The UK appears to be in meltdown. The Prime Minister has resigned primarily as a result of not being able to bring the UK, as a whole, with him on the Referendum. Now the Conservative Party are engaged in their own nomination process for a leader, to not only replace Cameron, but also to lead negotiations which will bring about an exit (perhaps) from the EU and at the same time unify a very divided country.
Meanwhile in the Brexit fallout, the Labour Party Leader, Jeremy Corbyn, is at odds with his fellow MPs - his Shadow Cabinet have resigned en masse and he faces a vote of no-confidence today which is likely to force a Labour leadership election. Corbyn has stated his intention to be a contender in that election, and, it may well be that the Labour party electorate will return him in spite of the Parliamentary Party.
So between the Conservative and Labour party disarray we can expect a leadership vacuum for the foreseeable future.
At times like these one may have hoped for some sort of solace in the European Football Championships. Anyone watching English fans leave the stadium last night, the forlorn look of the players at the end of the match and listening to the dissection of the game by the commentators would be forgiven for thinking how can it get worse. The team manager Roy Hodgson promptly resigned. I wouldn't know if Roy Hodgson had been a good leader or not - it seems hard to question his credentials in reaching the pinnacle of his profession.
The last week clearly has lessons to be learnt on leadership. But then again I had previously discussed some lessons on procurement leadership resulting from the Harmeston (ex-Coop CPO) case.
One thought in my mind is that leaders do not always have to win to be viewed as successful. Take, for example, the experience of both Northern Ireland and the Republic of Ireland football teams in the Euros, both of whom exited the Euros at the same stage as England. Yet, Northern Ireland and Republic of Ireland fans are in triumphant mood, proud of their achievements. There's is a celebration of leadership. Those leaders instilled a belief of what 'could be' achieved as a opposed to 'would be' - they didn't over promise, exaggerate or understate the scale of the task ahead. Yet they brought people with them - it strikes me that today's leaders, whether in politics, football, or procurement success can only be measured by their ability to win the confidence of those being led and trust that they can deliver the vision.
Showing posts with label stakeholder management. Show all posts
Showing posts with label stakeholder management. Show all posts
Tuesday, 28 June 2016
Friday, 25 March 2016
Tales of the unexpected, Harmeston & procurement leadership lessons
However, after a remarkably short stay, say ten weeks, Harmeston and the Co-op parted company. Harmeston decided to pursue a claim of £5.2m for unfair dismissal (I've no idea how that figure was calculated and some would say it was an unachievable negotiating position). Whether intended or not, Harmeston brought the spotlight on herself through the decision to go to the tribunal. You can read the Co-operatives version of the Tribunal here. Now after almost two months of waiting for an answer, it is reported she has failed in her claim against the Co-op for unfair dismissal.
I am not competent to comment on the legal aspects, and feel a slight discomfort intruding on private grief, but I can have an opinion on some of the alleged practice reported in press - let's remember this blogpost is based on reported evidence and some of the evidence was contested. Much of evidence struck me as irrelevant to the unfair dismissal case but relevant to the profession and those who would hope to bring about procurement change - it's those areas I discuss below.
We are told Harmeston believed she had uncovered a lack of procurement policy compliance; 70% of the budget. Understanding the extent of non-complaint spend is certainly a good starting position for improvement - understanding 'why' and what to do about it would be an even better position. The CEO though claimed the issues raised by Kath were already known about and Kath had previously been briefed on them. It is always dangerous to claim the glory for uncovering something when others say you didn't - that applies just as much to claiming savings in isolation of the budget-holder's contribution.
Nevertheless, when the Co-op's head of group risk probed Kath, he concluded that the CPO didn't know the details of the procurement policy. Now given that she was only in post ten weeks, it could be argued that was understandable. What strikes me as unacceptable though was his assertion:
Policy process and governance she defaulted to [her deputy] because she felt it was beneath her.Anyway, that was made worse by, Paula Keegan, the former group chief strategy officer's opinion that Harmeston knowingly chose to break the Co-op's procurement policy herself.
I cannot think of any situation when procurement governance should not be a primary concern when seeking to bring about procurement change, indeed even setting the example of compliance.
Perhaps you can already sense the loneliness of the CPO's journey. To me, when you want to bring about procurement change you also need a coalition of allies - the CEO, head of group risk and group chief strategy officer would be useful allies but Kath failed to gain their ownership.
Nevertheless,
Wednesday, 2 March 2016
Lessons for procurement change from the Common Agricultural Policy Delivery Programme
The Public Accounts Committee has just released its report on The Common Agriculture Policy Delivery Programme which could be the basis of an episode of 'The Thick of It' on change management. Indeed The Times uses the wonderful headline: "Civil servants' row with Mr Fancy Pants costs millions".
The report is short so you can quickly read it but some salient points are:
Are there any lessons for those seeking to bring about procurement change/improvement, yes, don't make the same mistakes!
