Dr Natalie Paleothodoros, Lecturer in Business Management, St John Business School

Towards a good practice model of procurement: Learning from the role of procurement practices in the attempt to tackle poverty

Dr Natalie Paleothodoros, Lecturer in Business Management, St John Business School

Dr Peter Watt, Lecturer in Business Management,York St John Business School

Robert Garvey, Professor of Business Education, York St John Business School

Jeff Gold, Professor of Organization Learning, Leeds Beckett University

Dr Dave Devins, Principal Research Fellow, Leeds Beckett University

Dr George Boak, Senior Lecturer in Leadership and Management, York St John University

Corresponding Authors

Stream 6: Organisational Development and Organisational Learning

Submission Type: Working Paper (Please do not cite or circulate)

Abstract

Purpose:

The purpose of this paper is to begin to describe, analyze, reflect and ultimately understand the processes (the limitations and potentialities) by which organizations learn via the facilitation of Appreciative Inquiry as part of a wider project concerned with working with Anchor Institutions to help alleviate poverty in the Leeds City Region.

Design/methodology/approach:

The paper reports on participative fieldwork based on participative enquiry with Leeds City Region (LCR) anchor institutions as a mode of action research concerned with local and social change research. The purpose of the methodology is to create a platform whereby anchors in the LCR can learn about their practices and develop an understanding of their potentialto play an active part in thereduction of poverty in the local area.

Findings

The paper offers primary insights into the tensions involved in accomplishing sustainable procurement and the way in which anchor institutions can learn and develop through appreciative inquiry as part of that on-going accomplishment.

Research limitations/implications

From our findings we are interested in their pragmatic application (‘what works’ where, why and how) in tackling poverty, and from this what principles can be applied to wider themes of organizational learning in large organizations.

Practical and social implications

This paper contributes to ongoing understandings of the practice of action learning. In particular, the implications for practice lie in both the tackling of poverty by establishing a model for good practice in sustainable procurement and the implications of this for organizations to learn and develop their own practices in a sustainable and socially responsible way.

Keywords: Procurement, Poverty, Anchor institutions, Organisational Learning

Introduction

This working paper is a preliminary reflection on a project that seeks to investigate the impact, response and effectiveness of appreciative inquiry (AI) on procurement best practice. To do so, this paper draws on notions of ‘sustainable procurement’ (Walker and Phillips 2009; Walker and Brammer 2007; Walker and Jones 2012) in order to explore the relationship between poverty reduction in the Leeds City Region (LCR) and the practice of procurement in ‘anchor institutions’.

The paper forms part of a wider investigation (funded by the Joseph Rowntree Foundation (JRF) into the interrelationship between recruitment, employment and procurement practices and the consequences of them for impacting poverty in the LCR. For this paper we are focusing on procurement, as we deem it an area that has been largely sidelined in recent studies. As a response to this, this paper emphasizes the importance of the role of sustainable procurement practices as having gained legitimate attention in recent years following the 2007 Local Government and Public Involvement in Health Act, the 2008 Sustainable Communities Act (HMG 2007; 2008) and most recently the Social Value Act 2012 (which became law in January 2013).

Map of Paper

We begin with a brief overview of anchor institutions before considering key points relating to procurement. We thenoutline and reflect on the methodological approach undertaken in order to address the overriding issue we are concerned with, and outline the story so far in terms of findings, challenges and limitations, before drawing some preliminary conclusions and outlining how the project and the methodological developments might proceed.

Anchor Institutions and Sustainable Procurement

While a relatively new idea in the UK, in the US the term ‘anchor institution’ has gained growing recognition. Mauresse (2007) suggests that they are the ‘civic, cultural and intellectual institutions which contribute to the cultural, social and economic vitality of cities’. Through their size and presence such institutions are likely to be play a vital and impactful role in terms of employment, revenue-generation and, especially relevant for this paper, their procurement, commissioning or spending patterns (PIUR 2010). Anchor institutions can include organisations such as universities, hospitals, colleges, local authorities and public services such as the Police. They can also include larger private sector organisations although, as suggested by Dubb and Howard (2012), such organisations are not ‘anchored’ to a specific region in the same way as public and semi-public institutions, as they are likely to relocate because of the attraction of lower costs, subsidies and the avoidance of regulation.

