Matthew Taylor On Social Procurement & Making A Big Difference In People’s Lives

Matthew Taylor is a collaborative and compassionate leader and advocate who works across sectors and disciplines to bridge the divide between policy and practice and drive social innovation and entrepreneurship. He is committed to individual and collective action to create a more just, inclusive and sustainable world.

Matthew is a Policy Manager at the Department of Treasury and Finance. In 2018, his primary responsibility was implementing Victoria's Social Procurement Framework, which puts social and sustainable outcomes at the centre of government procurement activity. He is also the co-founder and managing director of MET Designs, a design collective that creates beautiful, quality products inspired by reading and ideas. As a not-for-profit social enterprise, MET's profits support literacy programs that empower kids to reach their full potential and write their own story.

In addition to social innovation and entrepreneurship, Matthew is also passionate about education, arts and culture, community-building and civic participation. As a member of the Global Shapers Community, Matthew aims to empower young people to play a more active role in solution building and policy-making to address local, regional and global challenges.

Matthew provides strong insights into a $600 billion dollar social change opportunity and Victoria’s Social Procurement Framework, whilst sharing his journey and lessons from creating a social enterprise called MET Designs.

Highlights from the interview (listen to the podcast for full details)

[Tom Allen] - Could you please share a bit about your background and what led you to working in government and the social enterprise sector?

[Matthew Taylor] - Last year my career path shifted suddenly and significantly. I was working on the Banking Royal Commission as a Commercial Lawyer, and also moonlighting in the social enterprise and not-for-profit sectors, when I decided to join the Victorian Government as a policy advisor to help develop and implement their social procurement framework. So it was a really huge turning point for me, and probably one that might be better described as a hard pivot or a hand brake turn. So over the past year I've found myself reflecting on your question, primarily because people seem more interested in my answer than ever before. I've also tried to carve out time to take stock, something which takes more and more effort and restraint in this busy world of ours.

And, on reflection, one thing I've observed is that we play out our lives like the reader of a good crime novel. We get to the final chapter, and we witness the big reveal, we discover who's done it, and experience that glorious sense of resolution and relief from the suspense. And suddenly you look back at all the preceding chapters and you notice all of those clues that the writer carefully littered throughout the chapters. The clues were there all along in black and white, you experienced them only moments before, but now the evidence is obvious and unignorably so.

So what have I started to recognise about my personal journey in retrospect about this turning point? Well, I began my professional career as a commercial lawyer, specialising in regulatory investigations, and enforcement proceedings, anti-competitive conduct, consumer protection and regulated industries like electricity and gas. And over time I became increasingly aware that all of those areas of law had really strong foundations in public policy. And in particular economic policy and the functioning and regulation of markets. And having studied economics, finance and law during my Uni days, this should have been pretty obvious to me much earlier in my career. Basically this realisation led me to start entertaining the possibility of working in public policy, or politics even, should an interesting opportunity present itself. But, given the recent political climate in Australia, I didn't really have high hopes that such an opportunity would arise. And at the beginning of my legal career, I was actually exposed to alternative business models and social entrepreneurship. One of the corporate partners was providing pro-bono advice to restructure a well-known social enterprise.

I also studied economics and finance when Lehman Brothers collapsed, which marked the beginning of the global financial crisis. That caused a lot of soul searching on my part, and I even ended up taking time off commerce to really think about whether it's something I wanted to continue with.

And I guess that given my general lack of comfort with conventional economic wisdom, when I was exposed to these alternative business models, I really gravitated towards them and these different ways of thinking about business and the way the economy can and should work.

And then a couple of years later I basically came off the back of a really significant trial at work and I became really sick. And when I recovered from that bout of sickness, I became sick again and again, and it was really happening far too often. And I pushed through many months of symptoms at work, and finally accepted the advice of my doctor to take extended leave and let my immune system recover. I guess I can't describe it any other way than it was a stark realisation that, having buried myself in my work, I'd really failed to realise that among other things I’d even gone through a bout of glandular fever.

So that was a really low point in my life, and whilst I was on leave I spent a lot of time immersed in the passions that had really taken a backseat during my legal career. So mainly reading, writing and art. And one day I was sitting in my favourite café in Melbourne, and amply caffeinated, and I was reading through Kafka's Metamorphosis. It probably wasn't the healthiest thing to be reading whilst on sick leave, but out of nowhere I came up with a design concept inspired by classic literature, and that led to the start of my business. And it was really my passion for reading and the transformative power of education that transformed that design concept and idea for a business into a social enterprise concept that would be an opportunity to dedicate the profits of the business to ensuring that all kids grow up with the ability to read and write.