The report is short so you can quickly read it but some salient points are:
- If you want a programme to be delivered successfully you need clarity, consistency and ownership of vision. Those supposedly driving this programme had competing objectives which hampered progress.
- Make sure those bringing about the change and the leadership of the organisation to be changed can work together.
- Make sure the organisation is ready for the change. It appears the department concerned were neither ready nor adequately supported in the change.
- Make sure the approach is pragmatic. A digital solution was being pursued even though the users lacked the skills and even the required broadband coverage.
- Sometimes you need to go native. In this case the mistake was as basic as the change agent turning up in a very formalised setting dressed as if they could have been going to a beach party - the old saying 'clothes maketh the man' may sound trite but sometimes an unnecessary explicit culture clash can be perceived as arrogance and work against success.
Are there any lessons for those seeking to bring about procurement change/improvement, yes, don't make the same mistakes!
Monday, 16 November 2015
Lessons on the cost of musical chairs at Westminster
Tucked away, understandably, in The Sunday Times was news that "MPs squander £140m on empty office" and typical finger-pointing that "a bunch of muppets" had been involved in this procurement decision!
The story in itself is easily summarised: a lease for 15 years (up until 2029 with no break clause), costing approximately £6m per year, has been taken out on a new office block on Victoria Street, less than half a mile from the Palace of Westminster, while renovations take place at the Palace of Westminster. The plan had been that the new office would accommodate parliamentary staff currently housed in Millbank, and MPs would move to the former parliamentary staff offices at Millbank. Yet, a year later the offices remain empty and costs of £4m are being incurred for rates and services, allegedly because of fears MPs travelling from Millbank to vote in the House of Commons could be vulnerable to attack.
(There is no mention of what the decanting costs associated with the musical chairs would have been or why the MPs couldn't move to the new Victoria Street office as opposed to Millbank!)
Now part of the solution appears to be that Department of Health staff move to the new offices, presumably so that the MPs can move to the DoH current HQ. I assume there has been some risk assessment that suggests the journey up Whitehall is safer that the the journey along Victoria Street.
I certainly recognise, particularly in the light of the barbaric attacks last Friday in Paris, that there is a risk to MPs safety, but is it not true that MPs always have to travel to and from the Palace of Westminster, and also that they spend a lot of time in their constituencies 'out and about', so why is this particular journey so risky and ultimately costly?
There are some interesting questions which procurement could answer, for example:
The story in itself is easily summarised: a lease for 15 years (up until 2029 with no break clause), costing approximately £6m per year, has been taken out on a new office block on Victoria Street, less than half a mile from the Palace of Westminster, while renovations take place at the Palace of Westminster. The plan had been that the new office would accommodate parliamentary staff currently housed in Millbank, and MPs would move to the former parliamentary staff offices at Millbank. Yet, a year later the offices remain empty and costs of £4m are being incurred for rates and services, allegedly because of fears MPs travelling from Millbank to vote in the House of Commons could be vulnerable to attack.
(There is no mention of what the decanting costs associated with the musical chairs would have been or why the MPs couldn't move to the new Victoria Street office as opposed to Millbank!)
Now part of the solution appears to be that Department of Health staff move to the new offices, presumably so that the MPs can move to the DoH current HQ. I assume there has been some risk assessment that suggests the journey up Whitehall is safer that the the journey along Victoria Street.
I certainly recognise, particularly in the light of the barbaric attacks last Friday in Paris, that there is a risk to MPs safety, but is it not true that MPs always have to travel to and from the Palace of Westminster, and also that they spend a lot of time in their constituencies 'out and about', so why is this particular journey so risky and ultimately costly?
There are some interesting questions which procurement could answer, for example:
- Why was the contract signed and long before the MPs had agreed to move?
- Why is there no 'break clause'?
- What was the business justification for securing the new office accommodation so early?
- Was there a risk assessment which recognised and mitigated against MPs reluctance to move to Millbank?
- Is the contract for the Palace of Westminster renovations already signed and does that contract anticipate a completion date of 2029, allowing for the further decant of MPs back from their temporary locations?
- Is it reasonable to assume that a completion date of 2029 represents good practice - it seems a very long contract for renovations?
- What contract management arrangements and contingencies will be put in place for the required complete date?
- Prior to signing the lease, were all the relevant stakeholders consulted, including those responsible for MPs security?
- If effective stakeholder consultation took place, are "the muppets" not those who said the MPs journey from Millbank carried a manageable level of risk?
- Had the Finance Committee, some of whom now find the contract "completely outrageous", had any scrutiny of the proposals before they were committed to?
The whole thing looks like a remarkable mess, yes, but perhaps it serves as a cautionary example of why procurement needs to be involved in this type of decision, and that a full options appraisal is required and risk assessment, prior to signing a contract.
Sunday, 23 August 2015
Weathering the storm of justifying the need to buy at all
We are told the BBC are progressing through a tender process which means they will break their 93 year relationship with the Met Office since the Met Office haven't got through to the final stages. Already the advocates of a continuing BBC/Met relationship have started to cry this is bad value - the UK weather just can't be understood by 'foreign forecasters'!
