Best Practice Framework Series #4: HIPO Lists: Don’t get Stuck in the Planning Phase

When building and implementing your sustainable procurement program, it is easy to get caught in a perpetual planning phase. Creating a Strategy and Action Plan, updating Policies and Procedures, and mapping Staffing and Resources are all important elements of a sustainable procurement program, but they are only a portion of a high impact program. The goal when implementing a high impact sustainable procurement program is to avoid spending too much time on planning while the organization spends thousands of dollars on high-risk product/service categories.

From Planning to Doing

One of the key Reeve philosophies is building a two-track sustainable procurement program.

Track one is planning and building out the infrastructure for the program; like developing policies, procedures, tools, and a list of KPIs. Track two is implementing that infrastructure on HIPOs. Arguably, the most challenging step in an organization’s sustainable procurement program is the transition from planning to doing. This is where the High Impact Procurement Opportunity (HIPO) List comes into play.

Early on in program implementation, organizations should identify 5-10 or more high impact product/service categories and pilot their sustainable procurement infrastructure on those categories. A HIPO List helps organizations focus on procurements that have high risk or opportunity.

How to determine your HIPOs

Every organization has their own unique HIPOs, but some of the most common HIPOS include categories like fleet vehicles, construction, and office supplies. Reeve has come up with criteria to help organizations quickly and easily determine their HIPOs:

1. High risk or opportunity: As the name suggests, HIPOs are often categories that scream high risk or opportunity. These might be products/services with high GHG emissions (or embodied carbon), like fleet vehicles and/or construction materials, or products that may have forced labour in their supply chain, like textiles and electronics.
2. Spend value: The more an organization spends on a product or service, the more likely they are to have impact in that category. HIPOs are often chosen based on the 5-10 largest spend categories, which regularly (but not always) coincide with high sustainability risks or opportunities.
3. Public visibility: Another way to determine HIPOs is by assessing the public visibility of the product or service. For example, promotional products are usually not a high spend category, but they are highly visible to the public. By ensuring these products are sustainable, organizations can enhance their brand image and communicate their values to the public.
4. Upcoming bids: Many procurements are contracted for 3-5 years or more. It is important not to let these bids be awarded without sustainability considerations. Many organizations find that looking at upcoming bids is an effective way of deciding their HIPOs.

Procurement staff, as well as internal representatives who use the products/services, can help to inform categories that are high risk or opportunity. Check out our blog on Staffing and Resources to learn more about the different stakeholders involved with sustainable procurement programs.

What information goes on your HIPO List

While the main purpose of the HIPO list is to identify key product and service categories, more information is needed to help effectively implement the HIPOs:

1. Key stakeholders: who purchases the product/service and who uses it?
2. Current Initiatives: what sustainability activities currently happen in the organization with regards to this product/service category?
3. Next steps: what are actionable, immediate tasks to implement this HIPO?
4. Data sources: where is the information related to this category coming from?
5. Potential risks/opportunities: what are the sustainability risks and/or opportunities of this product/service category?

How to implement your HIPOs

Once a HIPO list has been developed, the procurement and client departments can begin piloting sustainable procurement policy, procedures, and tools on the selected categories. The two most common methods used when implementing HIPOs are:

1. Incorporating new criteria into bid documents: re-evaluate the criteria used when submitting an RFx and ensure it includes sustainability criteria as suggested in your policy and procedures. Ensure that the language used communicates aspects of sustainability that are important to the organization. This method works best with new procurements and/or when looking for new suppliers.
2. Engaging with existing suppliers: for existing contracts, supplier engagement (blog to come) can help bring sustainability criteria into existing procurements. This could take form of a supplier questionnaire.

The HIPO Cycle: From HIPO to Sustainable Procurement Success Story

Under ideal circumstances, the initial HIPOs implemented turn into success stories, which are often later used in training and communications to provide examples and inspiration to staff and stakeholders. Employees and leadership may later refer back to the initial HIPOs for guidance and motivation when implementing future HIPOs.

As procurements move off the HIPO List and become success stories, vacancies are left on the list for new procurements to fill. The movement from HIPO List to success story ideally becomes a cycle: identify the HIPO, work to implement it, transition it to a success story. Ultimately, as an organization ensures sustainability is increasingly integrated, they will have more positive impact within their supply chain.

Building and Doing

It is important to not get stuck in the planning phase. HIPOs offer a natural starting point to implement your sustainable procurement program and activate Reeve’s two track method. It takes time to build a high impact sustainable procurement program, but HIPOs can serve as a bridge between planning and execution, leading to results early on.

If you’re feeling stuck in the planning phase, or if sustainable procurement isn’t delivering the results you desire in your organization, contact us at info@reeveconsulting.com. We can provide guidance, templates, and other resources to help you effectively implement your HIPOs and develop your sustainable procurement program. Check back next month to learn about how Tools can help employees and leadership effectively enable your sustainable procurement program.