In Part 1 of today’s post, I talked about the consensus that public sector procurement is a critical tool in driving socioeconomic benefit.
Referencing a number of articles by industry experts, it is clear that there is a universal acknowledgement that we have to do more in terms of leveraging public coffers in critical areas including living wage increases, SME engagement and the stimulation of industrial regional benefits.
Unfortunately, the problems with realizing these worthy goals in not in the desire, but the execution. Specifically, and has Ian Burdon concluded in his post, the blind adherence to following process with little or no regard to outcomes is at the heart of the problem.
I would tend to agree.
Back in July 2010 I wrote a post titled “Procurement ombudsman says Federal buying policy unwittingly helping to create monopolies.” It was an interesting piece on many levels as it uncovered what I believe are the key problem areas that not only impact socioeconomic procurement outcomes but – at least at the time – public sector purchasing in general.
In the 2010 post, I had made reference to an e-mail I received from then Executive Director, Chief Information Officer, Treasury Board of Canada, Secretariat Bob Mornan, telling me that everything I was saying, including my questions surrounding the award of a major contract to a vendor in which their promised savings could never be achieved, may very well be true but what was important is that the government followed bid procedures. (Editor’s Note: inevitably and as expected this project collapsed under the weight of unrealistic and unrealizable expectations. You can read more about it in my post “A stroll down the Way Forward memory lane . . . good thing I have the movie rights!“)
Procedures, or in the case of the Burdon article “process,” clearly trumped productive and beneficial outcome in the above instance. The question is why?
Perhaps the insight a Procter & Gamble senior executive shared with me following a seminar I had given a few years ago provides an important clue. Basically they expressed the belief that “unlike the public sector, when you make a mistake in the private sector you are not likely to end up on the front page of the local newspaper.”
Fair enough, but while wanting to avoid the scrutiny associated with a public misstep may be understandable, the consequences of what I will call the “belt with suspenders” mindset has its own negative consequences.
On August 11th, 2011 I wrote the following in a post titled “Losing Vendor Litigation (Part 4): Belt with suspenders purchasing;”
“The perpetuation of this flawed view through the cross-pollination process that saw senior executives make the move to high ranking government positions has proven to be toxic to the public sector. This is due to the fact that it has undermined the kind of proactive, creative thinking that is necessary to maintaining a dynamically effective tendering process that adapts to the way in which the real-world actually operates relative to achieving a best value outcome.”
In short, when you operate under a fear of negative repercussion for any failings whatever the reason, you are bound to place greater emphasis on dotting your “I’s” and crossing your “T’s” as opposed to focusing solely on the best outcome.
It is to be certain a vicious cycle reminiscent of Jim Collins’ Good To Great Doom Loop.
This raises another interesting question . . . how do you break the cycle so that best outcomes become the sole focus of a procurement process?
When you answer this question, you will then unlock the tremendous promise that public sector procurement can provide in terms of socioeconomic impact.