It seems strange that critics of the likley procurement outcome refuse to recognise that if weather forecasting is a science, then suitably qualified forecasters, regardless of their origin, should be able to predict objectively.
I can only assume that the BBC have been following a robust, transparent and objective process. Have the Met Office been complacent in their bidding or are there genuinely better qualified competitors? If they want to throw stones at the BBC's procurement process would the critics not have been better to have criticised the selection process prior to its commencement. Perhaps the BBC should have carried out some stakeholder engagement in the process earlier and brought the advocates to the status quo with them.
Having said that, it seems logical that the Met Office would want the freedom to compete to deliver weather forecasts to other boardcasters too, without being subjected to nationalistic loyalty. Why can't the defenders of the status quo recognise that for the Met Office to do that there has to be open competition.
However, my question is not about whether or not the weather forecast should be provided by the Met Office or not. Nor is my question about the selection and award criteria. or indeed its robustness.
To me there is a much more basic question, specifically the need for the BBC to spend money on providing a weather forecast at all. A lot has changed in 93 years. There are now so many sources of weather forecast open to the public, for example, apps on a smart phone tailored to specific locations. Just because there has been a 93 year history of the BBC providing weather forecasts doesn't justify a further 93 years of need to for the BBC to provide weather forecasts! But isn't that a common problem is procurement; a contract is due to expire so we need to relet. Wouldn't procurement improve its contribution and value by asking the much more relevant question: "Do we need to buy this at all?"
It seems strange that critics of the likley procurement outcome refuse to recognise that if weather forecasting is a science, then suitably qualified forecasters, regardless of their origin, should be able to predict objectively.
I can only assume that the BBC have been following a robust, transparent and objective process. Have the Met Office been complacent in their bidding or are there genuinely better qualified competitors? If they want to throw stones at the BBC's procurement process would the critics not have been better to have criticised the selection process prior to its commencement. Perhaps the BBC should have carried out some stakeholder engagement in the process earlier and brought the advocates to the status quo with them.
Having said that, it seems logical that the Met Office would want the freedom to compete to deliver weather forecasts to other boardcasters too, without being subjected to nationalistic loyalty. Why can't the defenders of the status quo recognise that for the Met Office to do that there has to be open competition.
However, my question is not about whether or not the weather forecast should be provided by the Met Office or not. Nor is my question about the selection and award criteria. or indeed its robustness.
To me there is a much more basic question, specifically the need for the BBC to spend money on providing a weather forecast at all. A lot has changed in 93 years. There are now so many sources of weather forecast open to the public, for example, apps on a smart phone tailored to specific locations. Just because there has been a 93 year history of the BBC providing weather forecasts doesn't justify a further 93 years of need to for the BBC to provide weather forecasts! But isn't that a common problem is procurement; a contract is due to expire so we need to relet. Wouldn't procurement improve its contribution and value by asking the much more relevant question: "Do we need to buy this at all?"
Friday, 12 September 2014
For want of a compelling strategy
I must have read hundreds of Procurement Strategy documents, many of which were 'cut and paste' of another organisation's. The Strategy document sets out the directional plan for the coming period and signposts to the future desired state, it also provides the framework for making operational and tactical decisions. In getting ownership of the Strategy, the author, or their champion, needs to negotiate and 'sell' to key stakeholders. Of course we recognise that there is frequently a gap between the documented 'intended' strategy and what subsequently happens, the 'realised' strategy. The truth is that many of the documents I have read actually lack any To-Be, indeed many lack an ambition or need for change.
It is against that backdrop I read with interest that Dunelm have chased their chief executive, even with an increase in profit, over failure to reach agreement on strategy. The Directors wanted a more ambitious strategy and the CEO failed to set that out. It is also interesting that the Directors didn't like the realised strategy which led to criticism that: "The stores look a bit more organised, a bit clearer, a bit easier to wheel a trolley around ...". We do not know whether or not the Board had previously endorsed that strategy or whether the realised strategy differed from the agreed intended strategy.
Regardless, I wonder how many CPOs need to take heed of the example of the Dunelm example, ensure they have an ambitious strategy with the endorsed ownership of their Procurement Strategy and an implementation plan with appropriate KPIs to ensure implementation.
It is against that backdrop I read with interest that Dunelm have chased their chief executive, even with an increase in profit, over failure to reach agreement on strategy. The Directors wanted a more ambitious strategy and the CEO failed to set that out. It is also interesting that the Directors didn't like the realised strategy which led to criticism that: "The stores look a bit more organised, a bit clearer, a bit easier to wheel a trolley around ...". We do not know whether or not the Board had previously endorsed that strategy or whether the realised strategy differed from the agreed intended strategy.
Regardless, I wonder how many CPOs need to take heed of the example of the Dunelm example, ensure they have an ambitious strategy with the endorsed ownership of their Procurement Strategy and an implementation plan with appropriate KPIs to ensure implementation.
