Win³ – Tendering for you, your client and for the benefit of others

The best businesses for the planet are those that make a positive impact on people and the environment; businesses that give back more than what they take.

The Barrett 12 Sales Trends for 2020 Report is out now, exploring the global trends that are affecting businesses, communities and the environment. BidWrite Director David Lunn and Managing Consultant Andrew Bailey contributed to the report, offering a perspective on sustainability trends from a tendering point of view.

Read the full report at The Barrett 12 Sales Trends for 2020 Report.

Should organisations just follow the lead of their prospects or potentially take the lead and help them make better sustainability decisions?

To succeed in competitive tendering sellers need to follow the lead of their prospect. Winning requires understanding the client’s needs and issues and aligning the offer to suit. This also applies to the client’s social responsibility / sustainability objectives and initiatives.

Optional or additional offers from sellers to improve social responsibility outcomes for their clients have typically been seen as extras. But this is changing. We can see it in the types of sustainability response questions being asked in tender invitation documents from governments and large corporates which reflect emerging sustainable procurement practices like the adjacent definition.

“Sustainable procurement represents an opportunity to provide more value to an organisation by improving productivity, assessing value and performance, enabling communication between purchasers, suppliers and stakeholders, and by encouraging innovation. It is procurement that has the most positive environmental, social and economic impacts possible across the entire life cycle of goods and services.”

Australian Government Sustainable Procurement Guide and International Standard ISO 20400 2017, Sustainable Procurement—Guidance

So when, in the context of tendering, should organisations just follow the lead of their prospects or potentially take the lead and help them make better sustainability decisions?

Aligning values and building trust is essential to any market led change

The first step in engendering any change is building trust during competitive tendering activities. Buyers will always look to do business with organisations that reflect aligned values.

Fortunately in this regard the procurement objectives of governments (and government owned entities (e.g. NBN, CSIRO etc.) are generally transparent. Such objectives include safety, local content, indigenous content/ employment, ethical employment, diversity, supply chain traceability, energy efficiency, recyclability/waste minimisation, positive environmental impacts (or at least no negative ones) and long-term value/ or reducing total cost of ownership.

Larger corporate organisations, particularly listed ones, similarly know that they (and their supply chains) must exhibit the values expected by their shareholders, employees and clients. These organisations can sometimes be ahead of government policy e.g. organisations in the renewable energy generation sector investing in projects despite policy uncertainty. The annual reports of many listed companies feature Corporate Social Responsibility (CSR) scorecard sections with defined KPIs.

Both buyers and sellers can take a stand against certain practices (e.g. corruption, slavery, child exploitation, rainforest degradation, animal testing, unsustainable fishing practices) and industries (e.g. tobacco, live animal exports, coal mining) and refuse to do business with them. In most cases these actions are uniformly accepted and agreed. Other cases are not so straight forward, such as ethical positions regarding the fossil fuel industry, defence armament manufacturers, horse racing or the nuclear industry where ethical consensus is not as uniform. In such cases caution is needed to ensure that decisions are made in light of the broad range of stakeholder views.

Through competitive tendering processes buyers seek examples and evidence of how selling organisations understand and can demonstrate their shared values. Doing this better than competitors, which will usually also mean developing insight and evidence well in advance of competitive tendering events, generally leads to greater offer trust and tendering success.

Sellers can take the sustainable procurement lead

If competitive tendering is fundamentally led by buying organisations, and sustainable procurement really involves aligning to ‘them’, how can sellers lead or influence buyers (clients) in social responsibility areas? Some possible areas include:

  1. Influencing during capture (pre-bid). Business developers and sales people might include social responsibility issues in their positioning discussions and seek to influence what the buying organisations may aspire to and the benefits that can be derived as a result. This in turn might influence tender weightings, scope or specifications in that particular seller’s favour.
  2. Influencing during multi-stage procurements. Where the separate competitive tendering steps present opportunities to hone social responsibility ideas.
  3. Demonstrating Innovation. Most tender invitations seek ‘innovative’ solutions and ideas. ‘Innovation’ is generally not defined and so opens up significant latitude to show social responsibility innovation and longer term thinking that may resonate with buyers seeking to improve in this area.
  4. Using Market Led Proposals. All State governments have policies regarding market (proactive) proposals. Whilst some sources suggest market led proposal success has been limited, there have been some very large infrastructure project successes, including the $5b+ West Gate Tunnel project won by Transurban. Pitching to state government social responsibility objectives using this mechanism could be an extremely effective work winning approach.

When to be cautious about taking the social responsibility lead

There are circumstances when seeking to influence the social responsibility outcomes of buying organisations may not be beneficial to tender success. Such circumstances include:

  1. Unclear social responsibility position. This can be evidenced by undisclosed or vague tender evaluation criteria – especially in relation to the client’s social responsibility position.
  2. Likely diverse stakeholders and decision maker views. In most competitive tendering activities multiple individuals evaluate offers and collectively then form overall value for money assessments. So if you anticipate diverse social responsibility views you may end up alienating individuals, to overall evaluation detriment, if your position is misaligned to theirs.

In all cases be true to your own values -but judge carefully whether your social responsibility initiatives and achievements are also a tendering strength or discriminator.

Of course competitive tendering is as much about sellers selecting the right customer as it is about buyers selecting the right supplier or contractor. If your social responsibility position is misaligned to your customer then a wise course will be to not tender. And if you then choose to explain your decision not to participate it might be a catalyst for change!

Supporting future prosperity

Social responsibility includes many factors. One area of growing concern is global warming. Climate science is showing with increasing certainty that industrialised civilisation is impacting global climate and creating real threats to Australia’s and the world’s long-term interests.

In late September 2019 the Intergovernmental Panel on Climate Change (IPCC), which includes 195 member nations, issued its ‘Special Report on the Ocean and Cryosphere in a Changing Climate’. In part, the report advised   on the increasing impacts to the world’s oceans from a warming climate e.g. sea level rise, more frequent and stronger storm events, and reduced ocean based food stocks. This clearly impacts Australia and its region.

Australia’s trusted science organisations, CSIRO and the Bureau of Meteorology have worked together using 40 global climate models to project the impacts on Australia to 2090. The results, consistent with the IPCC report, can be found on the websites of both organisations.

Earlier, in 2016, Australia’s defence white paper outlined the risks to Australia’s security from climate change. This has been reinforced since by various defence statements on the defence force’s ability to deal with the impacts of increased national disaster events from climate change in Australia and those affecting its island neighbours.

Buying organisations will increasingly be evolving the climate change aspects of their sustainable procurement approaches. We expect to see an even greater focus on ways to arrest or accommodate these changes. So focusing on our own and overall societal prosperity will become an even greater decision driver. Competitive tendering and sustainable procurement will become inextricably linked.

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