Heathrow CPO Ian Ballentine is a man with an unusual ambition. He wants to make himself disappear. Not permanently. And not from all areas of his life. Just from his work.
As procurement director at Heathrow, Ian Ballentine is the man charged with putting the supply chain in place ready for building a third runway, if or when the project gets the go ahead – the decision having been delayed once more by the UK government in December.
His performance is judged on a combination of hitting savings targets – the business has achieved op-ex savings of more than £40m in the current financial year and is on course to save £280m by 2018 from 2013 figures – and feedback from his own team, internal customers and suppliers around procurement’s broader contribution to the business’s objectives.
“Of course I would say I’m value for money,” he laughs. “I always say my purpose in a business is to no longer be required, which means you go in there, make changes and empower the people around you. That’s what I’m about.” It’s about enabling his team to become so confident that he can become more hands-off.Ballentine’s career has seen moves in and out of procurement, notably at Thames Water where he went from heading up the procurement function to become its engineering programme director. As programme director at Network Rail he was given 12 weeks to identify savings to bridge the gap between its allocated funding and the amount it thought it really needed. “I led that project for 18 months and we delivered £3.1 billion savings,” he recalls. “That was monumental.” When the business relocated to Milton Keynes, though, it was time for another change, and he headed off to Thailand. “I spent two years travelling and just enjoying my life,” he says. “It gave me a very different perspective on work.” It also gave him the platform to return refreshed for his current role at Heathrow in late 2012, arriving in time to see through the massive project to demolish and rebuild Terminal 2.
When he touched down at Heathrow, he struck a deal with the then chief executive, who offered him a place on the board if he could reshape procurement within a year and demonstrate what it can make possible in a business. In November 2013 he was appointed to the organisation’s executive committee. This has been mutually beneficial, he says; helping to put procurement at the centre of the business but also making him understand how the function can impact customers and staff.
“If you’re spending several billion pounds with the supply chain each year, there’s a huge amount of opportunity to drive great value,” Ballentine says. “But it’s not just on price, but value in terms of performance, and whether or not the people out in our terminals are smiling and engaging passengers, rather than looking down at the floor.”
He firmly believes that procurement can add value beyond the bottom line by keeping staff happy and motivated. He is keen to stress the importance of an enjoyable working culture among his team of 65 – soon to grow to 77 in anticipation of the third runway going ahead. “We’re quite a young team with a lot of people in their late 20s or early 30s,” he says. “There’s a lot of energy so we’re not a quiet crowd.”
He even recounts one occasion when the chief executive looked up to see Ballentine standing on a chair throwing a paper aeroplane across the room. “We were having a competition to see who could throw it the furthest,” he recalls. “It’s just having fun with the team, because they work hard. ” Heathrow, already Europe’s busiest airport by passenger numbers (on a typical day, 201,000 people arrive and depart from Heathrow), is working on the basis that it will, eventually, have a third runway, and procurement is helping to lay the foundations that will allow it to react quickly if – or when – it gets the go-ahead.
“We’ve already put out a tender to bid for the work for our client partners and, come February, I will have an organisation and a client structure ready to go,” says Ballentine. “If we’re getting positive messages, we can move to having a dedicated team here and bring in the client partners at the speed in which we need to.”
The team has been engaging with suppliers – including encouraging them to publicly back the proposed project – and making provisions for just how it would deliver the £16bn programme.
One particular challenge, says Ballentine, will be thinking about ensuring its supply chain partners – the main tier-one companies who will be the project’s main contractors – have access to the construction and engineering skills they need, in the face of competition from other major projects including HS2 and the Thames Tideway.
The answer to this, believes Ballentine, lies further north, with the Northern Powerhouse project and Scotland, where Heathrow Airport would look to co-ordinate a supply chain to construct semi-finished products which could then be put together on-site. “To deliver this project, we could potentially have about 15,000 people coming on-site,” he points out. “Doing a lot of the sub-assembly off-site means we only need around 10,000 on-site. We’re working with the supply chain to see what different skills are required.”
Around 180,000 jobs could be created by the third runway, generating £211bn for the UK economy, according to the Airports Commission.There has also been a push to bring together smaller suppliers and larger first or second-tier partners, at regional events in Scotland and Leeds, aimed at encouraging different ways of thinking.
“I love what Heathrow wants to become,” says Ballentine. “The bigger the challenge, the more exciting it is.”
Ian Ballentine’s six-point plan to ensure Heathrow has a smooth business trip
1. Develop the capabilities of the team itself
2. Engage the wider business with procurement
3. Identify long-term market strategies and shaping contracts accordingly
4. Engage strategic suppliers in mutually beneficial relationships
5. Improve day-to-day contract management processes
6. Ensure the team itself has the right back-office set-up to run effectively
Part of this involves running regular conferences with Heathrow’s top 50 suppliers, who account for 80% of spending, and an awards ceremony to recognise performance in each of the six areas. Major spend categories, include air traffic control, baggage and passenger systems, electricity, and facilities services such as cleaning.
“I’ve got sponsors for these six areas, and project leads taking on all the different elements of change. My team are doing it all and finding the headroom to put in place this change, because it’s creating an exciting future for them," Ballentine says.