Friday, 28 February 2014
Another Groundhog Day for UK public prourement
I have previously discussed the Groundhog Day approach to UK political procurement (and here). The Groundhog Day approach to procurement policy is interesting. Imitation is said to be both the best and most sincere form of flattery - there must be some agreement that these policy through procurement initiatives, conceptually at least, have some merit. They also have the potential of being good political platform announcements - when a politician makes a conference speech the concept may well resonate with the audience and few appear to stand up and shout 'Groundhog Day'. The Groundhog Day Policy must also give the person who suggested the recycled initiative some kudos.
But do Groundhog Day procurement policies not also throw up other questions. For example, what lessons have been learnt from the previous attempt at addressing this, was there an outcome evaluation of the previous initiative, why was the previous initiative not embedded in practice, will those who adopted the former strategy now have problems reselling the new strategy, are those who resist change actually the winners in Groundhog Day procurement policy?
It does strike me as strange that opposition MPs, who may well previously have led on these Groundhog Day initiatives, aren't asking questions and attempting to break the cycle. Either way, as I say, the policies, generally appear to be good, pity about the implementation and performance management.
Any suggestions as to what the next Groundhog Day procurement policy will be?
Thursday, 20 February 2014
Lessons for procurement from care.data
There are few areas in public services delivery which are more precious to individuals in the UK than the NHS and the protection of personal data. Yet somehow the NHS, in trying to introduce an IT system which will share patient data, appear to have forgotten that. As a result of getting the communications plan relating to the change wrong the NHS have had to delay implementation of the initiative by six months - perhaps even indefinitely. What seems to have gone wrong and are there any lessons for procurement?
First, let's remember that this is about change management. You can't expect people to just go along with your belief of what represents an improvement, you have to win them round, you have to listen to their concerns, understand their perceptions of the potential risks, and clearly communicate the benefits. On all these fronts the NHS seem to have got it wrong as far as care.data is concerned. You also have to get those who are trusted and have influence over those impacted on the change on board - recall we heard last month that a reasonable proportion of GPs are sceptical about care.data.
Experts believe that the new system will help in the assessment of new solutions, better manage risks and help performance management - all very laudable. But patients believe their personal data will be sold and have a lack of confidence in existing data security - all very understandable. The NHS claim every household received a mailshot outlining the benefits, yet many of those impacted by the changes still appear to be in the dark and sceptical - did they receive the mailshot or was it lost in all the other 'noise'?
So what are the lessons for procurement?
First, let's remember that this is about change management. You can't expect people to just go along with your belief of what represents an improvement, you have to win them round, you have to listen to their concerns, understand their perceptions of the potential risks, and clearly communicate the benefits. On all these fronts the NHS seem to have got it wrong as far as care.data is concerned. You also have to get those who are trusted and have influence over those impacted on the change on board - recall we heard last month that a reasonable proportion of GPs are sceptical about care.data.
Experts believe that the new system will help in the assessment of new solutions, better manage risks and help performance management - all very laudable. But patients believe their personal data will be sold and have a lack of confidence in existing data security - all very understandable. The NHS claim every household received a mailshot outlining the benefits, yet many of those impacted by the changes still appear to be in the dark and sceptical - did they receive the mailshot or was it lost in all the other 'noise'?
So what are the lessons for procurement?
Friday, 6 December 2013
Twelve Angry Men - Procurement Theatre review
The film version of 'Twelve Angry Men' was released the month I was born, yet I have never seen it. Yes, I am of the vintage which remember Robert Vaughan when he was 'The Man from U.N.C.L.E.' and Martin Shaw as one of The Professionals. Perhaps that was why I couldn't resist the opportunity to see the stage version at The Garrick tonight.
The high-level story is a comparatively well known court drama played out in the Jury Room. One Juror isn't prepared to go with the pack and eventually the pack go with the original solitary Juror. It is brilliantly played out at the Garrick by Shaw, Vaughan, et. al., and I couldn't recommend it highly enough.
But it struck me that the procurement lessons didn't just lie in getting a good deal from Lastminute.com but in the play itself.
The Jurors each bring their own personal judgements to the Jury Room. Some were formed by the appearance and pedigree of the defendant. Some were based on racial prejudice. Some were influenced by the urgency of prior commitments and a preference to be somewhere else. Some too strongly influenced by others 'opinions'. Some even viewed changing their initial impressions as something to be defended, as if in a competition. Having said that, this is a play which will have you laughing out loud - it actually makes use of some brilliant irony and comedy.
It stuck me how effective questioning led to a better decision as the lack of robust evidence was highlighted.
However, it also struck me that this was a bit like some of bid evaluations I have witnessed. The need for a quick decision and pre-conceived ideas led to a poor decision, if not, wrong decision. The dominant voice for a strong individual subtly, and sometimes not so subtly, bullying others into a decision. I could go on with the parallels. But, if, instead of a Jury Room drama, this was recast as a Tender Evaluation Panel, I wonder which character would represent the CPO?
