Drawing Conclusions for Procurement Leaders from the Harmeston Tribunal (Part 2)

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 (SLP). We described two conclusions from the case yesterday that should be noted by all senior procurement professionals and anyone going into a new role – here are the remaining two we would draw from the case.

Your early plans, targets and the like must be robust

There was considerable discussion at the Tribunal around the quality of Harmeston’s early work in the role, in particular the credibility of her savings projections that were presented to the Board. She suggested savings of £161 million were possible: her successor (a consultant) suggested £45 million was a more reasonable figure.

Now the cynic might say that the Co-op was simply looking by this stage for reasons to get rid of her, so was hyper-critical of the work. And really, we can’t make any incisive comment without seeing the detailed papers and proposals she presented. But the internal view seemed to be that her savings estimates were very optimistic. Of course, such large numbers would have justified a considerable consulting spend to help deliver them, so was that an issue maybe? Or was it simply that Harmeston saw this as a “greenfield site” with very significant potential and wanted to grab the Board’s attention?

However, and in particular at such an early stage of her Co-op career, we suggest that a more cautious projection would have been more credible, easier to achieve of course, and would have left the door open for a later increased number – the chance to be a CPO hero all over again! She might also have bene well advised to have checked her analysis with some individual senior colleagues before launching it generally – socialise your proposals before taking them to the Board is always a good tip.

Personally, in a new role I would always want to put forward a target that was impressive but not too optimistic. Particularly as at this early stage, no CPO can really understand the issues that will inevitably be faced as the programme is implemented. And of course, the actual work, the assumptions, the calculation and the logic all need to be robust and well thought-out.

You need to be whiter than white

The biggest outstanding question for the whole case is this. The engagement of consulting firm Silver Lining Partners caused Harmeston issues at Royal Mail - the fact that she left under a "compromise agreement" came out during the case, and SLP's work with Royal Mail was then terminated. We don't know the full detail of this, but clearly it was not all sweetness and light. So what is one of the first major moves she makes at the Co-op? Bring in SLP under a process that was less than fully transparent or competitive.

That turned out to be the single biggest factor that led to the Co-op deciding they wanted her out. Colleagues felt there was a breach of trust and judgement really in terms of her engagement of the firm, given what had happened at Royal Mail. But why on earth take the risk - or did she not perceive that there was a risk? Why not run a proper competition before appointing a procurement consulting firm - get folk like 4C Associates, Proxima and Future Purchasing to bid against SLP and see what happens?

We've talked to a few people who worked at Royal Mail, and none have really explained the SLP fixation, although there is a suggestion that Harmeston just felt she could not succeed without them. That's the dream of any consultant to some extent, but clearly this went to an unhealthy level - we do know good people who left Royal Mail, feeling blocked because the top team jobs were taken by SLP consultants.

Anyway, the point is that as the CPO, or indeed any procurement professional, you need to be whiter than white. If you want others to believe in and follow principles such as openness, transparency and competition, then you must live that yourself. If you don't, it will reflect more badly on you than if colleague in another function did the same, just because you are procurement. We have to live with that, walk the walk, take our own medicine, and be exemplars of that best practice procurement behaviour that we would so like to see in other colleagues. Harmeston failed to do that, which in the end cost her the job.

First Voice

  1. Paul Wright:

    Having quibbled yesterday, agree 100% today

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