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Procurement Perspectives: Organizational performance needs continuous improvement

Stephen Bauld
Procurement Perspectives: Organizational performance needs continuous improvement

The performance of any organization itself must be continually evaluated at each operational level.

Individual assessment looks generally at the question of whether people are doing things right.

Organizational evaluation is more concerned with whether people are doing the right things.

Over the short to medium term, organizations must focus attention on whether interim targets are being achieved and whether performance in doing so is continuously improving.

Large private sector companies regularly review purchasing policies as an example and are constantly looking for ways improve process to achieve cost saving initiatives.

In principle, there must be some point at which efficiency in attaining goals tops off. However, this point is unlikely to be attained immediately by any organization.

Therefore any plan of action should incorporate some mechanism that looks towards improving the process of implementing strategic goals.

A comprehensive process of performance evaluation encourages all members of an organization to improve their efficiency. The management of efficiency can be challenging in certain contexts.

For instance, a police force that issues a higher number of traffic tickets per police officer is not necessarily more efficient than one that has less, nor is a fire department more efficient because it handles a higher number of fires per person per year.

For many types of organizations, prevention is as or more important than cure.

The evaluation process goes beyond top-down dictation and control. Equally important is to determine whether the existing resources that have been committed to each aspect of operations are adequate. Even the best manager will fail if not supported by adequate resources.

Where insufficient resources have been provided, they should be strengthened so as to meet the identified need. Performance expectations also need to be critically evaluated. If too high, they may be adjusted to bring them into line with what the organization (and its stakeholders) can realistically expect.

To have any benefit, evaluation must be linked to some process of improvement performance. Systematic review of operations allows the identification of best practices that can be exported to other parts of the organizational operations.

It must also allow intelligence to be passed from one part of the organization to another. Evaluation can be used, as is typically the case in bank internal auditing, to confirm adherence to prescribed procedure. However, continuing improvement in efficiency is furthered where the evaluation process fosters innovative and effective solutions to problems encountered in implementing the objective.

As well as ensuring compliance with organizational policy, and consistent effort to promote defined goals, an equally important issue in evaluation should be to determine those innovations that work best.

As in the case of individual assessment, any process of organizational performance evaluation must be balanced and fair. It must recognize accomplishment as well as failure and record strength as well as weakness.

It must facilitate future planning as well as measure the success of earlier initiatives.

The ability to assess and evaluate entails sizing people up. A manager must identify people who can be trusted and those who cannot and assess the extent to which a particular individual can be given responsibility, along with the type of responsibility that this person can handle.

A leader must be able to assess the strengths and weaknesses of those with whom the leader deals within and outside the organization, to gauge how they will respond to pressure and interact with others and the effect that they will have on others.

A key aspect of performance evaluation is to examine critically the decision-making process, including the questions of those who are involved in decision-making. All leaders require support.

Division within the chain of command presents obvious danger to any organization. It is therefore understandable for leadership to look for those who will provide them with support when selecting their advisers in key management positions.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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