Procurement Activism – part 2

We introduced our exciting new concept of Procurement Activism yesterday. I’m sure some will say “we do it already”, and indeed our thinking is that it includes elements around corporate social responsibility, sustainably, supporting minority owned  suppliers and SMEs – concepts that are already in play and widely discussed in the procurement profession. But as we develop the theme over the next few weeks and perhaps longer, and get into the details, I hope there will some thoughts that are a bit more radical.

We’re facing civil unrest in the West. Unemployment is reaching record levels, and as we said recently, can a country like Spain or Greece really sustain 50% unemployment amongst its young people without very serious consequences?  We’re seeing huge global power shifts.  Wealth inequality is about the only thing growing in Western economies.  I happen to think these issues are probably more critical in the short term than global warming, but I don’t forget environmental issues.

Now procurement can’t solve these problems, but we can play a role. For instance, just one example - much of what we might term “undeserved” wealth comes from exploitation of imperfect markets. Why are there so many huge salaries in financial services? One reason at least is that many of the markets don’t follow any sort of competitive procurement process! Should we be making more fuss about that?

Who is better placed than procurement to highlight those issues and help come up with solutions? (By the way, I’m still a big believer in markets and particularly the power of competition – I haven’t turned communist yet in my old age...)

Given all this, I don’t think procurement can just sit back and say, “we’re just here to help the business get a better deal in a few simple categories”. (A thoughtful friend of mine recently told me of his fears that procurement is heading for a “trusted advisor” role that eventually leads to the destruction of the profession). That role may be too passive to secure our own professional future - we need to be activists for our own sakes and the wider agenda.

I do however recognise some dangers. As soon as you take away a clear, objective focus on value, you open the door to corruption in procurement processes; decisions made that include more inherently subjective judgements can disguise fraud and corruption quite easily. So part of our campaign must be to show more vigilance than ever in these matters if we do go down the Activism route.

And another good point was identified in a perceptive comment on last week’s post (from Mr or Mrs "Life") – that procurement can’t act without the support of the owners of the organisations in which we work.

What if the HR guy or gal starts unilaterally recruiting poor people to redistribute wealth, or the accountant starts overpaying a little here or there to those that really do deserve it? Isn’t it the same if you start targeting different metrics rather than value for money because of your own moral view, given that it’s not mandated by management and in particular the shareholders (or executive in the case of Government)?

I totally agree, and I’m talking about Procurement Activism, not what we could describe as "Procurement Terrorism"!  Another comment suggested that "Proactive Procurement" might be a better title and that's not a bad idea. But whatever we call it, I do think we can take the lead in promoting the sort of ideas we’ll look at under this heading over the next couple of weeks.

And we’d love readers to spread the word on this however you can and get some debate and ideas going...

Voices (2)

  1. Dan:

    I suppose it depends on how you define value for money. In local government, helping the local economy, or getting residents into work, is just as important as making savings, as it forms part of the strategic objectives of the authority. Therefore, any outcome that ignores opportunities for this might not be representing value for money, even though what you do get is cheap

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