Tag Archives: social change

Swiping Right for Social Enterprise

Procurement should be swiping right for Social Enterprise to create broader outcomes. It’s not the easiest change to make, but it’s a vital one for the future.

Photo by Clark Tibbs on Unsplash

Doing things in new ways can be awkward. It’s like dating, there is nervous tension about expectations versus reality and how you will be perceived. Will you be able to “sell” your positive traits well? Will the other person measure up to your idea of success? Do you split the bill or pay for the whole thing? All of the rules from your last relationship have gone out the window – this is new territory.

In New Zealand, the Government has recently changed the procurement rules by shifting the focus towards ‘Broader Outcomes‘.

“Broader outcomes are the secondary benefits that are generated by the way a good, service or works is produced or delivered. These outcomes can be social, environmental, cultural or economic benefits, and will deliver long-term public value for New Zealand.

Broader outcomes require you to consider not only the whole-of-life cost of the procurement, but also the costs and benefits to society, the environment and the economy”

New Zealand Government Procurement Rules

There is no longer a focus on value for money, which is sometimes treated by some as getting the lowest price. The focus is on public value which is multifaceted.

What Else is New?

There have been other subtle changes to the Procurement Rules which have removed barriers whether they were real or perceived. The direction is set, the path has been cleared and now we must dust off our dating profiles and learn to do business in different ways.

We must actively seek commercial outcomes that derive social impact. This is not to say that was not in the consciousness before, but it was not quite as front of mind as it is now. 

Challenges of Putting Yourself Out There

This welcomed change brings about some challenges. There are varying degrees of experience and knowledge of working in a more agile or lean manner within procurement ecosystem. Applying new ways of working to the core machinery of Government can be even more challenging.

While the appetite is there, it can take some time to grease the entire wheel to move. There are many sectors and government agencies where these types of models and ways of approaching procurement have been around for eons.

It’s about bringing together the case studies of what has worked well and applying them more liberally to other opportunities.

Procurement functions can feel pulled, with one foot stuck in the traditional process driven tendering world and the other foot in the new procurement world. The new world focuses on early engagement and co-designing solutions more than ever before.

In the new world, procurement adds value at the beginning of the process and through effective contract and supplier relationship management. Procurement is not the process, in fact this will be largely automated in the not so distant future.

The new world suits the smaller businesses, the start up’s, the social enterprises as it makes Government more easily accessible.

Who are we Swiping Right for?

There has been a marked increase in interest in social enterprise or purpose driven businesses. This does not mean discriminating for these types of businesses but rather, deliberately bringing them on the journey or slicing up parts of projects that may be better delivered by these types of businesses.

It’s about giving them a voice at the concept stage or joining them up with other larger businesses who can bring in the big guns and who are sometimes better placed to take on larger risk.

The Awkward Social Enterprise Disco

Generically speaking the large buyer (particularly government) can look at start-up’s or small businesses with a high degree of risk and uncertainty.

  • Can they met all of our requirements?
  • Can they grow to meet the evolving capacity demands that successful projects often breed?

The smaller supply side of the fence often look at government as impossible to break in to, focused on lengthy tenders, slow to move and offer contracts that require extreme liability stances or loaded risk that shifts the balance towards the supplier. A small start up or social enterprise, for example, might not have the knowledge to begin to deal with our often seemingly fixed ways of working.

What’s Working?

The movement is happening, here is what I see:

  • Agencies working together
  • Buyer and supply side meeting and connecting
  • Different sectors of the supply side engaging to work together
  • More and more green lights everywhere: internal buyers, management, stakeholders, suppliers and the rules are more supportive
  • Procurement functions are helping to facilitate the gap by connecting supply markets and private sector with internal buyers
  • Procurement functions are working with the internal buyers by showing different ways of managing the process, e.g. co-design, agile, sprints, early supply market engagement.
  • Starting small, not tackling the significant contracts first.

Why Bother?

Because we should, because it’s the right thing to do and because spending the same dollar twice by making an impact and providing tangible social good with taxpayers’ money. Just. Makes. Sense. 

Micro-inequities Add Up

How often do you a halt a conversation, mid-flow to check your phone or reply to a text message? Ever thought about how actions like this impact the people around you? Tom Verghese explains micro-inequities. 

Lightspring/Shutterstock.com

Let me ask you this question, how many of you have experienced one or more of the following scenarios:

  • You’re talking to someone and they’re looking at their watch while you’re sharing some information
  • You’re talking to someone and they’re texting on their phone
  • You’re talking to someone, the phone rings, they turn around and they have a long conversation with the other person on the phone while you’re just standing there?
  • How many of you have experienced being excluded from small talk?
  • How about someone passing you in the corridor of the office without speaking or saying “Hello” to you?
  • Have you ever had the experience of someone taking credit for your work?
  • How about someone constantly mispronouncing your name and not making any effort to get it right?
  • Or someone calling you a nickname without your permission?

