Kiah Consulting Founder, John Glenn, recalls the resolution of largest dispute he has facilitated. The disputed claims between public and private sector organisations totalled hundreds of millions of dollars – and the future of critical services.
The public sector team were worried about funding unbudgeted claims and continuity of services. The contractor was worried about ongoing losses and their reputation. “It became clear that the public sector was worried about historical losses and the private sector was worried about future losses,” says Glenn. “Neither wanted to fail but the losses were an insurmountable problem meaning different things to each side. Neither understood the other’s perspective.”
Glenn worked to align their interests. He helped them rebuild the contract, reduce joint costs, restructure working arrangements, and build cooperative management practices. Historical claims were settled for a fraction of the claimed amount.
Glenn, an expert in facilitating public-private sector negotiations, has seen many similar situations.
The public and private sectors often struggle to understand each other’s view, and the significant value lost because of it. “Both sides lack the experience and skills to understand how the other thinks, or don’t sufficiently value other perspectives,” says Glenn. “That invariably leads to blowouts in project costs, timelines and disputes.”
He uses a simple example to illustrate the challenge. A government client stipulated a 24-hour turnaround for freight and parcel delivery across Australia. The freight business is built around a cut-off time for next-day delivery to specified centres and later times for outlying locations. Businesses are built around consolidation, process, repeatability. Neither approach is right or wrong – but aligning perspectives avoided additional client specific processes and saved millions of dollars annually.
Glenn says that the government buyer is often rigid, formulaic and righteous. If your tender requirement is for 24-hour delivery the supplier is forced to respond to that question, or risk non-compliance and lose points in a competitive evaluation. The question shapes the answer.
A great strength of Kiah is the ability of their consultants to reframe issues so that they are considered in different ways, from different perspectives. Identifying common ground and common interests, rather than focussing on a debate over price and margin, has unlocked significant value in projects – benefitting government, industry and the community over many years.
Most Kiah team members have worked in the public and private sectors, and many have backgrounds in engineering, project management and other technical areas. “Often called in at short notice to fix complex problems and stop the bleeding, they do prefer to assist with building a firm foundation to avoid the problems in the first place,” says Glenn.
“There is little point in going through lengthy processes to ‘create value in agreements’ if you don’t also create the conditions to claim and keep it through the life of the agreement. Sixty percent of the effort is in establishing contracts, forty percent in running them. Balance the effort and don’t waste it,’ says Glenn.
Glenn talks a lot about courage. “It takes courage for leaders to invite and listen to objections that might be valuable,” says Glenn, “the courage to look at yourself, as well as others, critically. The courage to act and not avoid.” He acknowledges that Kiah isn’t for every client. They are looking for clients who are leaders, with the courage to go somewhere new, to listen not just hear, to seek advice not confirmation.
He also notes that the problems are not all on the public sector side and is surprised by this. He notes his surprise that private firms often lack knowledge about their public-sector clients. Its their job to know their client, and there is far more mobility from public to private sectors than the other way around. But they often revert to business-to-business conversation, focussing on value to the bottom line. It’s a simple view, reflecting their perspective.
Business-to-government needs to marry the value of political and social good with cost, which is a far more difficult concept.
The firm has a list of clients either side of the boundary. “We seek to provide clarity around strategic options, develop executable plans and then execute them. Critical thinking, persuasion, negotiation and influence are core capabilities needed to deliver operational excellence, project remediation and procurement,” says Glenn.
To follow their tagline, they do seem to turn battlefields into bridges, aligning perspectives and moving adversaries to collaborators.
Education is key to Kiah’s strategy of improving public-private sector perspectives with a growing range of experiential short courses designed, at this stage, principally for the public sector. Traditional business concepts are informative but not entirely useful unless applied to the public sector context of delivering a social good, working environment and cultural norms. We also know how to deliver this in an affordable, scalable, and flexible way, wherever you are – from Bamaga to Bernie.
“I have a client to thank for this,” says Glenn, “he simply pointed out that our traditional delivery was neither affordable nor met his business need to uplift the capability of 2,500 staff. I had to take some of our own advice and reflect honestly, throwing away preconceived ideas and moving to a different approach.” Glenn notes, with a bit of a grimace, that COVID accelerated the implementation! Kiah Academy was born.
The programs are practical, engaging and mix online self-paced learning with facilitated sessions, and breakout rooms with team exercises and simulations. They are backed by face to face sessions for those who seek additional coaching and more complex role-plays – once restrictions lift.
“The Insight into Industry program is my favourite”, says Glenn, “Our Insights into Industry program quickly gives public servants greater appreciation of how their peers in a private firm approach a project. When both sides better understand each other’s perspective, projects run smoother and sustainable value – across a range of stakeholders – is created and shared.’
“Our underlying premise is ‘If I understand your perspective, my perspective changes’,” says Glenn.
Take a look at the Insights into Industry program on the Kiah Academy.