Living by the Principles

Table of Contents

One of the primary issues with the current, highly detailed approach to policies and procedures is that in the quest for control and consistency, the policy and procedure documents have often become monumental in length. There are two problems caused by this:

1. The number of people who will actually read all those words is pretty small
2. The number who can remember, assimilate and implement them effectively is even smaller
3. The people writing them will realise halfway through that they can’t cover all the variables and situations, so they take shortcuts or ignore them

In the end, the tight control that was the original intent is lost as individuals and teams interpret the ambiguity of not reading all of the documents and not understanding what little they have read.

“…teams interpret the ambiguity of not reading all of the documents and not understanding what little they have read.”

To combat this problem, the answer is not further constriction through even more detail, but rather we need to pick a limited number of really critical points that determine the effectiveness of a procurement process. How many key points to include is a key decision in the ultimate success of the model. Too much detail and you will lose the benefits that the principles based approach will offer, the environment will become overly constricted and procedural again. You need to identify the essential points that will drive the optimal outcomes you want to see in your procurement cycles when defining the next level of principles. The aim is to provided granular detail to reduce ambiguity while allowing the practitioners freedom develop innovative methods of achieving the desirable outcomes.

The process is one of growing increasing detail from a central ideal. For me, this kind of thinking lends itself to mind mapping. If you are not familiar with this concept, take the time to explore it a little and you may find a powerful new tool to add to your repertoire. A mind map builds the ideas out from a central theme that may be a problem, concept or project. Some people like to mind map on paper, for me, I love a software application like Simple Mind that I can use on my phone, tablet or PC. That way I can easily move nodes around and edit them as my thoughts take shape. While there are countless guides on how to mind map and the best techniques, take all of these as indicative only. The primary aim of mind mapping is to enable free and creative thinking. The omni-directional, cross linked and related pattern is designed to move your mind from hierarchical, prioritised thinking into a looser, organic mode. David Allen puts it well when he says that the worst words to start a creative process with are “who has a good idea” or “what is the most important thing”. These two sentences start the mind moving into tighter and narrower patterns of thought rather than expanding. The mind map gives the freedom to think of an idea and then another and another, no matter what the priority. Linking like thoughts to generate new ideas and relationships not considered beforehand.

Principles Base Approach

To illustrate the concept I have put together the map to the left (click on it to see a larger view). I’ve based this map on the Queensland Procurement Policy, since it is an example of an policy based approach being deployed at the strategic level. The map I have built is not intended to be the solution to be implemented, just a trigger for thought and discussion. The mindset I focused was, how can I develop a method of ensuring the procurement team meets the expectations of the policy.

The aim for this next level was to look at each of the six key principles and identify the characteristics that I would expect to see if I believed that principle had been implemented. Now in doing this I didn’t focus on one principle and ask myself “what are all the characteristics of this principles, how would I know if the principle has been applied”. Focusing on one for too long with actually result in fewer ideas and an ever shrinking scope of though. Instead I just randomly scanned from one to the next and let thoughts pop into my mind and quickly documented them. You have to give your mind the freedom to wander, the result was a map double the size of the one you see, many ideas were junk, random thoughts, or completely impractical. The different colours of each stream of thought also help to trigger diversity of thought, sometimes changing the colours half way through will trigger a new stream of ideas. Once I’d run dry, I then reviewed what I had. I culled some ideas, others I though would relate to a different parent node, so I moved them (a great benefit of software with drag and drop functionality). The refinement went on until I was happy with the outcome. New ideas will crop up through this process as well, so enter them and reconsider how they fit.

The process is actually quite fun once you get a roll going and new ideas can appear as if out of no where and this can be an individual or group activity. But enough of mind mapping. Lets take an easy principle and consider the thinking behind each component of this next level of principles, the operational level principles, and ponder how they would impact the culture and focus of a procurement team and even the organisation as a whole.

Principle 1 – We drive value for money in our procurement

What constitutes Value for money in procurement is a topic all of it’s own and one that it is difficult to get full agreement on. But there are some core principles that I came up with to define this variable measure. The seven I have listed are (in no particular order):

    1. Competitive tension should be leveraged and maintained in all procurement processes through to contract signing
    2.  There should be good commercial consideration in all outcomes, benefit must outweigh cost
    3.  Only genuinely competitive vendors should be invited into the process
    4.  The Contract must have a clearly defined start and end date and must never automatically rollover
    5.  Processes should aim to engage the largest number of vendors feasible
    6.  All references to the minimum number of quotes is the number of quotes received, not requested
    7.  All procurement evaluations must include a defensible commercial assessment model

Now if you consistently implemented just these seven principles in an effective way, believe it or not, you will start seeing immediate benefits. What’s more, I don’t think there is any need to explain any of these principles and an experienced practitioner would know exactly how to implement them in a process with no further training. Instead of having to troll through reams of documents attempting to steer strict adherence to an ideal procurement process, the practitioners instead are inspired to consider whether the process they are contemplating will genuinely drive value for money.

“…practitioners instead are inspired to consider whether the process they are contemplating will genuinely drive value for money”

You may now be asking the question “how can these broad principles guarantee the outcomes desired by the original policy principles?” Well they can’t. All the policies and procedures in the world cannot replace skill, knowledge and experience, but oddly though, overly detailed procedures can disable a practitioners ability to utilise their own skills. To enable maximum gain from allowing practitioners to use their own knowledge and capabilities to deliver optimal results, you still need to ensure your procurement team has the right level of knowledge and experience and some techniques to enable that will be discussed in a coming capability blog. The system also relies on honesty. Now you would think that honesty is a given in a profession such as procurement, but workload, managerial pressures and just plain laziness get the better of all of us at one point or another. So you need some check points. Look out for a blog covering procurement control points that offer an effective method of reviewing the application and performance of this model.

Here are some parting thoughts to consider. Take a recent process you have run, if your were asked to outline how your process achieved the core principles outlined in this model, could you honestly say it did? If you were to leverage the shared knowledge of your peers, would you rather have them read your documents word for word, or would you rather explain the intent of your process, the methods you used to achieve it and how the process will ensure adherence to the guiding principles? Which process would free up more innovation, a detailed work instruction or ten dot points of critical success factors?