Drawing Conclusions for Procurement Leaders from the Kath Harmeston Tribunal

We promised to come back to the Kath Harmeston industrial tribunal and draw some lessons and conclusions for procurement professionals. That follows our three-part review of the case from Marie-Claire Kidd, the journalist who followed the case probably more closely than anyone.

The tribunal rejected Harmeston’s core claim, that she had been dismissed because she was a whistle-blower who exposed the Co-op’s excessive spending on management consultants, and decided that she was dismissed primarily because of the engagement of her favourite consulting firm, Silver Lining Partners. But please accept that our comments here don't mean we see Harmeston as the only party who came out of this badly; the Co-op did not exactly cover itself in glory either, if you read Kidd’s detailed report.

However, there are points that senior procurement folk going into a new role might wish to consider here, so today and tomorrow we will discuss the four main conclusions.

Don't make enemies too quickly in a new role

It certainly seemed that Harmeston got off on the wrong foot with several senior colleagues, even before the whole Silver Lining Partners (SLP) farrago. The tribunal heard a lot of detail around seemingly trivial incidents that nonetheless ended up with a fractured relationship between Harmeston and some senior colleagues.

There were arguments over her office and which floor she would occupy; she not unreasonably wanted to be on the “senior executive” floor, but that all turned into a much bigger issue than it should have been. Questions about her relocation package – probably based on a misunderstanding in the first place.

Then there was the whole issue around Pippa Wicks, the COO who was also a top manager with consulting firm Alix Partners and for whom the Co-op was paying less than £8,000 a day. Now we might all have felt that this was something the CPO should raise as an issue – for instance, Harmeston was (not unreasonably) worried about an Alix Partners “land and expand” strategy”.

But when you are new in a job, even one as senior as this, you need to proceed carefully with matters of this sensitivity. How does the CEO feel about this? Can you build some alliances if you want to make change? Particularly given the the organisation was going through a genuine crisis, this needed careful handling. But along with those seemingly trivial issues, this all appears to have created a situation where Harmeston made enemies, rather than friends. Who knows, if she had created more allies, she might have bene better able to explain and defend the SLP decision.

Procurement has no divine right to impose policies

Harmeston was critical of the top team for ignoring procurement policies. But as Richard Pennycock, the CEO, told the tribunal, there is no legal requirement to have a procurement function at all, let alone follow any particular set of policies. “The Co-operative was a burning building and when your building is on fire you pick up the phone to the fire brigade,” he told the tribunal. “AlixPartners was the fire brigade.” The building would have burnt down by the time procurement processes were undertaken, was his analogy.

The judge agreed that in a crisis situation such as the one faced by the Co-op, spending quite a lot of money without very formal procurement processes was not unreasonable. So with all the talk of a "licence to practice" and suggestions that only certified procurement professionals should be "allowed" to buy for their organisations, this was a salutary reminder for us that the Board, the shareholders and the CEO decide on the role of procurement, policies and so on.

Over time, a senior procurement executive may well want to tighten up on governance, compliance and process. But we also need to accept that sometimes, our own senior people may have a good reason for breaking the rules. That isn't a crime and senior managers in procurement must balance our natural tendency for control with a business-aligned attitude that understands risks, urgency and business needs.

Part 2 tomorrow.

Voices (4)

  1. Nick Hanson:

    It appears to be very poor judgement and seemingly arrogance used by Harmeston. We succeed either through power, which we need to build through alliance and only use very sparingly, or, influence and persuasion, which is much more preferable. It appears this lady lacks the later.

  2. Paul Wright:

    Peter, I am no fan of license to practice and your point is a good reminder of the reasons, but you seem to be accepting the CEOs implication that Procurement is slow, bureaucratic and so wedded to rules as to ignore the building burning down. Why cant Procurement be the ones ignoring the rules and throwing the money around – we might be best placed to ensure it is effective. If the building is on fire dont you want the Safety officer being the one to tell everyone where to run, rather than everyone running in different directions? What if Alix were not the fire brigade but the redevelopers with an eye on the site?

    And though I agree with the need for politcal allies, I dont think it was Procurement who started the fire but the general management – and shouldnt they be above getting upset anout who has the corner office?

    1. Peter Smith:

      Paul, Two very good points. Yes, I do think we need to position ourselves as people who can be the fire brigade (or the ones managing the fire brigade) – I’m sure the new Co-op CPO (who is a very smart woman) will be doing that. And yes, if you read the judge’s full review, some of the Co-op’s behavior was petty too (the office thing and some stuff around first class travel that actually showed Harmeston in a pretty good light), and you got the feeling they were looking for reasons to fire her by that stage. but the point remains that any individual coming into a new role needs to be very sensitive to these little perception issues, and I’d argue you don’t start throwing your weight around until you have worked out the lie of the land, who your friends are, and certainly who your enemies are …!

      1. bitter and twisted:

        Yeah – tread softly, then get fired after six months for not appearing to do anything.

        Isnt a quick, shouty divorce better than years of low level misery ?

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