Forging a road less travelled
From the February 2022 print edition
While many public purchasing bodies lack a cohesive operating culture, all public institutions have at least one de facto organizational culture that governs procurement practices. In fact, most institutions have multiple competing cultures that operate at cross-purposes.
As this article shows, these organizational cultures can be divided into four quadrants, with three common but flawed cultures, and a fourth less common culture that adopts a balanced and strategic approach to procurement governance.
The natural state of public procurement is anarchy, not order. In fact, if left ungoverned, the crosscurrents created by operational time pressures and due process standards are guaranteed to cause turbulence in your tendering cycle. Organizations that are trapped in Quadrant 1: non-compliant gridlock, suffer from slow and inconsistent procedures and a high level of non-compliance.
How do you know if this is your organizational culture? If your approach to balancing time pressures and due process standards has no rhyme or reason to it and your procurement department is in an ongoing tug of war with business units who always want to cut corners, you are probably in Quadrant 1. If you are constantly off balance, improvising and reacting to each project, dealing with unrealistic demands to customize your procedures, while renegotiating roles and responsibilities and working to unreasonable deadlines, then you are likely in non-compliant gridlock. Unfortunately, as discussed below, in trying to escape this state, most institutions hit a crossroads that leads down two dead ends.
Many institutions attempt to flee the state of procurement anarchy by rushing north to Quadrant 2: expedient non-compliance, where they embrace a de facto organizational culture that places operational deadlines over everything else. How do you know if this is your procurement culture? If you prioritize speed over compliance whenever rules get in the way, you are likely in Quadrant 2. If you improvise your planning decisions based on unrealistic deadlines, resource projects on the fly to try to meet those deadlines, and then view your biggest project risks as missing those deadlines, your organizational culture is expedient non-compliance. This high-speed approach may work for you in the short term, but your luck will ultimately run out when your corner cutting finally catches up to you.
Institutions that want to escape the anarchy of Quadrant 1 but have no appetite for the high-speed pursuits of Quadrant 2 tend to head east and seek refuge in Quadrant 3: red tape gridlock. The de facto culture in this quadrant prioritizes compliance over speed, at least superficially. These institutions tend to be locked under layers of seemingly unnecessary red tape.
How do you know if red tape gridlock is your organizational culture? If your reviewers, regulators and rejecters have no apparent sense of urgency, irrespective of your operational time pressures, you are likely in red tape gridlock. If your priority is making sure that your standard procedures are always followed for the sake of consistency, while you bury your procurement cycle under multiple layers of approvals, you are likely living in Quadrant 3. While applying superficially standard procedures may create a false sense of compliance, embracing a culture of intransigence is a game of brinksmanship that you will ultimately lose. Your organization’s business units will remain mired in red tape for only so long before they panic due to time pressures, break ranks and start cutting corners. Once that state of procurement panic sets in, they’ll either drag you into Quadrant 2 for another high-speed chase or, if you dig in your heels in the name of due process, pull you back into Quadrant 1 to battle it out in the state of procurement anarchy.
Quadrant 4: strategic execution is the opposite of procurement anarchy. In this quadrant, time pressures are properly balanced against due process standards as organizations strategically forge a path between expedience and gridlock. Public institutions that practice strategic execution are serious about procurement governance and embrace a formal culture of proactivity and advance planning. They adopt updated procedures that enable high-speed precision. They allocate sufficient time and resources to better ensure successful project execution. While strategic execution may be a road less travelled in public procurement, it is the clear path forward for institutions that put a premium on good governance.
This article is from Paul Emanuelli’s forthcoming 2023 edition of The Art of Tendering: A Global Due Diligence Guide.