At the time, creating designs inspired by reading ideas for people who loved to read and write, and then using those profits to help others learn to read and write, seemed like a perfect business idea and a perfect reason to start one. So a few friends of mine came together to move the project forward, and we ultimately raised over $13,000 through a crowdfunding campaign on Pozible. So that's really how I entered the social enterprise sector, and that continued on with increasing involvement in the sector over a number of years while I was practising law. And it was through my involvement in the social enterprise sector that I came across the fascinating concept of social procurement.

In 2017, I was fortunate to receive bursary funding to attend the Social Enterprise World Forum in Christchurch in New Zealand. One of the central topics of that conference was social procurement, and the opportunities it would provide for the social enterprise sector. And at that time there was a lot of interest in Victorian Government policy, and in particular it's social enterprise policy, which really was an Australian first. And buried in the detail of that strategy there was a policy commitment to develop a social procurement framework. People were talking about this at the conference, but it really wasn't clear whether the framework would be limited to supporting the social enterprise sector.

When I got home to Melbourne, I continued to research social procurement policy and practice. And a few months into the Banking Royal Commission, I became aware that the Victorian Government was developing and implementing an ambitious social procurement framework. So, in quite roundabout circumstances, I found that inspirational opportunity to work in public policy, and I went for it. A month later, I was no longer actively practising law.

What a big change to your career, but it sounds like it's been a natural path…

Exactly, and I guess I come back to a quote from Steve Jobs that, ‘you can't connect the dots looking forward, you can only connect them looking backwards.’ And my passion for reading and philosophy and ideas, my development of the social enterprise, my legal experience which lends itself and is really transferrable to public policy, and then some really great and I guess lucky circumstances to be exposed to particular ideas at the right time, and that pulled me toward the public policy path. So you can only really realise these things in retrospect. But that's how things came together.

Victorian Government representatives from the Victoria's Social Procurement Framework launch on 26 April 2018.

You mentioned just now the Victorian government’s launch of Australia's first whole of government commitment to social and sustainable procurement. So having worked in that space for a little while now Matthew, what do you believe are the key steps that other regional governments need to take to help foster and support this innovative social sector?

There's quite a few steps that can be taken. The first step is to understand the scope of the opportunity. I think the initial observation I'd make is that “social and sustainable procurement”, whatever it's called, can do more than support an innovative economy or social sector.

In Australia alone, social procurement's been described as a $600 billion social change opportunity. So the first and most important step for other regional governments is really awareness about the scope of this opportunity.

They need to understand what social procurement is, and how they can take advantage of the opportunity.

If you aren't too familiar with what social procurement is, it's when organisations use their buying power to generate social value above and beyond the value of the goods and services that are being procured.

Beyond minimising adverse impacts of our supply chains, on people and planet, social procurement is the intentional and strategic use of procurement processes to deliver positive outcomes and unlock value in supply chains. In other words…

By making small changes to the way that we approach procurement, we can really make a big difference in people’s lives.

Public and private sector organisations have the power to make these changes. Primarily because they have significant buying power. And that's where this $600 billion figure enters centre stage.

In the public sector, for example, approximately 30% of all the revenue that governments earn is spent through government supply chains. So last year, in Victoria alone, government procurement activities totalled around $27 billion dollars on goods, services and construction. It's a really momentous figure, and that represents everything from really small routine purchases of catering for external functions, to the major infrastructure projects that dominate the headlines, such as Melbourne’s Metro Tunnel. And then in the private sector spending through the supply chains is even more prominent. The International Organisation for Standardisation for example estimates that private sector organisations typically spend more than half of their entire revenue through their supply chains.

The key takeaway here is that the public and private sectors are really major drivers in our economy. With the amount of money actually being spent through their supply chains, there can't really be fairness or inclusivity or sustainability in our economy in our society without these very organisations ensuring that fairness and inclusivity and sustainability is achieved through their supply chains.

So what advice then would you give to these corporate or government buyers to incorporate social enterprises into their supply chains?

Understanding the purposes of social procurement is a really good starting point. Social procurement is really not a new concept. There's a growing body of evidence dating back decades or even hundreds of years. There's also a growing national and international focus on the strategic use of procurement functions to deliver social, environmental and economic outcomes. So governments are understanding why you would engage in this policy development process. There's increasing recognition that it’s a really important tool for governments to leverage their purchasing power, and increase the value of taxpayer dollars. This allows them to achieve broader public policy objectives, to increase opportunities and expand markets for social benefit suppliers, such as social enterprises, and also influence mainstream suppliers to prioritise social value creation. Then above and beyond that, there's also diversity in supply chains that helps drive competition, promote innovation and also provide all suppliers with a full and fair opportunity to compete.

On the other hand, there's also reasons why the private sector is engaging in this conduct, and understanding why they're interested in social procurement will really help this along. This comes down to improving brand reputation and controlling supply chain risks, developing stronger, more reliable and longer lasting supplier relationships. Developing more innovative and sustainable products, that result in increased sales, and even improving rankings in CSR and green financial indices and databases and delivering cost savings.

