"I want to be the catalyst, not the policeman", says Daniel Cameron ©Peter Spinney
"I want to be the catalyst, not the policeman", says Daniel Cameron ©Peter Spinney

Pearson's Daniel Cameron on how to innovate

Leading change is important to Daniel Cameron, who says procurement must be a destination function – influencing and challenging decisions to drive innovation

There exists a photograph, taken as Hurricane Sandy battered New York in 2012. In it, the city’s skyline is black, the storm having taken out the power and left skyscrapers in darkness – with one exception. Only Goldman Sachs’ HQ shines bright: the lights stayed on.

For Daniel Cameron, who back then was head of EMEA procurement at the bank, the photograph is a perfect reminder of the importance of paying attention to detail. Goldman’s lights stayed on because the company’s generator was on the roof rather than in the basement, thus escaping floodwater. “It’s a testament to thinking: if you get the basics right, you can get a competitive advantage,” says Cameron. “[Goldman CEO and chair] Lloyd Blankfein has that picture on the wall in his office. You can imagine customers looking at it and thinking: ‘our money is safe with Goldman’.”

Cameron spent six years at Goldman Sachs, three as global CPO based in the UK, but in April last year he took on a new challenge, joining FTSE 100 education publisher Pearson as SVP procurement. A chartered accountant by trade, he made his first step into procurement at Cable & Wireless, via a global software implementation. With his finance background, he jokes he was “the translator from the procurement team to the CFO”.

From there, he moved to Royal Mail to lead a procurement transformation. “People told us we couldn’t do it because of the union environment,” he recalls. “We proved them wrong. We engaged the union and said: ‘this is going to be good for your members as we are going to train people and give them a real career, as opposed to just being a paper pusher’.”

In the process of transforming Royal Mail from a “contract entity to more of a commercial animal”, Cameron and his team saved in the region of £300m over three years. “It’s not always the biggest deal; sometimes it’s the thing that demonstrates lateral thinking and creativity,” he says. “The phrase ‘we’ve always done it like that’ is a dangerous thing.”

He gives the example of the bicycle used by postal delivery workers: “It was specified to the nth degree – the gears, the tyres, the braking distance… As a result, it cost £300 a bike, when you could buy a higher quality one from offshore for about £50. That was a real symbol of what we were trying to do. It was a simple thing, but the board looked at it and thought: if engineers are specifying bikes to that degree, what are they doing with multi-million pound sorting machines? It was an education process around what good procurement was.”

At Goldman, where he was leading teams buying everything from stationery to private jets, the focus was more on risk than cost, particularly the importance of knowing your suppliers, who could be handling sensitive client information. “[Supplier relationship management] is a part of procurement people don’t think about,” Cameron feels. “But once you’ve signed the deal, making sure [the supplier] is successful is part of the gig.”

It was “the opportunity to drive another transformation” and be involved in the digital agenda that drew him to Pearson. It’s no secret the company needs to change, to adapt to the challenges facing educational publishing. Earlier this year, Pearson reported its biggest ever loss – £2.6bn (pre-tax) in 2016. In January, its stock market value dropped by almost £2bn and it has issued a number of profit warnings. To strengthen its balance sheet, it recently sold a 22% stake in publisher Penguin Random House for £776m.

In May this year, the company announced a set of restructuring and cost-cutting measures; it is looking to save an additional £300m by the end of 2019 (having already reduced around £650m in costs over the last four years).

If ever there was a time for procurement to add value, it’s now. And Cameron is on a mission to build a team that can lead change rather than just take orders. “I didn’t want to pick something up that was already working,” he says.

“I wanted to take it on a journey. Having the right team is paramount to being successful. You can paper over cracks in the process if you’ve got capable people. The people bring the magic.”

One of his first steps was to rethink how procurement was structured in the organisation, which operates in more than 70 countries. Where the model used to be highly devolved, Cameron is pulling everyone in procurement together into one, focused group (“there’s real synergy in having people talk to each other about the deals they have done”).

“It’s trying to get the balance right between autonomy and getting the best from a centralised model,” he says. “We need to educate people that centralisation doesn’t mean having one vendor for everything; it means having a global strategy and approach that might result in a global, regional or local solution. We are not trying to take away control, but add value.”

Procurement is now split into three groups, he explains. The first is “almost our sales team”, responsible for finding opportunities and demand, leading categories and having deep subject matter expertise. The second is focused on operations, while the third looks after supplier relationships. Centres of excellence sit as “the engine beneath”.

The next step, what Cameron refers to as “stakeholder management 2.0”, will involve expanding the matrix to cover lines of business and geography, as well as categories. Individuals in procurement will take responsibility for markets such as North America or higher education. As the market leads will be representing all categories in their meetings, information flows must be “slick”. “It will be about listening and bringing back opportunities and risks we need to deal with,” says Cameron.

Procurement has an annual spend of about £1.6bn, an increasing proportion of which is spent on technology as Pearson moves to digital-first. With consumer habits shifting and users demanding seamless and enjoyable online learning experiences, procurement needs to play a role in connecting the business with innovative suppliers, and support idea development.

