“There are two nations; between whom there is no intercourse and no sympathy; who are so ignorant of each other’s habits, thoughts and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by different breeding, are fed by different food, are ordered by different manners and are not governed by the same laws… The rich. And the poor.”
The aforementioned quote is an erudite description by Benjamin Disraeli (a former British Prime Minister) in expressing the razor sharp disparity between the rich and poor in 1845 Britain. However, he might as well have been describing the two procurement sectors.
Typically, the subdivisions of any industry (especially those that fall into the public and private pail) are seen as being radically contrary with their respective modus operandi. But how true is this with the Procurement industry? Are there lessons that the two sectors can learn from each other, as they co-exist?
Being a Chief Procurement Officer, this question might have crossed your mind as you go about your day-to-day activity. Well, let’s delve into this inquiry by focusing on the following areas:
Fundamentally, the goals of both sectors are quite different. The ambitions of the private sector are rooted in boosting revenue, whilst that of the public sector is vested in achieving communal good.
As one would imagine, the reverberating theme in all of the managerial processes, polices and decisions within the private sector are crafted to solely maximize profits – which is an inherent byproduct of capitalism – and not chiefly focused on people.
What if the private sector went about putting in place policies that incorporated the ideology of the public sector (whose focus isn’t just about making more money, but on what the value that money can create – specifically, in achieving and improving the desired level of community services within a defined budget)?
In other words, creating procurement strategies entrenched in the intersection of a people and profit Venn diagram?
Such as a two-tong approach would be the catalyst of so many worthwhile and innovative products and services.
Intensity of Competition
Rivalry is a notable trait within the private sector - mainly because there are many players offering the same product and service offering – and there’s no trace of such competition in the public sector.
The beneficiaries of this competitiveness are the consumers, who of course are then faced with the bounty of choice. Unfortunately, in the public sector consumer service and product choice is limited and muffled by the lack of such activity.
What if the public sector took a page from the private sector and put in place structures that were unrelenting? Policies that strove for continuous improvement and resisted the urge for complacency?
The effect of such motivational regulations would be the birth of a plethora of public amenities that were top-notch in quality and surpassed the expectation of the constituencies – whose lives would be enriched by such agility.
In the private sector, buyers are chiefly responsible to directors who ultimately answer to shareholders – mainly due to the fact they are the entirety of the funds with which this sector uses to function, comes directly from them. On the other end of the spectrum, public sector buyers are only accountable to the general public.
As previously suggested, what if the private sector felt highly accountable to the public in tandem with fulfilling their fiduciary duties to the stockholders?
I bet you that there would be a kind of empathy and humanness to the way the private sector conducted their procurement activities, primarily because humans will replace figures on the financial ledger.
Limitation of Procedures
The public procurement sector – as like any other sector – is afflicted by bureaucracy. Buyers have to follow strict laws in order to get anything done. This obviously has its benefits (especially from a record keeping perspective), albeit, these rigid protocols can be a major stumbling towards being nimble.
What if public sector incorporated some level of flexibility typically associated with the private sector (where buyers can bypass standard protocol when the need arises)? This kind of fleet-footedness is a topmost requirement especially in today’s neck breaking and ever changing business climate.
You’re probably thinking that the premise of some of my assumptions is ludicrous – and while that might be a fair categorisation – I don’t believe that true change and innovation arises from taking the road most travelled.
Think big or go home!
Written by Pip Spibey-Dodd @Locomote