As suggested by the title ‘anchor’, such institutions are important to a region because they are likely to be ‘anchored’ in that they are very unlikely to move away from where they are located. For example, York City Council has to remain located in the City of York. As such, through their presence and influence, they have a significant potential to influence local poverty through their practices in recruitment, employment and procurement. The Work Foundation (2010) argued that cities need to make the most of their anchor institutions as they can play a significant role in the alleviation of poverty at a local level and procurement seems to be a good starting point. As a recent report from Newark, New Jersey (Zeuli et al. 2014) shows, anchor institutions were able to move over $400m of procurement to local purchasing.

In recent years the concept of sustainable procurement has gained attention to focus on both environmental and socio-economic considerations as part of a movement to promote decisions to meet the Triple Bottom Line (Meehan and Bryde 2011).In the UK, the recognition that, given the size of expenditure by central and local government, procurement can play a role in bringing wider benefit to society beyond the provision of services. In 2006, the Government defined sustainable procurement as:

… a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis, in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment (HM Government, 2006, p. 10)

Since 2006, various pieces of legislation have sought to promote sustainable procurement including, most recently, the 2012 Social Value Act.

Project Background and Methodology

The project is based on a call for proposals commissioned by the Joseph Rowntree Foundation which sought to develop an action research project with anchor institutions with the aim of reducing poverty in LCR. The two central components of this project are ‘poverty’ and ‘anchor institutions.’ The first is the ‘issue’ or ‘problem’ on which the action research is directed, and the second is the focus through which the issue can potentially be addressed. This has lent itself to two strategic moves which are needed to be brought to attention from the outset of this paper, in our focus on the relationship between action researchers facilitating the means by which anchor institutions can help alleviate poverty in the LCR. As stated above, the ‘problem’ (poverty), ‘means of resolution’ (Action Research) and the ‘actors’ (anchor institutions) have all been identified by the third-party who are funding the project. As such, both the definition of the problem and the means of its resolution have been defined from the outset, and therefore have guided our design for the project. The initial call for proposals read:

‘Anchor institutions have an inherent stake in a particular place and are the biggest spenders and employers in the local economy… We are interested in the procurement, recruitment and employment (wider HR practice/management) processes of local anchor institutions and how these could better address both out-of-work poverty and in-work poverty. Through a programme of action research … we want to assess and maximize the impact of a cross section of anchors on the local economy and on reducing poverty locally. Our overarching objective is for the anchor institutions taking part in the study to agree and adopt a shared set of policies/principles, which guide their procurement, recruitment and employment practices.’ (Bold added)

Although these details from the call for proposals give a sense of the overall agenda, it is key to note that in terms of definition (of issue, potential solution and methodological means by which these former two aspects can relate) JRF have set the parameters (emphasized in bold above). What is important to note here is that although the ‘action research’ aspect of the project is the methodological means by which these two components can be brought together, the project was developed by an early and specific identification which came via JRF. This has lent itself to a particular view of what ‘poverty’ is (how it is defined), and, naturally, the limitations and methodological scope by which the chosen means can stake themselves in the process of this issue’s alleviation.

As a methodology, Action Research is well-known among those seeking social change, following the influence of Kurt Lewin (1946) who referred to a ‘circle of planning, action and fact-finding about the result of action’ (p.38). Others such as Kemmis and McTaggart (1988) suggest a cycle as ‘plan, act, observe, reflect’ (p.11) and while others have presented variations of this, the notion that in the face of a difficult social and cultural phenomenon, we need iterations of action that are informed by understanding drawn from theory. As Raelin and Coghlin (2006) have recently suggested, action research ‘intentionally merges theory with practice’ (p.676). While we are happy to subscribe to action research, we were also able to extend the scope of the approach via the use of what are called the ‘action modes’ of research (Raelin 2015) which can include methodologies such as Cultural Historical Activity Theory, Appreciative Inquiry and Action Learning Research. Our plan was to draw upon such methodologies as appropriate but to bring representatives of anchor institutions into an action learning set. This would be our core group, and Figure 1 shows the approach to form this group and our intentions to work with the group. The inquiry encompasses an exploration of the recruitment, employment and procurement practices of anchors in the LCR and the consequences of those practices for poverty in the local area. The question that the research is concerned with relates to the way in which the LCR makes the best use of anchors to address poverty at a local level.