Twelve Angry Men may be a great play, but I think a DVD of the film would be a useful procurement training resource the next time a complex contract award is being approached. Come to think of it, it would be a very useful procurement training resource (full stop).
The high-level story is a comparatively well known court drama played out in the Jury Room. One Juror isn't prepared to go with the pack and eventually the pack go with the original solitary Juror. It is brilliantly played out at the Garrick by Shaw, Vaughan, et. al., and I couldn't recommend it highly enough.
But it struck me that the procurement lessons didn't just lie in getting a good deal from Lastminute.com but in the play itself.
The Jurors each bring their own personal judgements to the Jury Room. Some were formed by the appearance and pedigree of the defendant. Some were based on racial prejudice. Some were influenced by the urgency of prior commitments and a preference to be somewhere else. Some too strongly influenced by others 'opinions'. Some even viewed changing their initial impressions as something to be defended, as if in a competition. Having said that, this is a play which will have you laughing out loud - it actually makes use of some brilliant irony and comedy.
It stuck me how effective questioning led to a better decision as the lack of robust evidence was highlighted.
However, it also struck me that this was a bit like some of bid evaluations I have witnessed. The need for a quick decision and pre-conceived ideas led to a poor decision, if not, wrong decision. The dominant voice for a strong individual subtly, and sometimes not so subtly, bullying others into a decision. I could go on with the parallels. But, if, instead of a Jury Room drama, this was recast as a Tender Evaluation Panel, I wonder which character would represent the CPO?
Twelve Angry Men may be a great play, but I think a DVD of the film would be a useful procurement training resource the next time a complex contract award is being approached. Come to think of it, it would be a very useful procurement training resource (full stop).
Friday, 29 November 2013
Procurement of taxis - get me out of here
What's the best way to procure a taxi service?
I suspect the custodians of the BBC are asking that question at the present. £10m a year spent on 350,000 journeys needs some sort of strategic approach. But users of the Beeb's Gateway Booking system seem to think the centralised purchasing system isn't delivering the best price. The examples cited suggest that buying locally, 'maverick buying', is approximately 50% cheaper.
Justifications used by the procurement department include: "we have to ensure that the companies used are both legally compliant and vetted, and this is done as part of the managed service provision ... we also require a 24/7 service which ensures broadcast criticality, full transaction reporting covering all journeys, ensuring we are compliant and can report our [tax reporting] obligations".
Virtually every organisation uses taxis and there are legal requirements for any taxi provider. It would be quite difficult in almost any part of the world I have been in not to find a 24/7 taxi service. I can understand that in certain situations there will need to be special provision for vulnerable passengers but why pay over the odds for all the other journeys?
There is always a dilemma when you try to take away flexibility and freedoms from staff, for example, their ability to hail a cab as an impulse buy or just when you need it as other options just won't work, so you can expect the odd example to be cited as part of the resistance to change, but why not just use corporate credit cards, claims expenses and, if it is abused, remove the freedom or tighten the controls.
I think there also needs to be some serious benchmarking discussions taking place with the providers. Something does not look right and the profession can avoid 'amateurs buy best' perceptions.
I suspect the custodians of the BBC are asking that question at the present. £10m a year spent on 350,000 journeys needs some sort of strategic approach. But users of the Beeb's Gateway Booking system seem to think the centralised purchasing system isn't delivering the best price. The examples cited suggest that buying locally, 'maverick buying', is approximately 50% cheaper.
Justifications used by the procurement department include: "we have to ensure that the companies used are both legally compliant and vetted, and this is done as part of the managed service provision ... we also require a 24/7 service which ensures broadcast criticality, full transaction reporting covering all journeys, ensuring we are compliant and can report our [tax reporting] obligations".
Virtually every organisation uses taxis and there are legal requirements for any taxi provider. It would be quite difficult in almost any part of the world I have been in not to find a 24/7 taxi service. I can understand that in certain situations there will need to be special provision for vulnerable passengers but why pay over the odds for all the other journeys?
There is always a dilemma when you try to take away flexibility and freedoms from staff, for example, their ability to hail a cab as an impulse buy or just when you need it as other options just won't work, so you can expect the odd example to be cited as part of the resistance to change, but why not just use corporate credit cards, claims expenses and, if it is abused, remove the freedom or tighten the controls.
I think there also needs to be some serious benchmarking discussions taking place with the providers. Something does not look right and the profession can avoid 'amateurs buy best' perceptions.
Tuesday, 12 November 2013
Strategic supplier management in UK government
On Sunday I discussed Premier Foods novel approach to strategic suppliers. Yesterday, the National Audit Office published a Memorandum to Parliament on Managing Government Suppliers - an interesting publication for anyone concerned with strategic procurement approaches, regardless of the sector you work in.
Margaret Hodge, Chair of the Public Accounts Committee, is clearly not happy with what the Memorandum has highlighted, nor that of its sister report on the role of major contractors. Both would have been of particular interest had their conclusions been fed into the PASC Inquiry on public procurement so it will be interesting to see 'what happens next?'
