Procuring Strategic Business Partners: Partner Assessment and Selection Approaches

As part of our Supplier Relationship Management Hot Topic for April, we are delighted to have a first guest article from John Doyle, a Director at B2Bppm Ltd. This covers a process that is genuinely new to me, and you can't say that about much in the procurement world!

Hot Topic

Strategic Outsourcing and Collaborative Business Relationships.

The trend for outsourcing to ‘strategic delivery partners’ or establishing business relationships which require close collaborative working and trust between the client and supplier (or between suppliers) is buoyant. At the same time, it is well documented that collaborative working across organisations has a poor record, with up to 70% of relationships hitting significant problems, usually due to poor collaborative behaviour, ‘soft competences’ or culture clashes.

Each year many organisations procure key partners to work with them on the delivery of projects or trust them to deliver work on their behalf. However, many traditional tender evaluation methods (written evaluation, presentations, testimonials) can be ineffective in predicting the future behaviour of potential suppliers/partners and have significantly poorer prediction qualities when compared to behavioural and simulation-based assessments.

Behavioural Assessment Tools

Since the Millennium, many of the UK's highest value contracts in rail, highways, defence, construction, nuclear and infrastructure (perhaps most notably the London Olympics & Paralympics Delivery Partner procurement), have used a range of partner selection methods which can be loosely labelled as ‘behavioural assessments.’ Behavioural assessments aim to predict (and rate for award purposes) future supplier competence. That is done by either directly observing behaviours in realistic conditions or through understanding competence by analysing critical incidents in the past experience of key personnel and assessing the behavioural responses they provided at the time.

Depending on the importance of the ‘soft’ competences to contract delivery, behavioural assessment can range up or down in terms of the degree of scrutiny provided. They can be used individually or in combination with each other. The main partner selection tools we have used and encountered are:

Team Behavioural Assessment Centre

Designed to test the tendering organisation key personnel and their ability to work with the client organisation. It works by bringing together key people from a tendering and client organisations, simulating realistic future project challenges within authentic future operating conditions, and assessing performance against pre-determined behavioural measures. 15-20% of the overall award marks has been a common range in recent years. To our knowledge, over £30 billion worth of UK contracts have used this approach over the past decade.

Integrated Supply-Chain Behavioural Assessment

Similar to the team behavioural assessment, this approach is used where multiple suppliers are being procured and will be required to work across an integrated supply chain. Representatives of tenderers and the client are put together into various team configurations to work on a range of interface scenarios and issues. This approach was used in the 2013 Network Rail Northern Hub competition.

 Behavioural Interviews

Used with key personnel, behavioural interviews differ substantially from traditional interviews. Here, actual past behavioural responses to events are dissected and assessed against pre-determined behavioural best practice indicators. This approach was used in several Water Utility procurements in 2014.

 Behavioural Profiles

These can be at individual or team level. Psychometric profiles may be used which evaluate required competences and preferences; or written material can be required in submissions, relating to past behavioural responses to given events. This approach was used in the Highways Agency Collaborative Delivery Framework competitions in 2014.

 In Situ Cultural & Behavioural Assessment

Randomised visits to existing operational sites using interviewing or team assessment with operational personnel is an approach which can be likened to a ‘deep dive’ assessment, aiming to test for consistency between reported information (in interviews, presentations or written submissions) and actual behavioural practice and culture in operation. This approach was used in the Nuclear Decommissioning sector for procurements in 2007/08.

 

These approaches are usually reserved for those contracts where risks of contract delivery failure lie in the area of ineffective behaviours and competences of people. But delivering a reliable assessment is a specialist activity, so often external support is required by the buying organisation. In that case, look for service providers who can:

  • Show a track record in delivery
  • Demonstrate compliance with national & international standards in behavioural assessment
  • Show that approaches have been tested for assessment & scoring reliability
  • Deliver within a quality assured process
  • Field qualified behavioural assessment practitioners

Our firm works with a number of buyer organisations to help them to integrate behavioural assessment into their partner selection approach. We are also helping buyer organisations to assess their own readiness to collaborate and to determine the steps they may need to take to play their full role in the ‘chemistry’ of collaboration. But that is another story!

You can contact John at john@b2bppm.com

 

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