Figure 1: Design of the Project

In order to identify anchor institutions in LCR, we set some basic criteria relating to size, numbers employed and length of time located in LCR to reflect their ‘footprint’ on the region and likelihood to remain. Through a range of contacts, we sought to ensure the backing of the most senior manager, who could then introduce between 4-6 other managers who would act as the strategic group for the project. They would also set an intent to reconcile their expectations with the aim of the project and find a member for the core group.

To start the project, we proposed to work with the core group to conduct an Appreciative Inquiry which is rooted in traditional notions of action research, with a particular focus on appreciating what works in procurement (in poverty reduction), rather than what does not.

Copperrider and Whitney (2005) outline the underlying principle of AI:

‘The infinite human resource we have for generating constructive organizational change is our collective imagination and discourse about the future. One of the basic theorems of the anticipatory view of organizational life is that it is the image of the future, which in fact guides what might be called the current behavior of any organism or organization. Much like a movie projector on a screen, human systems are forever projecting ahead of themselves a horizon of expectation (in their talk in the hallways, in the metaphors and language they use) that brings the future powerfully into the present as a mobilizing agent. To inquire in ways that serves to refashion anticipatory reality—especially the artful creation of positive imagery on a collective basis--may be the most prolific thing any inquiry can do.’

The assumption of AI can therefore be understood in terms of positive images of the future leading to positive actions(Copperrider and Whitney 2005).

The purpose of the inquiry isto initially unpack procurement practices in order to identify barriers to CSR and the triple bottom line. By doing so the anchor institutions are active in a process whereby they discuss, learn and develop solutions to barriers together by focusing on ‘what works’; i.e. appreciating‘what works’, how they can learn from each other about ‘what works’, and implement best practices based on ‘what works’.

Methodologically, this carries particular significances, amongst others, in relation to the enrolment of actors. The significance is twofold: firstly, in relation to enrolling anchor institutions to partake in the research and secondly, in the enrolment of further actors. There is a arguably a significant difference between approaching an organization and asking them to partake in research looking at what they do badly in relation to procurement and what consequence that might have for poverty, and asking them to partake in research looking at appreciating what they do well and what others do well in order to develop best practices and alleviate poverty. While we are aware that the negative aspects of appreciative inquiry (Bushe 2007) contain crucial means for understanding and addressing social issues like those we are concerned with here, by focusing on the appreciation and roll-out of positive action, anchors become likely to enroll in the project, which, in the delicate stages of getting this research underway, was our chief concern. As such, the concept of enrolment continues as the project does and anchors are asked to enroll further actors into the research process under the same premise (See Latour 1987).

The methodology intends to explore what motivates anchor institutions to take poverty into account and enable participants to make positive choices to impact on the alleviation of poverty. In relation to procurement, the inquiry is exploring what practices have a positive impact on poverty alleviation, working with anchors to build models of best practice and establish opportunities to share those models across the LCR. The purpose of the research is to create a platform whereby anchors in the LCR can learn about their practices and develop their understanding of the consequences of them for poverty in the local area.

The inquiry has been set up to encompass 5 core meetings with anchor representatives in which anchors and researchers work together to appreciate what works in procurement and the alleviation of poverty. So far, of the 5 planned meetings, 2 meetings have taken place. The next section of the paper will move on to outline the story so far.

The Story so far …

This project provides an opportunity for anchor organisations in the Leeds City Region to identify and develop innovative approaches to workforce development and procurement which can improve productivity and performance and also make a difference to the city region’s prosperity through more and better paid jobs.

Leeds Beckett Universityin partnership with York St John University has been commissioned by the Joseph Rowntree Foundation (JRF) to undertake an exciting new project which engages representatives with a responsibility for organisational change in an innovative action-oriented research project aimed at providing an opportunity for making a real difference to organisational performance and LCR’s prosperity.

Due to the ‘Action’ orientation of this research, the practical implications are inextricably bound up with the intended social implications of the work. Through the collaborative exercises of appreciative inquiry the anchor institutions that are involved in this project have thus far begun to identify, share and analyse (in terms of correlating central thematics that have emerged as similarities) current measures of procurement ‘good practice’ in order to learn from one another in order to develop an understanding of ‘what currently works well’, and what might work in addressing poverty in the local city region in the future. As such, the practical implications of identifying good procurement practices will help organizations learn and consolidate on their current practices and, in doing so, develop a procurement map by which the social implications can be disseminated and rolled out across further organizations that share the organizational, social and geographic environment of this focused case.