Tuesday, 13 April 2010

Invitations to tender can suppress leadership

I am sometimes invited to submit a competitive tender for work, for example to run workshops. I nearly always decline – for three reasons. Firstly because of the costly inefficiency of a bureaucratic process that can waste considerable time for both parties. Secondly, the assumption that it is acceptable for multiple bidders to apply their creative effort in the knowledge that all but one will fail. Thirdly because of the poor quality of inter-personal connection, the game playing and second-guessing.

The challenge of obtaining value for money for the buying organisation, in an efficient and respectful way, which acknowledges the needs of the suppliers as well as the buyers, raises several issues about leadership.

Eastern cultures tend to prefer to develop reliable relationships with a small number of suppliers over time and stick with them. But this can work against novelty and new entrants. A case can be made for competitive tendering when it applies to purchasing commodities such as stationery. But it works badly when buying intellectual and creative contributions. Centrally organised purchasing departments can fail to make this distinction and be excessively driven by cost and uniformity of process.

There is something fundamentally wrong with a model that separates people into two groups: those who identify, understand and specify a need, and those who are then told what this need is and are asked to deliver against it. The approach is reminiscent of the division between head-office managers whose job is to think up strategies for front-line workers to implement. Or between systems analysts and computer programmers, which finds the latter often rejecting the former’s specification.

The same is true when it comes to human systems in organisations. Commercial imperatives may dictate that suppliers need to bite their tongue and comply with the buyer’s requests, but privately they may have misgivings about the buyer’s analysis. They may resent being kept at arm’s length from the organisation’s problems. They may want to challenge the buyer’s basic premise. They may have unrecognised expertise beyond that being sought. Once suppliers have landed the contract they may seek to reshape their offering, having kept this intention hidden initially.

How can this situation be improved? The aim of both parties should be to strive for authenticity, the minimalising of power differentials, the maximisation of trust between the parties, and a sense of partnership in matching problems and emergent solutions. There is only one way to do that: it means sitting down and spending time together, before specifications are hardened up, paperwork completed, and sums applied. If this kind of dialogue doesn’t take place at the outset, the strain, game playing and inauthenticity may remain during the period of delivering the contract.

In The Search for Leadership I discuss two possible mindsets behind inviting competitive tenders; one exhibits a managerialist approach and the other a leadership approach. In the case of the latter, the manager asks him/herself questions about the current tendering practice, including: ‘Why am I continuing to do what I am continuing to do the way I am continuing to do it?. What values and assumptions are driving the approach? What is being done merely out of habit?’.