Does public procurement need private sector stars (part 2)?

We looked in part 1 at the recent Michael Heseltine report on UK economic growth, and the idea that we need more private sector procurement starts moving into he public sector. We pointed out that this has been happening for years, which seems to suggest that a few star individuals are not enough in themselves to  make a major difference.  Today, we’ll ask three further questions.

1. Do these people exist?

So who are these CPOs in the private sector who are demonstrably better than David Smith, Les Mosco, Bernard Grey, David Thomas, David Shields, Stephen Guy, Al Collier.. .. etc etc.  I meet and work with a whole range of procurement people, from private and public sectors, and I had ten years working with CIPS which gave me a lot of exposure to a wide range of people.  I just don’t see a major sectoral  difference in capability between public and private procurement leaders.  There are excellent people in the private sector, but I don’t see a gap really in terms of comparing them against people I’ve just mentioned and many others. And in any case...

2.  Would their private sector skills be appropriate to the public sector?

There’s no doubt that private sector people can adapt – see the names in part 1 for examples of folk who made the transition.  But another issue is that often the organisations and individuals who are held up as great private sector benchmarks are just not appropriate comparators.

Sure, Apple have superb supply chain operations. But show me how a supply chain based on innovative design then massive outsourcing to low-cost Asian manufacturers  translates into making Home Office or Surrey Council procurement better? Yes, you,may argue that Tesco and Sainsbury’s are great at much of their procurement – of wine, cheese, baked beans...  But I can tell you that their “goods not for resale” procurement is not demonstrably ahead of the best public operations in terms of how they approach similar spend categories.

3.  Even if there were good people, is reward the reason they haven’t joined the public sector?

Frankly, there aren’t many CPOs earning the £300K plus salaries Heseltine seems to be suggesting are typical in the private sector. And, you know, if someone isn’t attracted by a salary in the £120K range, plus a pretty amazing pension, the chance of doing incredibly challenging AND worthwhile stuff, and perhaps ending up a “Commander of the Bath” (!), then I’m not sure I want them in the public sector anyway.

So, I’d be happy to have the debate with Lord Heseltine, but in general, I’d argue that he has limited understanding of either the real issues that face public procurement, or how we might actually be able to improve matters. And a few private sector stars is just an inconsequential sideshow to those real issues.

And sometime soon, I’ll put my pen where my mouth is and give a view of what might actually be worth doing to drive public sector procurement improvement. But just to respond to eSourcing Sensei who commented on our last piece  - yes, I do agree that there are reward issues more generally, but not most obviously at the very top.

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