Monday February 23, 2009
Jane Sunley - Managing Director
Opinion: unless handled well, the tendering process can prevent companies achieving the best from their suppliers
A couple of weeks ago an invitation to tender for a leadership programme turned up on the desk of one of our business development managers. Now, even in these challenging times when you might think we'd be rushing to secure very piece of business we can, we decided to stick to our policy of never entering into a tendering process unless we have prior knowledge of the client, their business challenges and circumstance and fully understand their objectives from the exercise.
We did call them, though, to request a meeting so that we could understand said issues. And they declined. So we wrote an honest letter explaining that we wouldn't be able to tender and why, with a brief indication of why we'd probably be perfect for the job and again stating that if they'd like to meet with us we'd be happy to come over and see them. Of course they did not reply.
By now you might think we're an arrogant lot. However, this is not just about what's on the face of the story thus far, it goes much deeper.
Having read the document we received, I reckon this is might have been the scenario:
- So, someone in operations or maybe even HR decides that they need to do something to perk up the business or fix a few issues, so they hit on a middle management leadership programme.
- They contact procurement who dig out the last tender they sent out (even though this was in 1985 or for the purchase of loo rolls), amend and update it a bit, Google a few development companies and send out the document.
- Or maybe they already have a loyal, existing provider with whom they've been very happy but as we're in credit crunch times, it's very important to achieve the best value for money and so decide to put poor old loyal supplier into a Dutch auction with aforementioned Googled providers.
- Then they sit back, see what comes in, maybe steal all the ideas and do it themselves. Or they go for the cheapest supplier and slap themselves on the back for saving all that money and still getting the job done. Or are they getting the job done or opening a can of worms?
By now you're thinking we're not only arrogant, but also cynical.
We are ardent believers in investment in middle management leadership skills as absolutely business critical. To the people at the coal face these leaders are the organisation - what a responsibility and one worth working on carefully to get right. So if I was considering a middle management leadership programme, these are some of the issues I'd want to examine, you might have others:
- What are the business outcomes required ie what needs 'fixing' and how will the bottom line benefit?
- What leadership development have the top team and subsequent layers had, what's their take on the whole thing?
- Have roles and responsibilities been clearly defined (and what are they)?
- How engaged are leaders and employees?
- What are the skills, experience and histories of the job holders?
- How will the success of the programme be measured?
- How will this be tracked, pre, during and post?
- Are there mentoring / coaching schemes in place?
- What support is there for these job holders?
And a whole raft of other information, though most of all, we'd want a feel for the culture of the organisation and the 'way things are done' there, the attitudes of the executive team, values, history, side issues. None of this was alluded to in the tender we received, and this was from a large international company which really should know better.
Now, I'm a big fan of NHS direct (whereby you can phone to describe symptoms and receive medical advice), but there are occasions when the doctor needs to see the patient before a cure is decided upon, and it's the same for leadership programmes. Replying to a tender with a load of ideas for generic programmes so that the procurer can pick the one he likes the look of without ever having debated the issues, and then to set about rolling out can be dangerous and is simply not a sensible investment.
Quite often when we're asked to look at leadership programmes, there's other work that needs to be done first or instead of. Often the issues lie elsewhere completely. People work with us because of our experience and expertise, so we can advise on the best course of action, to raise the issues that might not have been raised, to ask the questions that might not have been asked and to go away and think through those pieces of information and build the right bespoke solution.
Ah you might say, tendering is all about added value. Agreed. Everything is about added value. Some ways of achieving it are way more effective than others.
Harm or harmony? Is it better to spend £20K on a programme that causes more issues that it solves and therefore ends up costing the business more? Or is it better to spend £40K and resolve some issues that will allow the business to progress quicker, better, smarter and more harmoniously thus gaining a return on investment of many times what was spent? You might think I'm deluded and that in these challenging times people would be better off spending nothing at all. However, there's plenty of research and opinion to back up our belief that in these times people should be training more, not less.
To generalise (in addition to the arrogance and cynicism), the skills and attributes required for procurement professionals include detail focus, preference towards systems and process, compliance with the rules and regulations. And quite right too - if it's PCs or reams of recycled paper or 10 tins of baked beans that are being purchased. When looking for people solutions however, there is a need for the ability to see the big picture, to think beyond the norm and to apply a high level of emotional intelligence to the process. So it's fine to involve procurement to run the process but there must be input from the 'people people' and from operations to ensure the criteria are right.
If there really are no loyal existing suppliers to work with or new input is required and you really don't have the time to meet potential partners, then rather than ask a random collection of potential suppliers to spend time, money and creative input on completing a long tender document, my suggestion would be to put out a pre-qualifying document. This way purchasers can find out about providers and their suitability for the job by asking the right questions and asking for a case study. You could ask:
'If you were to undertake this project what questions would you ask us at an initial meeting?'
Put that with a case study and if I was in procurement, I could probably choose the good guys from the replies to that one question though of course you'd want to know who you're dealing with and a little about their background too.
Harm or harmony? What are your experiences of the tendering process?