So really there are a host of reasons to engage in social procurement for both public and private sector organisations. And understanding exactly what those drivers are is the perfect starting point. And from that position of understanding, then organisations need to understand what social value means in their circumstances, and this is something that can mean very different things, depending on the organisation. In the Victorian Government context, it means achieving one of ten objectives that are actually set out in the Social Procurement Framework. And these range from promoting gender equality, to employing Aboriginal Victorian people and Victorians with disability, purchasing from social enterprises, all the way through to reducing carbon emissions.

Once you understand those core elements, what you're actually trying to achieve through social procurement, I think it really comes down to developing policy and committing to implementation.

Are there any countries that you believe are really leading the charge when it comes to social procurement and these policies? And if you think that there are any great countries that they're doing this, what are they doing that you think Australia or other countries around the world could adopt?

I think what's really amazing actually, having just been to Scotland for the Social Enterprise World Forum in Edinburgh, is I discovered that Australia, and in particular Victoria, is a world leader in terms of social procurement policy and practice. And this really has been through the development of Australia's first social procurement framework. But what I discovered in Scotland is that our framework in Victoria has several unique features that really distinguish it from all other policies around the world.

Firstly, it applies to all Victorian government departments and agencies. And that's almost 300 government entities. So there's really this idea that it has to be right across the entirety of government procurement.

Secondly, it applies to the procurement of all goods, services and construction. So there are no exceptions or focus on particular types of procurement. It's really looking at opportunities right across the spectrum. And to achieve this, the framework sets mandatory requirements and minimum expectations, and adopts a scalable approach that's really based on the value of individual procurement activities. Essentially, the more you spend, the greater the expectation to deliver social and environmental outcomes.

The third feature, which is really important, is it adopts a flexible, rather than a prescriptive approach to social procurement. That empowers government buyers to set proportionate and achievable requirements to deliver those outcomes, with a view to maximising social value and achieving optimal value for many outcomes.

I think the thing that I'm most impressed about and is really lacking in policy developments around the world in relation to social procurement, is that most policies adopt just one approach to social procurement. And that's what we describe as the “direct” approach, where government purchases from social benefit suppliers such as Indigenous business or social enterprises. What the Victorian framework does is extends that and says social procurement really should recognise that all suppliers, whether they're social benefit suppliers or mainstream suppliers, can help deliver these really important outcomes for society. So we also promote the “indirect” approach to social procurement, and that's where government purchases from a mainstream supplier in the private sector, and then uses the tender process and contract terms to require those suppliers to deliver a social and sustainable outcomes. So it might be, really simply, a private sector supplier agrees to adopt a family violence league policy to tackle gender inequality and family violence. Or it might be adopting targets to employ people with disability, or Aboriginal people. There's many different ways that you can work with private sector organisations, and really I think Victoria's one of the only places in the world that actually recognises this.

One last thing I'll say is that policies around the world really lack implementation teeth, and they don't take accountability seriously.

If governments are very serious about actually making sure that opportunities for social procurement are identified and pursued across the entirety of government, this is really a very large and long-term change management process.

Basically it requires all of the accountability and implementation work that you would expect from a change management process. So you need mandatory requirements to actually engage in social procurement. You need to set minimum expectations, you need to develop the right guidance materials and tools and templates to help government buyers do this work. You need to engage the supplier side of the market to make sure that they can actually deliver on these outcomes. And then you need to actually develop personal accountability mechanisms.

For example, in Victoria we have a whole measurement and reporting framework being developed to ensure we are actually tracking our progress and able to deliver and increase the sophistication of our social procurement activities over time.

There are some great insights there Matthew, and I think there's a lot to learn from what the Victorian government has implemented there. So to quickly step back, I'm curious to hear a little more about MET Designs, your social enterprise. And I know that you've got a crowdfunding campaign coming up as well. So tell us a little bit more about what you're doing there.

So MET stands for metamorphosis. It goes back to that Kafka book I was reading. And that's a single word that really goes to the heart of who we are as a business and why we exist. MET is a design collective that creates beautiful quality products inspired by reading and ideas. We collaborate with emerging artists that embody a purposeful and creative approach to materials and making. And each of our designs is an expression of our core values, which are beauty, play and growth. In other words, we take inspiration from books, quotes and big ideas, and transform them using art and design into products that tell a really powerful story. And those products include t-shirts, tote bags, jewellery, art prints and stationery products. Our profits support literacy programs that empower kids to reach their full potential and write their own story. By providing foundational language and literacy skills, which are essential for success in education and in life, our mission as a business is to change the narrative on a disadvantage today to create a prosperous tomorrow.

