Lloyds, the next iteration

10 May 2011
As SM went to press, Lloyds Banking Group issued a statement announcing a £3.4 billion loss for the first quarter of 2011. The largest chunk of this is the £3.2 billion the bank has set aside to pay compensation to customers who believe they were mis-sold a payment protection insurance policy. Its decision is expected to put huge amount of pressure on other lenders to do the same. The financial giant is often in the business pages of the broadsheets. Last month, the government-appointed Independent Commission on Banking published a report on industry regulation that spelled bad news for Lloyds. Among its recommendations was that the group should “substantially” increase its asset disposals by shedding hundreds of branches to reduce its powerful market position. These issues may not directly involve the purchasing department, but as Michael Whitby, new group procurement director, points out in this issue, the only way his team can do their job well is with an acute awareness of the needs and strategic direction of the business. Asked what was the one piece of advice he would give buyers, he said: “Procurement is not about the best deal, it is about understanding what the business needs, getting it, then looking at quality of service and price. You can do great deals that are worthless to the business. If you don’t listen, it doesn’t matter how good you are, you are unlikely to deliver value.” He took up the role – one of the biggest CPO positions in the UK – at the start of the year and describes it as “the biggest train set he could find”. Lloyds’ purchasing department has already reported a number of successes over the years, but with a relatively new chief executive and the first major phase of the HBOS integration nearing completion, Whitby is excited about his part in the “next iteration” of the procurement journey.
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