Open to innovation

When Cameron first joined he had lunch with key suppliers, asking them to share, “warts and all”, what it was like to do business with Pearson. “The overriding message was the ‘Pearson pace’, that when they came to us with ideas, innovation and opportunities, our ability to engage with and execute those ideas was not as fast as it could have been,” he says. “So one of the things we are focused on is how we can embrace ideas and take them forward. The focus is on creating an environment where a supplier feels good about bringing us the innovation and we feel good about accepting it and doing something with it, rather than putting it on a shelf to gather dust, while the supplier gets frustrated.”

To achieve this, innovation needs process and governance. “People don’t tend to think about innovation and process in the same breath, but you need a process to capture and deal with innovation,” Cameron says. “If you don’t, it falls through the gaps.”

For starters, Pearson has segmented its suppliers. But rather than focusing on spend, the spectrum runs from “is there an opportunity for this supplier to provide innovation to take out cost and make us more efficient?” to “could they drive our business and drive revenues; is it a partnership opportunity?”.

“Now we’re thinking about how we have conversations, setting up the infrastructure to have regular conversations and getting them in front of the right people [in the business],” he says. While it is still early days, Cameron is passionate about the opportunity ahead. “I would love procurement to move to a point where we are the catalyst and the idea generator, opening the door and pushing ideas – around blockchain for example – into the organisation.”

To enable the move to digital across the organisation, something some editorial teams may struggle with, procurement needs to be “a challenger,” Cameron believes. “It’s not just being the relationship builder who always says ‘yes’ to the customer. But it’s not about being a lone wolf, off doing your own thing,” he explains. “It’s being informed enough to challenge and provide recommendations, options and different ways of doing things, reframing the problem. It’s my job to engender that challenger mindset in my team and create the environment for them to feel comfortable doing that.”

He uses the example of a recent deal to move more of Pearson’s systems to the cloud, using Amazon Web Services, rather than relying on physical data centres. “The question might have been: how do we buy physical data centres cheaper? But actually, let’s not buy physical data centres at all; let’s explore the cloud.”

As it encourages the rest of the organisation to think digitally, procurement needs to practise what it preaches. Cameron is in the process of implementing procure-to-pay solution Coupa, taking the decision to go “best of breed”, even though Pearson is “an Oracle house”. He wants to put user experience front and centre.

“I think of procurement in three areas: driving efficiency, driving effectiveness and user experience,” he explains. “You can’t drive the efficiency and the effectiveness if you don’t get people coming back for more, which is all about user experience. We want to draw people in – those thousands of staff buying on behalf of Pearson – and get them to want to use procurement more and more.

“If we don’t get user experience right, they are going to go around us. We want [using procurement processes] to be the path of least resistance. That drives compliance, adoption, engagement and our ability to be more effective.”

Clearly, with Pearson’s public commitment to saving £300m, procurement has a role to play in cost reduction and identifying savings to be made in third-party spend. “We can talk as much as we like about creating a good team environment and putting in systems, but we have to deliver,” acknowledges Cameron.

But he is wary about the kind of short-term thinking that could lead to issues further down the line. “With third-party spend, we talk about ‘not mortgaging the future’,” he says. “We can’t do deals today that look good on paper but store up problems for us in 2020 – because life is not going to get any easier.

“For me, it’s about getting transparency, visibility and control over that spend so we can influence it,” he adds. “It’s not necessarily about price reduction. It’s about demand, specification – all those classic levers of procurement – and getting our team in a position to influence decisions rather than be on the back-end of them. We need to be that proactive challenger.”

Wave the flag

There’s also work to be done in educating the organisation in the value of procurement. “We need to celebrate success and demonstrate our value, whether it’s reducing cost, reducing risk, increasing revenue or promoting innovation,” he says. “There is a school of thought that ‘no noise’ procurement is good, sitting below the radar, but that only works in a mature organisation where everyone is working to the same process. We need to do more self-promotion so people are knocking down our door.”

Recent successes Cameron has highlighted to his leadership team to “wave the flag” for procurement include bringing in a managed service provider (MSP) to standardise the company’s use of contingent workers; introducing Amazon Web Services; and work to standardise print marketing globally. He has also been involved in a high-profile piece of work on executive remuneration, working with Pearson’s chairman.

More widely, Cameron feels positive about the future of procurement and believes it will become a ‘destination function’ as the transactional elements are automated. “If automation takes over some of the routine activity, you are left with the sexy stuff: sourcing, conversations, on-going supplier management. That’s where the value is, and many procurement teams don’t get the headspace and capacity to have those conversations.”

Having the opportunity to see everything is another attraction of the profession. “Few parts of the organisation get to see all aspects of the business, but we do as there is always third-party spend going on. That is quite a powerful position – if we can use it correctly.”

Done right, it can also act as the “window of the organisation to the outside world”. “Being the conduit to find the next great thing is exciting,” he adds. “I major on that. I don’t want to be the policeman; I’d rather be the catalyst.”

Daniel Cameron’s career journey

From chartered accountant to procurement supremo

1998 Joins Mazars as a graduate of the Institute of Chartered Accountants of Scotland (ICAS)

2000 Performance director at Cable & Wireless

2005 Becomes Royal Mail’s director, performance & transformation procurement

2009 Spends a year as Royal Mail’s head of FM & property procurement & procurement shared services

2010 Head of EMEA procurement at Goldman Sachs

2013 Takes over as Goldman’s global co-CPO

2016 Moves to Pearson as SVP and CPO

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