Design Thinking and Co-creation for redesigning procurement processes.
Learnings on the USAID Momentum co-creation lab in Washington
Thinking on the possibility of government agencies and other organizations rethinking the way they relate to the organizations they fund, is half a dream come true and half a radical change of mindset in the way organizations relate to their suppliers.
According to their website USAID is “…the world’s premier international development agency and a catalytic actor driving development results. USAID works to help lift lives, build communities, and advance democracy. USAID’s work advances U.S. national security and economic prosperity; demonstrates American generosity; and promotes a path to recipient self-reliance and resilience…”
Procurement processes, tend to be strict, vigilant, competitive and very inflexible. Choosing who to grant a project, funding money or business is definitively a very delicate decision for any company or institution. Nevertheless Procurement processes are not always exact or choose the best options for maximizing spending or acquisition of goods and services. Very often these processes respond only to influence, convenience and other random factors that not necessarily contribute to improve quality or evolve the way organisations invest their money and resources.
According to Helen Hysell in The Science of Purchasing, (1922).
“The modern purchasing agent is a more important man by far than he was in older days when purchasing agents were likely to be rubber stamps or bargainers for an extra penny. A Purchasing agent of the modern breed is a creative thinker and planner and now regards his work as a profession”
Fierce competition derives in tense relationships in the sector, low quality offers, bargaining with the consequence of secretive and political management of funding and investment. This how for a long time procurement processes in companies and institutions have happened, but it might be time for a change. Frequently procurement interactions between buyers tend to be transactional and distant with very little space for partnership or collaboration, Competition between suppliers and the lack of space for mutual support, create dynamics based on lack of confidence and fear of the other where the quality of the offer matters less than the personal favors, business connections, price or direct benefits suppliers offered to staff.
As Procurement becomes more and more strategic in a world of constant change and innovation, where new and more efficient or sustainable ways to cover needs and execute solutions is constantly created, choosing the right source of supply can determine the progress or retrogress of a whole company or sector. having a deep knowledge of the industry ecosystem and deep understanding of the value exchange suppliers have with our organizations is the key to move forward or stay behind.
The co-creations session held in Washington for USAID led by the Designthinkers Group USA team gathered more that 200 stakeholders from the international development sector including prime organizations executing and sub-contracting grassroots and institutions around the world to execute US tax money on development projects.
The first important learning about this meeting is how to prioritize and curate the challenges of development to be supported by the 500 million dollar budget the program has. In this case curation comes from congress and public policy. The interests expressed by political parties and the current government show that the response to the question of where to invest, clearly comes vertically. Since this is the situation in many organizations, if the procurement office is not just transactional or practical of instructions, procurement needs to find strategies to document and connect with those new suppliers or resources that can offer better options for current and future needs. This is no easy task. But co-creation may be an answer. Generate a permanent bottom up dynamics of information that opens the door to internal initiatives, startups, local suppliers and other opportunities for growth and innovation. This dynamics can be obtained via events, in-company training, publications, HR activities or internal networks of information. Information dynamics needs to consider the active participation of employees and collaborators, with enough room for trials and testing of new initiatives.
One strong learning from this and other co-creation labs and sprints is about the power of horizontal interactions between stakeholders, clients and users and how it can create an improved space for better negotiation of terms and conditions for every transaction and supply. These interactions do not have to necessarily happen simultaneously but constantly making emphasis in transparency of information and improvement of practices and processes. Here lies the key for understanding from a different perspective tools for offers and requests, terms of payment and supply, selection criteria, etc.
During the USAID Momentum Co-creation workshops, several challenges raised under the premise of developing self-reliance in developing countries. This framework sets the territory for the different stakeholders of the Momentum program to work together in order to offer the agency non-centric visions to deploy the resources. It was key to address and resolve
A breakup with the usual roles: this is one of the hardest things to address, our professional roles and our earned position in a hierarchy pretty much define our identity and none is open to negotiate this. Nevertheless being open to explore other people’s point of view via empathy will not do any harm and being able to relate to other from a new open perspective will provide us with a perspective we never had before, that can make a change.
Creating confidence in collaboration: corporate and client-supplier language protocols tend to establish the limits of what can be spoken or discussed and what cannot. Creating a bigger space for the unspoken and securing no reaction to the things we normally don’t tell, enhances the space for confidence and reveals both challenges and opportunities, that can be addressed in a collaborative way. Fear is the worst enemy of shared growth and exchange.
Establishing new teams to capture dynamics and relationships: It is true that we like to work with people who are compatible to us and this connection is very important. But more important is be able to exchange and listen to those who are critical to our work or just work in a different way to ours. That is where real learning opportunities arise and where new synergies can be conformed. Rotating members of established team not only refreshes the conversation but also releases the team from routinary rites and roles.
Exploring viability and accountability of new proposals. New ideas and partnerships are always exciting and our main fear is that they might not be viable because they are new. This is a common misconception. Good News is not all innovative things are unviable and even many of them may find the support of new partners and stakeholders that share both the risk and the enthusiasm. So, exploring the viability and accountability of new proposals means working hard to make the happen, not trying to find a way to make them impossible because they are new.
Creating solid evolved consortiums and partnerships that are more horizontal, collaborative and less afraid of adopting new hierarchies, roles or styles of collaboration has been the key for a very successful process with USAID Momentum.
We hope this can happen in your company or organization too very soon!