40 contractors have been identified as 'strategic' and collectively they consume 25% of the government's total spend. The suppliers are identified as strategic on the basis of extent and profile across central government and potential added value, but not necessarily spend or risk.
There still appears to be confusion on roles, responsibilities and accountabilities between spending departments and the Cabinet Office. That strikes me as something which needs to be addressed urgently as it could lead to suppliers playing one off against the other and causing gaps in strategic supplier management. At the present spending departments are the contracting bodies, yet both the departments and suppliers are subjected to Cabinet Office interference without accountability. Of course there's nothing unique about this and it's not a problem unique to the public sector either.
But then we also have the potential for dysfunctionalism with the Cabinet Office's focus on short-term savings while departments can be expected to have a wider view.
Margaret Hodge, Chair of the Public Accounts Committee, is clearly not happy with what the Memorandum has highlighted, nor that of its sister report on the role of major contractors. Both would have been of particular interest had their conclusions been fed into the PASC Inquiry on public procurement so it will be interesting to see 'what happens next?'
40 contractors have been identified as 'strategic' and collectively they consume 25% of the government's total spend. The suppliers are identified as strategic on the basis of extent and profile across central government and potential added value, but not necessarily spend or risk.
There still appears to be confusion on roles, responsibilities and accountabilities between spending departments and the Cabinet Office. That strikes me as something which needs to be addressed urgently as it could lead to suppliers playing one off against the other and causing gaps in strategic supplier management. At the present spending departments are the contracting bodies, yet both the departments and suppliers are subjected to Cabinet Office interference without accountability. Of course there's nothing unique about this and it's not a problem unique to the public sector either.
But then we also have the potential for dysfunctionalism with the Cabinet Office's focus on short-term savings while departments can be expected to have a wider view.
Thursday, 24 October 2013
Procurement reflections on Grangemouth negotiations
But what we are seeing is also high stakes negotiation. At face value we have the following buyers and sellers:
- Shareholders, who are indirectly buying workers;
- The workers, who bought union membership;
- The union, who sell union membership;
- The union, sell (broker) on behalf of their members;
- The workers, who sell their skills to the employer;
- Buyers throughout the country, who purchase fuel and plastics, used, for example, in the manufacture of cars and packaging;
- The UK government, who will incur additional financial and political costs if the workforce are unemployed or there are industry security of supply impacts.
However, what happened?
Monday, 21 October 2013
#CIPSLicence roulette with five cartridges loaded
Today I read the Supply Management Supplement on Career Development - you can hopefully see CIPS logo in the top right section of the picture. Like most of the Supply Management Supplements I found this one an easy read and it raised some useful points. Yes, I liked the CPO interviews on '[Their] route to the top'. I also quite liked the tips on using LinkedIn - not rocket science but helpful for those who haven't yet realised LinkedIn can be really useful.
But I read the Supplement with #CIPSLicence tinted spectacles.
Now when I think of a strategy I always think in terms of mutually reinforcing actions and messages - there has to be internal consistency. So it came as quite a surprise to me, given the arguments put forward for the CIPSLicence, that CIPS have effectively endorsed a publication which flies in the face of the Licence Strategy. In the whole Supplement, so far as I can see, one message was missing, why bother with MCIPS never mind the #CIPSLicence. The CPO's held up as exemplars don't appear to be MCIPS and the 'Salaries in procurement' research didn't seem to give any credence to MCIPS.
As I argued last week, CIPSLicence strategy appears flawed. However, now I wonder, instead of a strategy, are CIPS playing russian roulette with five loaded cartridges?
Saturday, 19 October 2013
HS2 and risk of the cloak of invisibility
The political and managerial leadership of HS2 may 'believe in' HS2 but they need to have clarity of the key messages and they need more integrity in communications.
Last night's Newsnight was yet another example of chaotic stakeholder engagement. Newsnight had clearly identified 'what hadn't been said' in the published KPMG report and had resorted to a Freedom of Information request for some answers. The FoI response provided a fuller story of the winners and losers. Then the HS2 CX fruitlessly tried to justify why Newsnight needed to resort to a FoI request.
Everyone knows there will be winners and losers with HS2, as with most business cases. The trouble comes when the emphasis is to 'accentuate the positive and eliminate the negative'. Stakeholders are rarely that gullible. Those who have most objections to change will always look for what is hidden and use that in their argument. I've been discussing these flaws in the HS2 approach for so long I'm sure some universities must now be using HS2 as an example of poor communications and stakeholder management. As this continues trust and confidence will be continue to be eroded and there's a risk that even those who will be winners will also start to become suspicious and cynical.
Tuesday, 15 October 2013
#CIPSLicence strategy appears flawed
CIPS argue that procurement practitioners need to be licensed so as to "protect the public and our professionals ... and prevent disasters such as contamination of food in the supply chain and slavery in supply chains". Now that's a very bold claim and really amounts to nonsense; licencing procurement professionals could never prevent disasters such as food contamination or even slavery in supply chains and it would be impossible to produce any evidence to demonstrate that it could.