All these are examples of what is known as micro-inequities. Micro-inequities is a term defined by Mary Rowe in the 1970s. They are defined as those subtle and disrespectful behaviours that exclude others. Sometimes they’re very difficult to recognise for both the person doing it and for the person receiving it. When you commit a micro-inequity you may only do one at a time and it may not have a big impact, but it is easy to imagine how over a period of time these individual behaviours can add up and have a significant impact. It’s like a drop of rain – if a drop of water hits you it probably won’t make a difference, but if drops of water hit you constantly it is certainly going to get you wet!

How do you become more aware of the impact of your behaviour?

The key issue here is how can each of us be more consciously aware about our behaviour and its impact on others? One way to address this question is to understand the idea of micro-affirmations. Micro-Affirmations are the opposite of micro-inequities and again are often the small and subtle behaviours that demonstrate inclusion.

One example of a micro-affirmation behaviour is inclusive verbal skills. When you’re leading a group discussion, make sure that you are involving everyone. Encourage contributions from everyone in the group, especially those who are quiet. There will always extroverts and introverts; extroverts are those who always have ideas to contribute to the meetings, and it’s easy if you are not being conscious to actually exclude the introverts. You may need to specifically ask the introverts for their ideas and input.

A second example is using non-verbal skills such as eye contact, smiling and nodding of the head. Acknowledge people when they speak up and say something, or make a contribution to the team. These micro-affirmations will lead to a greater sense of inclusion for all.

In today’s world of social media, it’s really tempting when you’re talking to someone to answer your phone or send a text. I’m not saying that you can’t ever do that, but I would challenge you to try to be conscious of what you are doing and its impact on others. It is not difficult to ask for permission to put a conversation on hold while you answer a phone call. Alternatively, have the phone on silent mode and focus and be present in that conversation.

No More Excuses: Procurement Needs To Take Ownership Of CSR

Supply chain is one of the most critical areas of CSR. So why aren’t more procurement teams taking greater ownership when it comes to establishing policy?

CSR, ethics and sustainability – three topics that it’s hard to get away from in procurement. The greater focus enabled by the Internet and social media means there’s no hiding place for organisations. And there’s certainly no acceptance of organisations burying their heads in the sand.

Organisations are now including these activities in strategic objectives. And as procurement’s strategic influence grows, the profession has greater responsibility for its role in CSR objectives as a whole. In light of this, it’s hard to understand why procurement and supply chain aren’t taking ownership of CSR activities in their organisation.

The Expert View

Gaining better insights into the current situation means speaking to the people on the ground. And that’s exactly what has been done by the ISM Committee for Sustainability and Social Responsibility. The Committee surveyed its members exclusively for Procurious on three questions relating to current CSR practices.

While the responses highlighted a wealth of knowledge in the profession, they also showed that there’s still plenty of work for procurement to do to take more ownership. Happily, there were also some practical suggestions on how procurement can help their organisations improve their CSR efforts.

Here’s what the members had to say:

To what extent do you think that Procurement and Supply Chain professionals “own” CSR?

The responses highlighted that procurement’s ownership was very much dependent on the organisation in question. However, there was a consensus that, in all cases, procurement and supply chain professionals needed to play an active role in the development and execution of CSR policies and initiatives.

While some aspects of CSR strategy are not supply-chain related, the majority of risks and opportunities are. Both social and environmental ‘hotspots’ exist within the extended supply chain, leaving it exposed in the event of any issues. Members stated that most organisations started with a materiality assessment. This assessment was usually focused on mitigating, or improving, financial and reputational loss. Importantly, supply chain was frequently seen as a critical area.

As a result, it was felt that procurement and supply chain professionals needed to be engaged in the process.

What is the real damage of a CSR breach?

The general consensus was that a CSR breach caused major damage in three key areas:

  • Shareholder Value
  • Brand
  • Human Cost

Consequences of a major or public CSR breach include:

  • An inability to recruit and retain top talent.
  • Losing the ability to differentiate the firm by its products, services and values in the marketplace.
  • Losing the opportunity to create an internal culture of commitment founded on ethics and a broader view of the firm’s role in the marketplace.
  • Financial loss through litigation, high cost of supplier replacement, brand, disruptions from labour disputes, etc.

Brands can be quickly damaged. A firm’s exposure can be quickly played out on social networks, within hours and minutes. However, one member of the Committee made an interesting observation on where the impact fell. “If the supplier has brand recognition, the buyer gets off the hook more for a CSR breach in the supply chain. If the supplier is unknown, (e.g. the contractor running the BP Deepwater Horizon rig), then the big brand takes the full brunt.”

