Types of procurement
Is procurement like baking a cake, sending a rocket to the moon or raising a child?
The short answer?
We think it might be like all three but not at the same time. It just depends on the project.
Brenda Zimmerman was one of Canada’s leading management thinkers and she used the metaphors of baking, rockets and children to help people recognize and make sense of the difference between three types of problems - simple, complicated and complex. She was a pioneer in using the ideas of complexity theory as a management science.
We’ll explain these ideas below, but at the Guelph Lab, we think governments actually use procurement to solve all three kinds of problems - simple, complicated and complex - but that the processes available aren’t always a good fit for the kind of problem being solved.
If you’re a public servant, see if this sounds familiar…
Have you ever had the experience of trying to write a request for proposal (RFP) where you’re deliberately being as vague and open-ended as possible so you’ve got the most amount of wiggle room? You’re hoping to get a really broad range of ideas back, and even then, you’d like as much flexibility as possible once the project is actually up and running?
(Now, if you happen to be a public servant who works in a procurement department, have you ever had the experience of reading a draft set of specifications, and thinking that the person who wrote them might actually be being deliberately vague?)
If the answer is yes, then perhaps you’ve been trying to solve your complex problem with a simple (or complicated) process.
Here’s what we mean
Baking a cake is a “simple” problem - there’s a recipe, and following it closely assures you of the desired outcome every time. You might think of this as the world of “best practice” - there’s a lot of agreement about what the problem is, and there’s a repeatable, predictable way of solving it.
The science of sending a rocket to the moon is a “complicated” problem - there’s broad agreement about the goal (land on the moon) and doing it once significantly increases the chances of success a second time. In this case, high levels of expertise are required to arrive at a good answer (there might be number of ways to get to the moon). This is the realm of good practice (as opposed to “best” practice). Note: the organization(s) required to actually deliver a rocket to the moon are likely extremely complex.
But, raising a child is “complex” problem - every child is unique, what works for one might not work for another. They are products of a dynamic web of relationships, situations and influences, and expertise can help but is not sufficient. Getting different perspectives and ideas is useful and only once you begin to try something can you really know whether it “works.”
We’re increasingly told that complexity is our new reality - CEOs of global companies are thinking about it, and management sciences are telling us effective leaders either reduce it, cope with it, or thrive in it.
Key to the approach that Brenda and others have taken though, is to make distinctions between those situations when we’re “in complexity” and those when we’re not. It’s poor situation recognition that gets us into trouble - acting in “simple” ways when we’re faced with complex situations or, conversely, assuming everything is complex.
What does this mean for procurement?
The idea of expertise is deeply imbedded in the procurement process - it assumes that in one way or another, the city will arrive at a good answer to whatever issue it’s trying to address and from there will be able to describe what it needs. Ideally, in lots of relevant detail and with clear objectives, timelines and deliverables. Whether staff have the expertise and capacity to arrive at the answer themselves or whether they bring in consultants to help, the goal is the same. You’ll get a good product or service if you already know what you want.
Sometimes it’s useful (and possible) to know exactly what’s needed ahead of time. In those simple or even complicated situations, tendering and RFPs work well to spell out what’s required, some of the constraints, and the budget. Think of road repairs, or buying stationary.
Complex procurement problems tend to be a poor fit for common procurement practices though. Sometimes knowing the answer ahead of time just isn’t possible, and any attempt to do so might actually be counter-productive. Attempting to specify the desired solution (in as much detail as a procurement department would like) probably shuts the door to a whole host of potential solutions, and by extension, limits the number of organizations that are likely to bid. Likewise, ambiguous bidding documents are a problem, not least for potential bidders, and most procurement departments work hard to make sure RFPs and tenders are clear.
Many organizations face situations where they don’t know exactly what is they want until they’ve tried out some potential ideas. Is government any different?