It is just three weeks until the launch of our book Private Sector by Head, Public Sector by Heart and never have its multiple messages been more relevant.
This year’s High Court ruling, which found the government’s use of VIP lanes in the award of personal protective equipment (PPE) contracts illegal, brings into sharp focus the need to eradicate from the procurement process any hint of unequal treatment or favour – just one of the risks that regularly beset professionals.
Risk is inevitable and it is there in everything we do, the decisions we make and in particular in our dealings with suppliers and the commercial world. How we deal with risk is often down to planning, leadership and how well with understand the supply market.
Our second extract from our book which is due to be released on 8th February 2022 relates to risk, entitled Risk is Inevitable – Embrace It. In this chapter we take the perspective of three key groups: Director/senior manager; procurement professional and Contract/service manager.
‘ If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.’ Sun Tzu, The Art of War
Where does risk sit?
Taking these points forward, businesses need to get into the mindset that risk is board-level business and is not just the remit of compliance, procurement, or any other departmental team. According to WBR Insights and Coupa, in its whitepaper, Rethinking Risk and Opportunity in the Supply Chain:
‘While the top supply chain risk concerns are operational risk and supplier risk, per the responses, CPOs report they lack confidence in identifying these risks in their supply chains. We also found that most CPOs do not think their functional leads and business units are properly equipped to manage risk. Almost all (99 per cent) of CPOs agree that risk should be the responsibility of the entire business, not just the risk and compliance teams. Yet they are not confident in their organisations’ ability to manage risk, noting that IT, Procurement, Legal, and Finance are not adequately able to manage this risk.’
In business, what we need to do is ingrain a culture of interest, challenge and, above all else, responsibility. Let’s be frank; whilst you can delegate authority with appropriate responsibility to others, responsibility, ultimately, remains at the very top of the business.
Given the importance of procurement and supply chain management in sustaining businesses now and in the future, why wouldn’t you take an interest in some of your key areas of procurement? It is simply not enough to lay the blame at your procurement officer’s door when you have failed to get involved, or even shown a modicum of interest.
Experience tells us that things can and will go wrong and it is vital that those at board level provide clear and unambiguous direction and guidance to leaders and staff when they do. It is prudent to do so before any crash actually happens! Get involved and ask questions about routes to market, alternative routes to market (think contingency/resilience), especially once you’ve identified what your key contracts areas are (your ‘top 10’) and the broader business risks, which you will have already identified.
Drive lateral thinking and resilience planning in your leaders and management teams, so that, collectively, you can attempt to address identified areas of weakness or vulnerability. Encourage honesty and an open environment where questions and suggestions are considered positive approaches and not a reflection on an individual or department. Think more broadly and ask what your competitors (especially private sector competitors) and peer organisations are doing and what challenges they face? When was the last time your business undertook a SWOT analysis, and do you really know where your weaknesses lie? Finally, which suppliers account for most of your key risk and what can you do to build in resilience or contingency with them and your organisation?
You are charged with operational support by ensuring that those that deliver capability or effect are suitably resourced. You look up to board level for direction and guidance but also into the service delivery areas and understand what is going well and what is not. Those operating at board level will rely upon you for your expertise and recommendations, and you should never be afraid of imparting bad news.
The right thing to do is to highlight issues and then say or recommend what you’re going to do about it. If areas need elevating for consideration at board level, then you are the conduit for this to happen; however, this is not all about what could go wrong. Good news and progress must never be forgotten and should also be publicised. You should bathe in the reflected light of the glory of your direct reports – not the other way round. This also provides assurance that capacity, ability and resourcefulness exist to highlight and resolve issues, rather than, simply, to report them.
Finally, think about driving decision-making at board level and what you can do for the broader benefit of the business. Perhaps, those at executive level would appreciate a procurement or commercial view of life – perhaps, a SWOT analysis may be one way to achieve this?
You may not think it at times, but you’re the vital component in the machine of service delivery, along with members of your team. If you do not get what you need to meet commitments to your customers and people the whole organisation fails. You will have an intimate understanding of the challenges those at the vanguard of the business need and will be aware of the frustrations too. You maintain this awareness through your networks and relationships, as is explored in the first sections of this book on ‘Awareness’. It is your role not only to highlight current issues, but also to think ahead.
You should be encouraging your teams to adopt the same mindset. Good ideas and solutions come from all aspects of the business, not just those that operate in more strategic positions. Get on the front foot and help the business help you by looking laterally and ahead. Team meetings are an excellent way in which to gain an accurate insight so periodically ask for ideas and thoughts about the business generally and whether anyone has any innovations they think would improve things. Sometimes, people may not be too keen to raise thoughts and ideas in public, so suggestion boxes or externally provided staff engagement surveys may be methods of generating responses.
‘This book provides a much-needed practitioner perspective on the challenge of procurement. By reflecting on over 30 years of experience in both public and private sector, the author’s personal account describes the tools, approaches and lessons gained over this diverse career. It demonstrates how known techniques and frameworks support the strategic and operational decisions made but also, and importantly, the personal ‘soft’ skills and approaches required to create success. The content is an excellent ‘check list’ for any procurement professional to reflect on, enabling those readers to avoid pit falls and traps and also gain competitive advantage by working with suppliers more effectively.’
Professor Richard Wilding OBE, Full Professor & Chair of Supply Chain Strategy, Cranfield School Of Management
‘I am not a procurement specialist. But, as an operational logistician, I appreciate the vital importance of effective supply and support chains created and managed by professionals who know how to do their job. And any of those professionals would benefit from the experiences, commentary and insights offered in this book. Very far from being a ‘how to’ manual – thankfully – instead it provides a compelling, environment-wide narrative that will add holistically to the knowledge of even the most capable practitioner. Beyond that, for those who lead and employ these practitioners, this book should give them the confidence to trust and empower them to deploy their skills and experience to deliver value through risk-balanced and innovative solutions to enduring problems.’
Richard Hill CBE, Air Vice Marshal, Director Support, Transformation Ministry of Defence, Chief Logistician (Royal Air Force)