This highlights the importance of strong policies, regardless of the size of the organisation.

What are your tips for professionals looking to improve CSR in their organisation?

Each member was asked to give three tips on how professionals can help make improvements in their organisation. There were so many good ones that we’ve been able to come up with a list of 8!

  • Understand the premise of sustainability – it’s not just being good, but meeting the needs of stakeholders impacted by decision. Any resulting actions by investors, business partners, employees, regulators and civil society will be of consequence. Top-down support is key.
  • Establish “rules to live” by and measure compliance across the entire organisation.
  • Create internal incentives for professionals to engage in sustainable purchasing. It’s important to use carrots as well as sticks.
  • A supplier code of conduct – with teeth – is considered best practice.
  • Collaborate with other parts of the organisation – procurement shouldn’t operate in a vacuum.
  • Use data to build the business case for sustainable supply chains.
  • Develop processes to identify risks in the supply chain and teach your suppliers these tools, so that they may employ them in sub-tiers.

Take Ownership Now

With CSR being such a critical activity for organisations, procurement can’t afford to be left behind. It’s time to step up to the plate, put procurement in the spotlight and take greater ownership of policies, processes and outcomes. With a wealth of supporting knowledge out there and so many professionals willing to help shape a robust CSR program, there’s really no excuse any more!

Innovation and the Shifting Technological Landscape

Innovation is more important than ever before. The technological landscape is currently undergoing a shift three times the size of the industrial revolution.

This is according to Steve Sammartino, an expert on the digital revolution and disruptive technologies. Steve has worked in marketing for the world’s largest companies, founded and sold his own start-ups, is a business journalist, and thought leader in the start-up & technology arena.

And amongst all this, Steve still found time to make news headlines by designing and building a fully functional, air-powered, 500,000 piece Lego Car!

Ahead of his keynote address at this year’s CPO Forum event in Melbourne, Steve talks about the changing structure of the economy and the Supply Chain, and the importance of innovation to procurement and its future leaders.

Why is focusing on innovation more important than ever before?

We are living through a radical change 3 times the size of the Industrial Revolution. It’s 3 times bigger because this time it involves the entire globe, not just the developed economies. Here’s a fact to blow your mind in this regard – there are currently more mobile phones in use around the world than toothbrushes!

Technology and access to it is now seen a primary life improver for people in developing countries. It means that what worked and what mattered yesterday, won’t be a valid strategy today. Innovation is not just a matter of a company’s survival in disruptive times, and not just a way to outgrow your competitors.

And the thing that is different is that it isn’t just at the consumer end that innovation needs to occur. It’s an entire supply chain reset. A new infrastructure is being built, and major innovations are happening in areas customers never see. 

What are some of the ways multinational companies can adopt a ‘start-up mindset’?

More important than anything else, big companies need to learn how to fail, and that failing is not bad. They key to startups is that they move quickly, and cheaply, to find out what works.

Big companies also need to decentralise decision making, as many of the Industrial era efficiencies are now being usurped by nimble and local connections. In a world where one size no longer fits all, we need to remember that this applies to local operations as well. Lots of small mistakes lead to better outcomes in a connected world. 

How can businesses cultivate a more innovative and collaborative workplace culture?

Businesses just need to do one thing – remove the layers of authority, and become a horizontally focused organisation, not a vertical, hierarchical one. This will help to create an environment where frequent small risks are rewarded.  

What tips do you have for current and emerging leaders to stay ahead of the curve, and be equipped to lead their companies to future success? 

Staff need be interested in change. Be students of change and be the person who introduces ideas to colleagues, don’t wait for management to know what is coming. The other thing to remember is that being innovative isn’t about inventing the technology, but more about working out how to benefit from the changes. It’s not a technological process, but one of courage and creativity.

We need to love our customers more than we love our infrastructure, especially in times when infrastructure is reset. We can do this by thinking of applications to serve our customers, rather than ourselves.

Also, given most large companies are fearful of change, it only takes an open mind to get a few steps ahead. It’s not about guessing what’s next, but adapting faster when ‘next’ arrives. 

Why should businesses invest in social impact and change?

It’s vital because it is what we value as a society. But it needs to be more than donating to charity, or triple bottom line reporting. Our responsibility needs to be designed into our supply chain. Businesses need to go to market with a net positive social outcome, not white-wash bad behaviour after profits are made.

It’s a very important part of brand building. Organisations that make products that benefit society save costs on things like advertising. Just look at Tesla – a $30 billion company that doesn’t spend a cent on advertising.

You can hear more from Steve on these topics at the CPO Forum 19th of May in Melbourne. At CPO Forum 2016, the line-up of inspirational speakers will reveal how procurement leaders can “crack the code” and harness the game-changing power of supplier innovation.

For more information, including how to register for CPO Forum 2016, visit the website.