Before such a claim should be made CIPS need to provide evidence of the root causes of the food contamination debacle and the current slavery in supply chains, and whether or not any MCIPS/FCIPS have been involved. If any CIPS members have been involved we then need to understand what action CIPS took or propose to take under the CIPS Code of Ethics. If you already have a Code which should protect against such failures, fix the Code adherence as opposed to adding a new panacea. Of course, CIPS also need to have a reality check to establish what difference would a CIPS Licence have made - absolutely none I suspect.
Is CIPS commitment so deep that it will rescind any CIPS awards which have been made to any of the culpable organisations involved in these procurement scandals? Will CIPS remove from CIPS Corporate Certification any culpable organisation? Will CIPS remove MCIPS/FCIPS from any culpable members? Unless CIPS are prepared to use those existing tools then a Licence will fall short.
We then have the issue as to why CIPS have not been successful in ensuring MCIPS is the required standard for anyone in central government procurement
Before such a claim should be made CIPS need to provide evidence of the root causes of the food contamination debacle and the current slavery in supply chains, and whether or not any MCIPS/FCIPS have been involved. If any CIPS members have been involved we then need to understand what action CIPS took or propose to take under the CIPS Code of Ethics. If you already have a Code which should protect against such failures, fix the Code adherence as opposed to adding a new panacea. Of course, CIPS also need to have a reality check to establish what difference would a CIPS Licence have made - absolutely none I suspect.
Is CIPS commitment so deep that it will rescind any CIPS awards which have been made to any of the culpable organisations involved in these procurement scandals? Will CIPS remove from CIPS Corporate Certification any culpable organisation? Will CIPS remove MCIPS/FCIPS from any culpable members? Unless CIPS are prepared to use those existing tools then a Licence will fall short.
We then have the issue as to why CIPS have not been successful in ensuring MCIPS is the required standard for anyone in central government procurement
Friday, 4 October 2013
Some dosh, some dosh, my design for some dosh
The Richard III saga has now turned into a hostage crisis as a potential contributor to the cost of his burial now threatens to withdraw their offer of funding, if they don't get their way in the design of the tomb. Now Cathedrals can be accepted as knowing a bit about design (most medieval Cathedrals remain iconic today), so you'd have thought Rich's mates would have concluded: "let's just go with the flow". Not so.
The Richard III Society had offered to contribute £40,000 to the cost of the £1.3m tomb in Leicester Cathedral The Cathedral hadn't budgeted for the funding from the Society. So, to a certain extent, the Cathedral gang appear happy to say "keep your dosh".
This has wider implications for procurement strategy
Friday, 30 August 2013
Can procurement learn from the vote on Syria intervention
We heard of lessons learnt from the past - which must be a good thing. We've heard commentators declare that the vote is also a vote on the PM's judgement and that confidence in that will be irreparably damaged. Sadly, there was also a 'bad loser' syndrome, obvious after the vote, with some of those who failed to win over hearts, minds and votes denying the value of our treasured democracy and instead railed about the international implications. While Cameron said he "got it" the post-debate debate may have made us wonder which particular part of the message our leaders actual did get. However, I think there are some lessons from last night which are relevant to CPOs, particularly when they want to sell a new procurement strategy:
- Make every effort to learn from the lessons of the past - what's gone wrong is unlikely to have been forgotten and the legacy needs to be addressed before you can go forward;
- Regardless of your academic and professional pedigree, you need humility and excellent communications to bring key stakeholders to a position of accepting your strategy if it is to be adopted and implemented;
- You need to bring people with you and be seen to really, really, really listen to their fears and concerns - that means being seen to have taken those concerns on board and reducing, if not removing, their fears;
- Remember that key stakeholders are influenced by their key stakeholders too, for example, the PM appeared to view winning MPs voted as critical, but the MPs may well have viewed their own constituents voices more precious and recognised the problems they would have selling the strategy on doorsteps;
- Recognise that losing credibility in your judgement will have long-term adverse impacts on virtually every piece of advice you subsequently give;
- It is far more important to be viewed as having the good judgement to rip up a proposed strategy which lacks stakeholder ownership than to be so precious about it that your credibility is lost;
- Forcing through an unpalatable strategy is 'no win' as you can never predict with certainty the future and those you were against the strategy, with the benefit of hindsight, can always say, "but if only ...";
- Don't create unnecessary deadlines for decision-making - if you try to force a deadline on people sometimes it's easier for them to just vote for 'no change';
- If you can't sell a strategy it was unlikely you were ever going to successfully implement it;
- If you were unsuccessful in selling a strategy there's little since in saying "but I still know best'.
Wednesday, 14 August 2013
Indian helicopter vision on the need for procurement procedural ownership
Some months ago I discussed some of the lessons from the plagued Indian helicopter procurement - it has now emerged that procurement procedures were not adhered to. To me it is one of the fundamentals of good procurement, even though it doesn't seem very strategic, that you have pragmatic procedures which demonstrate probity, gained stakeholder ownership during their development, are effectively communicated, and then performance managed. If you cannot get those basics right then it doesn't mater how strategic your aspirations are for strategic recognition, the foundations just are not right.
