Better Partnering: Escaping the Procurement Prisoner’s Dilemma
“The Prisoner’s Dilemma captured the essence of the tension between doing what is good for the individual and what is good for everyone.” — Robert Axelrod
The Procurement Dilemma: Trust on Trial
We’ve all been there in procurement – both buyer and seller eyeing each other warily, each incentivised to protect their own interests. Traditional procurement can feel like a one‑shot Prisoner’s Dilemma. Each side, uncertain of the other’s intentions, takes a defensive stance. Governments issue rigid RFPs full of requirements; vendors pad timelines and costs. In theory everyone is “rational,” but the result is often a lose‑lose: projects meet the spec but fail to deliver real value.
Classic procurement rewards risk‑aversion and suspicion. It encourages defection rather than cooperation, often locking projects into long, inflexible contracts that fail to evolve as needs surface. We invest heavily upfront, only to discover too late that it doesn’t solve the real problem. That’s how innovation dies.
But recognising the hole we’re in is the first step toward climbing out. What if the procurement system itself incentivised trust, collaboration, and shared success?
A Way Out: Better Partnering to the Rescue
Enter Better Partnering – our ladder out of the procurement pit. Instead of rigid contracts, this approach invites us to collaborate with industry from the outset, finding solutions together.
Better Partnering is built on genuine collaboration. We and our vendors sit on the same side of the table, starting with a shared understanding of challenges. It’s a shift from adversarial contract negotiation toward co‑creation.
We embrace trust and shared risk. Rather than locking in multi‑year deals, we design small, funded increments—options that proceed only if proven valuable. This incremental, value‑based funding lets us invest a little, learn a lot, and decide next steps based on facts—not assumptions.
Harnessing Industry Gestalt: Solving Problems Together
Better Partnering opens the door to diverse ideas from industry. Instead of guessing solutions, we share problem contexts and invite collaborative ideation through workshops. This format encourages vendors to bring creative, user‑focused answers rather than reactive bids.
Department of Government Services (Victoria): Better Partnering in Action
With the Department of Government Services (DGS), we launched Better Partnering via a structured event in partnership with AIIA. We presented four emotionally compelling use cases—The Lonely Octopus, The 100 Day Wait, The Frazzled Employee, and The Lost Renter—each depicting realistic citizen or staff challenges.
Industry participants pitched pilot solutions against clear criteria. The result? Real innovation emerged quickly—and it resonated. As Nadine Groves vividly reflected on LinkedIn, the workshop became an “ongoing hero”, spotlighting Better Partnering as an enduring success across Victorian government innovation efforts .
How Better Partnering Works: Structure and Key Elements
Better Partnering Canvas: A collaborative artefact capturing problems, proposed solutions, and aligned action plans.
OKRs (Objectives & Key Results): Measurable outcomes co‑created to guide progress and decision points.
Iterative, Agile Delivery: Short cycles of prototyping, testing, and adapting based on early feedback.
Shared Governance and Gates: Joint decision points ensure continued funding is always value‑driven.
Value‑Based Funding: Funding released only as milestones are achieved, reducing waste and aligning incentives.
Conclusion: When You’re Unsure, Seek Options—They Carry Value
When the solution is unclear, it pays to explore options before committing to one. In the brilliant business book Commitment – A Novel About Managing Project Risk, Maassen and Matts make this point clear: “options have value; options expire; never commit early unless you know why.” This is a core principle behind Better Partnering.
Better Partnering transforms procurement from rigidity into flexible, collaborative exploration. It turns uncertainty into opportunity—not risk. Instead of writing specs in isolation, we engage with partners to discover solutions together.
If you’re not sure what the best solution is, don’t lock in early. Seek options. Test ideas. Let the best approach win. That’s how procurement becomes not a hurdle, but a source of innovation.
References
Axelrod, R. (1984). The Evolution of Cooperation
Maassen & Matts (2012). Commitment – A Novel About Managing Project Risk
LinkedIn commentary by Nadine Groves on the DGS/AIIA Better Partnering workshop and its impact