Chairman, Future Purchasing
Welcome to the August edition of our FP Viewpoint, written after the conclusion
of the London 2012 Olympics. What a fortnight!
The old jibe against procurement is that we know the cost of everything and the
value of nothing.
On the former, the initial estimate for the Games was £2.4bn, and the claims that
it came in “under budget” were only due to its being raised to a final £9.3bn. Of
that, it cost £6.7bn to build the Olympic park; £1.02bn for policing and security
(alas, with a disappointing supplier screw-up from G4S); with a further £296m to
transform the park after the Games. 8.7m public tickets were sold, and the UK viewing
figures peaked at 27m. David Cameron believes that there will be a £13bn boost to
the economy over the next four years as a result of the Games. We need it!
It will be absorbing to follow the Public Accounts Committee’s reviews into this.
Equally, a considered evaluation of the procurement and programme management model
developed by the Olympic Delivery Authority and its private sector CLM Consortium
makes an interesting study. I’ll be writing a CPO Communique on this subject.
But what about the value?
I cannot remember such a morale boosting event. Any scepticism and jaded cynicism
evaporated once the torch relay began, and from then onwards the Olympics have been
a success story on an extraordinary scale. A nationwide euphoria and roller-coaster
of support rapidly got behind Team GB’s 541 athletes as they secured 65 medals, including
29 gold. There can rarely have been such a sense of national pride .... nor so many
people spontaneously bursting into floods of tears. Heart-warming stuff. I’m sure
that many young people will be more enthusiastic about sport, and the 70,000-strong
volunteer network seems to lend credence to the “Big Society” concept. Let’s just
hope there is a lasting legacy.
As ever, all views please to:
+44 (0) 7958 763159
“Next Level” Procurement Conference, Copenhagen, 11th September 2012
If at all possible, please come and participate in the conference I’m chairing in
the early Autumn. It will illustrate the conclusions drawn from the “next level”
procurement project and closely examine a wide range of practical interventions currently
being applied by CPOs in leading companies. Keynote speakers include Steen Karstensen
of Maersk, Daniel Helmig of ABB, Patrick Scholler of Alstom and Jean-Philippe Collin
Unlike some conferences, this will be a highly interactive event designed to encourage
active participation and real dialogue between speakers and delegates. I look forward
to meeting with you during the event.
Performance Lessons from the Olympics
It has been very interesting to reflect on the startling improvement in Team GB
from its miserable one gold medal in Atlanta in 1996. Over sixteen years there has
been nothing short of a transformation in performance and there are doubtless many
lessons here for everyone in the business world to learn from. Our conclusions:
Top-down focus and absolute commitment to success.
Initially there was no enthusiasm at all, even to bid for the Olympics. When that
changed there was a steely determination to win the Games and deliver them in the
right way. Unwavering resolve paid off.
Create delivery vehicles capable of delivering.
All organisations are set up for either success or failure. ODA and CLM pioneered
an innovative structure of programme management. The Elite Development Programme
and £0.5bn of funding were strong catalysts for gold. Transformation didn’t happen
without sustained investment and funding, allied with a determination to adopt radically
different ways of working.
Performance structures need performance direction.
This has been a notable feature. Highly aspirational performance regimes don’t happen
by accident. People such as Dave Brailsford and David Tanner assiduously crafted
top-class elite programmes over four to eight year time horizons. Indeed their plans
for 2016 are well under way. Each sport has already submitted its business plan outlining
the “Path to Rio”, including explicit targets and goals for medal-winning. A “no
compromise” approach rewards success and reduces funding for failure. Success readily
flows from such a regime.
Individual excellence within team cohesion.
Superlative sporting achievement appears to be a mix of physique, dedication, training
regime and the unbelievably detailed “aggregation of marginal gains”. Team GB’s performance
directors see themselves as “conductors” orchestrating a huge network of coaches,
athletes and support staff. They all know that they can’t deliver the performance
alone, so they need everyone to take responsibility for their own part in success,
both individually and within a strong team culture.
Combine mega-initiatives with micro-projects.
Top-down planning, governance, programme management and site / infrastructure construction
was a huge investment. The total success of the Games however came from the micro-planning
within 23 disciplines of the elite sporting programme. This made the difference.
Enthuse the stakeholders and get them behind you.
If you see the great British public as the primary stakeholder, then there’s been
no doubting whatsoever their enthusiasm for the Olympics. But that is in marked contrast
to earlier reactions before the Games began. Building and sustaining that enthusiasm
took conscious planning and the careful sequencing of multiple interventions across
Lots of food for thought here ... and great memories.
Procurement’s Performance Improvement
Amusingly, a lot of Olympic-speak has already found its way into business vocabulary.
I’m sure many CPOs are talking about “going for gold”, “striving for excellence”
and “podium moments”. Hopefully, for this monolinguist, I won’t have to make presentations
in French before English.
More seriously, framing a four-year strategy for procurement transformation that
really emphasises demonstrable performance improvement goes right to the heart of
what we are all trying to do. So, in that spirit, here are five selected pieces from
Knowledge Hub echoing that theme:
Performance improvement starts with assessment:
“Identifying and Addressing Skills Gaps in the Procurement Team”.
Read more here >
The right process sustains performance:
“Ten Ways to Improve Strategic Sourcing”.
Read more here >
Team motivation and accountability are vital:
“Re-energising Procurement Leadership Teams”.
Read more here>
Performance outcomes frame the goals:
“Connecting Suppliers to Growth and Margin: Linking Procurement to Corporate Strategy”.
Read more here >
Transformation is definitely a marathon:
“Why Public Procurement is Central to the UK’s Economic Performance”.
Read more here >
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