world of 'SMEs don't get a bad deal in public procurement', defence contractors don't gain from the business of war, the UK strategy for supporting the over throw of Gadaffi, indecisiveness of whether UK Defence Procurement is/is not world class, 'we don't have a defence manufacturing strategy - oh yes we do', etc..  But a strange thing seemed to happen - some nonsense was being talked but the 'distinguished panel' appeared unable to pluck up the courage to challenge the nonsense.  Instead the 'distinguished panel' opted to exchange polite smiles - I suppose that's what happens when you've a Knight, two Profs, a Dr and a CEO behind one table!

Having said that, Professor Christopher Bovis of University of Hull absolutely shone and was able to succinctly articulate a 'can do' approach within the law, and there were other useful nuggets particularly around GOCO.  Other than that, opinions and a lack of critical evaluation.

Yes, what on earth will the PASC make of that evidence? Thankfully the PASC seemed to be well informed and knew their subject.

PS If you do choose to view the evidence watch out for some great examples of physical behaviour to avoid when a camera is on you which are too bad good to share!

Osborne lessons in procurement performance management

Before:

“To bring some accountability to economic policy, I have set out eight benchmarks for the next Parliament against which you will be able to judge whether a Conservative Government is delivering on this new economic model... So we will maintain Britain’s AAA credit rating.”

After:

"[... maintaining Britain's AAA is] not the be-all and end-all"

Inappropriate lessons:

1. Agreeing in advance what it is absolutely paramount for procurement to deliver isn't that important - just say what you think is politically acceptable and re-write, with the benefit of hindsight, if you completely miss the #1 priority;  
2. Do not use measurable KPIs as there is too much clarity if your strategy doesn't work;
3. There's always the hope that food supply chain debacles or political scandals will act as a distraction.

Appropriate lessons:

1. Plans don't always go as well as you hope;
2. Regularly review your strategy for appropriateness - agree a change of KPIs before it's too late to gain ownership;
3. Hubris, stubbornness and blind optimism do not deliver long term benefits. 

Procurement lessons from the Vicky Pryce trial?

There once was a TV programme called 'Give us a clue' - in the light of the Vicky Pryce Trial there may be potential for a new docudrama called 'We haven't got a clue'.

Yet, let's face it, who in the world would ever have guessed that a trial about speeding points could have raked up so much venom in what might now be viewed as a 'problem family'. What's that they say about fury and a woman scorned?

But aside from the evidence extracted by the lawyers, there's another story based on the ability of laymen and women to make a good judgement. It appears the jury wanted to do a good job but for some reason the ability to do so eluded them. What's more, the jury's inability eluded the judge.

So when the jury passed the judge ten questions which they wanted guidance on, he voiced the view that the jury "had a fundamental deficit in understanding". He arrived at that conclusion because the jury were asking questions, which, in his mind, some had already been answered and others irrelevant. Now we have learnt that two thirds of juries may be as 'clueless' and lack understanding of the advice judges provide. Does that justify ripping up a centuries old legal system and one which has been able to cope with jurors who couldn't even read and write?

Isn't there something in our system about 'beyond reasonable doubt'? I quite like the idea that if I was on trial and the jury were in doubt, the defendant gets the benefit of the doubt. But equally, if I was the victim, I quite like the idea that they would give me the benefit of the doubt - but that's not what our justice system is about!

Which is better? That a jury ask questions over and over and over again until they can understand the answers, or the jury just say, "to pot with this, the trial is only about penalty points, let's toss a coin".

But aside from that, if a questioner doesn't understand the answer, is it the questioner's fault or the fault of person who gives the answer which wasn't clear enough?

One thing I learnt from my PhD is that not asking, what appear to be, stupid questions, is stupid. Sometimes questioning the edifices on which so much of received wisdom is a good thing. If that were not the case how on earth did we ever manage to progress from mud huts to wifi?

But I have also dealt with many senior decision makers who are being presented with increasingly detailed technical information on which to make procurement decisions. Heaven help us if, out of frustration they start tossing coins because, we as procurement technical experts just can't convey in clear understandable language what we're talking about.

So the next time you are tempted to say "these people just don't get it", think about the Vicky Pryce trial and ask who's fault is that?

