In Praise of Fairness

This was the first time in 22 years (since her birth) that we didn’t have our daughter with us for Christmas Day  - she spent it with her boyfriend’s parents. We were fine with that, but at her request  we pretended December 27th was the big day as they were visiting us by then. So yesterday was our “Christmas Day”, which means we’re still a little dis-orientated here !

Back to daughter - from a remarkably young age, we noticed she had a highly developed sense of fairness. In fact, this innate fairness in children is an interesting research topic for psychologists. It certainly seemed very powerful in her. That wasn’t so much in the usual toddler cry of “it’s not fair” when things didn’t go her way. It was more if she was playing with her polar bears, and dividing up “food”, or working out whose turn it was amongst her friends to go on the trampoline. Things being fair just seemed to be very important to her.

Which got me thinking, between mince pies and Doctor Who, about the importance of the concept in our business lives, as well as our personal, and how dangerous it is for us to under-estimate the power of fairness.

If our procurement processes don’t give potential suppliers a fair crack of the whip when we’re running bidding or sourcing processes, we will store up bad feeling. Or they may simply not bother next time if they don’t believe we are being fair. If a supplier “wins” an electronic auction, but then we just decide to carry on with the incumbent, perhaps having driven their price down a little, is that fair?

How we treat existing suppliers is another example. Extending payment terms might be within our power if we are a large buyer, but it’s probably not fair. Changing agreed contractual terms – of which payment is but one example – is generally something suppliers will perceive as unfair.  I rather like the  idea of Karma – eventually, organisations that treat their suppliers badly will get it paid back to them...

Outside procurement, it clearly matters in staff management.  I once took over as CPO in an organisation that had unmanageably high staff turnover – it was running at over 30% a year. And one of the main reasons was a perception that key people decisions weren’t being made on a fair basis. No-one understood why certain people had been promoted, as the process wasn’t transparent. The annual bonuses seemed to be allocated on an arbitrary basis, with rumours of favouritism. Someone at a particular management grade had been given a better company car than everyone else at that level.

The effect was corrosive and really negative. De-motivated staff, bad feeling between teams and people, and a high rate of good people exiting.  I don’t in all honesty claim great success in that or most of my past management roles, but putting in place some clear processes, rules and principles to ensure (as far as possible) fairness was certainly one of my management successes.

At a wider level, effective public administration relies on fairness. We might moan about bureaucratic public procurement processes, or formal recruitment and promotion exercises for public sector jobs, but we mess with that concept of fairness at our peril. Not only does disregarding it create bad feeling, it leads to poor decisions (the wrong supplier, the less good person for the job). And ultimately, suppliers (or individuals) will invest in non-value adding techniques to win business, looking for personal contacts, bribery or other ways to win if they perceive decisions are made unfairly or arbitrarily.

So as we approach a New Year, let’s celebrate fairness, build on the innate sense that most of us have from the very start of our lives, and remember its power – and the dangers if we lose sight of it.

 

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Voices (2)

  1. MG Man:

    I agree with you, fairness (and perceived fairness) is an important part of the procurement agenda.
    If suppliers consider an organisation is being fair in its award of contracts, pricing, and payment for example, it will build up a good base of longer term suppliers who are willing to work alongside it.
    When times are difficult the suppliers then tend to help out.
    Procurement management who encourage fairness hence end up with happier staff and a better supply base.
    Peter; thanks for your informative articles during 2012 and a happy and prosperous 2013 for you and your readership.

  2. Dr Gordy:

    Agreed – I feel embarrassed trying to defend procurement to potential and actual suppliers who clearly don’t feel they have been treated fairly. The bizarre thing is I really don’t think many buyers are aware of suppliers perceptions,

    Anyway, hope you enjoy (your) Boxing Day and that you have caught up with us all for a very successful 2013

    :)G

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