And I know that your listeners are particularly interested in impact. So I'll elaborate a little bit on how we actually use our profits to transform lives through education. From the beginning, we partnered with the Australian Literacy and Numeracy Foundation; an organisation that's dedicated to raising language, literacy and numeracy standards across Australia. And MET's only been trading for a short time, but after our first year we were able to make our first contribution to the ALNF’s Early Language and Literacy programme. And that innovative programme is run in remote Indigenous communities. And it equips educators, parents and community members with the knowledge and tools required to work with their own children to develop foundational language and literacy skills. As our business grows, our profits will provide the ALNF, (and potentially other organisations as well working in the literacy space), with an independent, sustainable and growing source of funding to do what they do best.

What's really interesting is the work that we're doing right now and the project we'll be launching through the crowdfunding campaign in January. Basically we’ve collaborated with another social enterprise in Australia, Words with Heart, to produce a collection of premium, sustainable stationery products. What's really amazing about this project is that, by our two social enterprises working together, we've managed to create A5 notebooks that do more for people and planet than existing products on the market. So what I would like to say is that we have re-imagined what's actually possible with producing a notebook. And that's a really big claim, but it's interesting when you look at each of the features that we're focused on and how we've aimed to not only deliver something that's beautiful and high quality, but also go further in terms of positive outcomes for people and also the environment.

Essentially, what we've done, is that we've looked at every single feature of the notebooks and we've ensured that each of those features is as sustainable as possible. We've used a really premium, sustainable, post-consumer recycled paper, we've used vegetable inks in the production. The production process of the paper is carbon neutral, and then when we come to binding and printing those notebooks we're also using renewable electricity. And even the glazing that protects the notebooks and provides them with water resistance is actually a bio-degradable substance, rather than a non bio-degradable plastic. So we've really gone across the entire supply chain and thought about the way that we can improve the outcomes for the environment of this common consumer product. The real beauty of that is at both ends of the supply chain we're achieving social impact by donating our profits towards educational programs, and the social enterprise we're collaborating with does the same.

MET-Designs-Crowdfunding-social-enterprise

So essentially what we've created is this beautiful comprehensive system of social impact. Where you've got educational benefit at both ends of the supply chain, and then sustainability throughout. And we think this is really a market first, and we're so excited to bring this to market and give people the opportunity to not only have a tool to keep people creative, but also do a lot of good through a really common consumer product.

MET-designs-notebooks-stationary-social-enterprise

I'm happy to hear that you've teamed up with Lauren Shuttleworth as well, who we spoke to a year or so ago.

I know you're an avid book lover, so to finish things off, what books then would you recommend to our listeners?

It's a really dangerous question to ask someone whose social enterprise is actually founded on a passion for reading. But given that we're short on time perhaps I can recommend a few books that will appeal to and really challenge your audience.

The first book I'd recommend is Operating Manual For Spaceship Earth, by Buckminster Fuller. Bucky, as he's affectionately known, was one of the most brilliant thinkers of the 20th century. And this book is a great introduction to his intellectual spirit, his philosophy and worldview, and some of his bold and brilliant ideas. The book poses the question of how do we make the world work for 100% of humanity, in the shortest possible time, through spontaneous cooperation, and without ecological damage or disadvantage to anyone. And that's really a powerful question to pose, and really gets us to focus on a really comprehensive and refreshing way of thinking about solving the world's problems. That's a book that's really influenced me, as has his other work.

A second book is Winners Take All: The Elite Charade of Changing The World, by Anand Giridharadas. He's an author and former columnist of the New York Times and as that provocative title suggests, he offers a strident critique of the change-making elite and American philanthropy, and a fresh perspective on solving complex societal problems. So whether you agree with none, some, or all of his thesis, I think that this book is essential reading to anyone interested in changing the world, especially those who come from an affluent country like Australia and also people that occupy a really privileged position in society.

And the last book, which I'm actually working my way through now is The Value of Everything. That's written by Mariana Mazzucato, an Italian-American economist and she's the Professor of Economics of Innovation and Public Purpose at UCL in the UK. And in this book Mazzucato returns to the really age old question of economics, of the measurement of value. She argues that economic forces affecting our daily lives are neither an ecosystem that simply requires us to get out of the way and let the markets work, nor something so complex and unknowable that we can't steer it to serve the public interest again. I find so far that her lesson for readers is really urgent and sobering. And that's to really transform our economy and avoid inevitable crises, such as the global financial crisis, and really foster inclusive and sustainable economic growth,

We really need to rethink the foundations of capitalism, rethink the role of public policy and the importance of the public sector, and also redefine how we actually measure value in our society.

And that goes back to a lot of the work I've been doing over the last year in terms of social procurement, which is really addressing achieving greater value through our spending decisions.