The value of blogging and academic writing

So much has changed in the few years it has taken us to become familiar with social media. For example, I can:

• have a thought cross my mind, write a blog about it, get a picture to accompany it from the web, and publish within minutes;
• learn from Google Analytics if anyone reads the blog and puzzle why something, which I think is important, has so few views; 
• tweet a link to the blog and let people know the blog has been posted;
• post the blog as an update on LinkedIn and signpost to it, aswell as gain feedback;
• learn if anyone thinks the blog has any value through retweets, blog, and LinkedIn comments;
• post slides relating to the blog on Slideshare and see if anyone views or downloads.

Now if I had tried to explain to my grandmother, who used to shout at the TV when 'Dixon of Dock Green' was on, thinking she was helping them find the criminal, that she would be able to use #tags to converse with TV programmes, I can only guess what her reaction may have been.

Yet, sometimes I can see similarities between my grandmother's 'converstations' with the television and the value of academic writing. I will return to the similarity later.

When I write a blog, as I have illustrated above, there is ideally something akin to a conversation taking place. I'm engaged in a conversation with you, and you can give me a response which indicates, in some way, how you feel about what I have just said.

If the blog stimulates you to think about an issue which you may not otherwise have done, to me, it has some value. Better still, if you find the lessons learnt, which I frequently suggest, of use, it has some value. But the blog is, more often than not, 'my opinion' and I have previously highlighted opinions may not be worth the value we give to them.

Now it is slightly different with academic writing.

Credibility and procurement

I recently had the good fortune to attend a lecture by the Swedish Finance Minister, Anders Borg, at the LSE - you can access the transcript of his speech here. Perhaps you managed to catch him being interviewed on Newsnight. His ear-ring and pony-tail are not what you expect from a successful politician and economist - appearances are one thing.

Borg impressed. He spoke with authority, was charismatic and above all was credible. Indeed 'credibility' could have been the theme of his speech as it seemed to be weaved throughout his message. For example, the need for the market to view the national economic strategy as credible.

Credibility is central to anyone paying attention to you, your opinions and your plans. Lose credibility and you are in a very precarious place. One of the reasons I am sceptical about some of what I hear is the absence of credibility, for example, the sprochling* for a cause of the recent horse meat debacle. Nevertheless, think of the last time a supplier made a promise to you, let you down, then again, and then the defaulting supplier said: "we've it sorted, trust me".

The CPO needs credibility too. Those who engage, both internally and externally, with CPOs need to be convinced that the sustainable procurement policy will make a difference, the new procurement strategy will make a difference, the sourcing plans will make a difference, the new eProcurement solution will make a difference - I'm sure you recognise it. The CPO needs to be credible if they are to bring about change and bring key stakeholders with them.

It's time for procurement policy outcome evaluations

I'm sure many of you followed the discussion on the evidence given by Colin Cram and Jon Hughes to the Public Administration Select Committee. We had a good critique, over a few Spendmatters' Blogs and the readers associated comments, then we had Colin's pieces in Public Leaders and Supply Management once again with associated comments. We need more discussion on how procurement is approached and more debate. But yet I feel there was a fundamental weakness in the whole discussion - it lacked any rigour and solid evidence.

There is an additional weakness though in relying on the wisdom of procurement's eminence grise to provide the right answers - while those in the procurement world can debate good practice, their wisdom is cloaked, in spite of the obvious disagreements, in 'the narrowness of the same school'. By way of contrast, we know that the Prime Minister takes advice from the philosopher Nassim Taleb. It is interesting when reading Chapter 12 of Taleb's 'Antifragile' that, had the philosopher been asked to comment on the best structural model for procurement delivery he could have been expected to have given a different view. Just to be clear, what I am saying is that, even though there is disagreement amongst some of the more influential procurement commentators, if we want to identify what is best, sometimes it is worth considering the views of those outside our world.      

One way of opening up to others views is through the use of social media. But as we make greater use of social media, and blogs in particular, for sharing thoughts on how to improve procurement we need to be cautious of taking opinions too seriously, regardless of the deference due, in the absence of evidence. I was surprised to discover that The Times differentiates between 'opinion' and 'reporting' through the use of ragged edges - we don't see that differentiation in most blogs. Opinions have a tendency to swing like pendulums. One day a particular view is fashionable and the next it's not.

A useful illustration of the need to be wary of opinions was provided in the second session of oral evidence provided to the same PASC. There we had the unexpected luxury of one of the witnesses, Kevin Craven (Chair of the CBI procurement sub-committee of the CBI PSSB, in answer to Question 55) stating "Generally the MoJ is seen as doing good work in the procurement area", yet on that very same day, MoJ procurement was being described as 'shambolic' by MPs in the same building - need I say more!

The situation isn't helped by