So why is procedural compliance such a problem? The Indian Helicopter procurement, Stoke City Council, Serious Fraud Office, Lancashire County Council, and the Housing Executive in Northern Ireland are just a few of the recent discussions where procurement procedural compliance appear to have been flawed. It is almost irrelevant whether fraud and corruption took place if you have not adhered to procedures - non-adherence to procedures will always leave you perceived as doing wrong.
My suggestion is that the core lessons here are check the procedures are fit for purpose, make sure they are understood, and then performance manage. If you don't you may be the next case study.
So why is procedural compliance such a problem? The Indian Helicopter procurement, Stoke City Council, Serious Fraud Office, Lancashire County Council, and the Housing Executive in Northern Ireland are just a few of the recent discussions where procurement procedural compliance appear to have been flawed. It is almost irrelevant whether fraud and corruption took place if you have not adhered to procedures - non-adherence to procedures will always leave you perceived as doing wrong.
My suggestion is that the core lessons here are check the procedures are fit for purpose, make sure they are understood, and then performance manage. If you don't you may be the next case study.
Thursday, 25 July 2013
The greener grass of the Crown Commercial Service
There is no perfect organisational structure for procurement, just the most appropriate set of trade-offs for a given time. I have absolutely no doubt that if we had a centralised procurement structure at the present time, we would have just heard an announcement that decentralisation was the answer. Quite simply the grass will always be greener on the other side and the tools of the 'existing structure' are easy to blame for current failures (in this case the structure).
But more fundamentally, what is the problem we are trying to solve at the present time?
Are we seeing the green shoots of a recovery or looking at a deteriorating economy? Let's give the economy the benefit of the doubt and say we're looking at recovery - I don't think centralising will accelerate the recovery and remotely help small businesses or investment. We don't have enough organisations who are likely, at the present time, to satisfy the qualifying criteria for the 'bigger is better' contracts we can expect from the CCS.
But then think of the policy objectives the CCS will be asked to deliver - it does not strike me we have a consensus view of of what procurement aims to achieve at the present time. For example, is it cost reduction or wider social objectives? Without that clarity what are the outcomes CCS should be measured against? Even if there were that clarity at the present time, by the time CCS hits the road we will be starting to see the warm-up routines for the next election - should the objectives be set for the recovery and can they be flexible enough to reflect a new government's manifesto?
Is there a readiness to change? How on earth could any causal observer of public procurement believe there is a readiness to change to the CCS at the minute. We continue on the hamster's wheel of making little progress on winning hearts and minds towards more collaborative procurement. Until the stakeholders hearts and minds are won, all we can expect are 'work arounds'.
Have we the skills? Well we know there are issues with contract management, but that could be solved without CCS. Would it not be better to get on top of contract management before you make the contracts bugger? Even if we got on top of contract management, we have almost no evidence of effective risk management and performance management - getting bigger is unlikely to cure that, on the contrary just magnify the detrimental impact.
I could go on but that doesn't strike me as useful, really what I'm trying to say is that we can make any structure work but we need to recognise there is no perfect structure. We can make any structure work but to do that we need a clear vision and leadership, and clarity of the outcomes to be achieved. We can make any structure work but to do that we need the right culture and skills. We can make any structure work but we need a readiness to change, excellent stakeholder engagement, change management, risk and performance management. Yes, we could make CCS work but at the present time the key ingredients just aren't in place nor are they likely to be within the envisioned timescale. We could make CCS work but history suggests it won't unless we get the foundations in place - but then if we got the foundations in place would we even need the cost of changing to CCS?
Tuesday, 14 May 2013
No cause for celebration at PASC Procurement Inquiry
What can you say about a discussion which starts off with the change champion saying procurement reform is not ambitious enough, hasn't done what was set out in current plans, ... is old fashioned, long, expensive, mitigating against small and younger businesses, .... From there it was downhill all the way, including the usual mantra of a lack of skills and lack of any serious contract management. Inspirational - not at all. Encouraging - no. Belief in the change - no.
The glimmer of hope in a potential single source 'closed loop contract' for recycled paper which would lead to a new paper mill had the potential for celebration - but stakeholder ownership hasn't been gained. Senior mandarins are considered partially to blame, yet we were also told "when people really want it to happen it can and does". Personally I would have liked someone to have asked how long that contract lock-in will be and what protection will be in place to protect against long-term supplier power?
Then we heard about reducing the cost of sending out giro cheques, yet no one asked why are giro cheques being sent out at all as opposed to BACS payments?
Procurement reform appears to be aspirational as opposed to performance managed - so all the lessons from Michael Barber's unit seem to have been forgotten!
I could go on, but the most disheartening message, to me, was the assertion that the "primary objective through procurement is getting the goods and services needed by the citizens at the best price". With a message like that is it any wonder there is inertia.
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