Putting the needs the company’s engineers first is at the heart of procurement at McLaren, its top buyer has said.
Jamie Foster, group procurement director at McLaren Group, said personal relationships with stakeholders was key to his role in supporting and enabling the business.
Speaking at the eWorld Procurement conference in London, Foster said: “Everyone talks about communication, stakeholder engagement, all these other great buzzwords. What it really means is do you get along with that person or don’t you? If they are walking down the corridor, do you pretend to look at your phone or are you going to engage with them?”
Foster works across McLaren’s divisions, including its Formula 1 racing team, its sportscar department and the futuristic Applied Technologies division. He described Applied Technologies as like “a room of mad scientists”. “It’s mindblowing what these guys are doing,” he said.
Each one of these divisions has its unique priorities, and none of them are about making cost savings, said Foster. For the F1 team the priority is singularly about how fast their race car goes, with automotive it was about high quality and for Applied Technology the need is about staying ahead of the market. “Look at your internal stakeholders – if you had to prioritise their top one thing, what is the one thing that’s driving them and are you aligned to it?” said Foster.
Foster said as he has become more senior in his career, his role has become more internally-facing. Knowledge of your organisation’s people is “far more powerful” than knowledge of procurement processes, he said. “You need to recognise that, because if you try and make the process more important it will never work.”
Stakeholder engagement goes all the way through the procurement process at McLaren, Foster said, right up to the point of handing over a new contract to the end user. Foster has a policy he calls the “operational handshake”, in which a category manager is not allowed to hand over a new contract to the end user until that business user has signed it off. “Only when the operational guy says, ‘I’m happy to take this off of you and run it on a daily basis,’ could the category manager hand it over,” he said.
One of the ways Foster keeps procurement focused at McLaren is to limit the number of KPIs his team monitors, suggesting seven because it is said to be the most things an individual can focus on at one time. At McLaren he operates a one-in-one-out policy for new KPIs.
Foster said in the past the procurement profession more generally has been too focused on boosting its standing within the business and, losing sight of its role to help achieve business objectives. Conferences were all about “having a seat at the table, almost like some rallying war speech”, and the result was stakeholder disengagement. Procurement needs to earn the right to have an opinion, he said.
Reflecting on his own career, Foster said there were times earlier in his working life where he had got it wrong and failed to understand what the business needed. “Eight or nine years ago I followed the standard procurement model. My job was to find all the lying people around the business who were losing money.” Back then, he said, the function’s role was about trying to control spend and push textbook practices for complex procurements.
Foster said his turning point was working at Hitachi on a greenfield procurement project. “There were 12 of us in the room with a £6bn order book. I went into this with a whole load of freedom, I could do it my way from day one,” he said. Foster quickly ran into problems because stakeholders did not understand what he was trying to do.
“I was trying to design the perfect, finished article,” he said. “I was disengaged with what [Hitachi] needed. They were on evolution as a business and they needed simple, basic procurement activities and structures.
“What I started to understand was to put the manual away and start looking at the more simplistic things that they needed. How do we create value and, more importantly, how do we earn the right to do what we do?”
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