Commercial transformation stories
An NHS Foundation Trust
Matching clinical skills with commercial skills
The challenge: Just what do you do when suddenly the Government changes the very basis of your operations? A new regulatory framework means that you must compete all the services you provide and compete in turn to provide them to a new breed of monopsony purchaser. And, if that’s not bad enough – the regulation states that NHS provision is presumed to be a bad choice! Overnight, your staff, managers and leaders have to become best-in-class business mangers as well as clinical service providers. Revenue management, cost reduction, variation control and contract management are now key performance drivers of success.
Our role: For us, one of the key achievements was helping clinicians reconcile commerce with healthcare, that commerce doesn’t mean cuts and profits before patients, but how we deliver as much value as possible for the limited available budgets.
We were able to help our client develop a commercial mindset, skills and behaviours across the trust. Initially we developed a set of workshops to help the service management teams transform the commercial knowledge, skills and behaviours they would need to meet the new commercial challenges, while maintaining clinical and professional excellence. We worked closely with the Trust to refine the objectives, develop the content for the core modules, customise content for each of the directorates – which ranged from Children’s and Young People to Adult Acute Mental Health and Forensics – condense information about the Health & Social Care Act, researched contracting practice and experience in the health care sector and designed an experience that was appropriate for the highly experienced senior managers who would be participants. The modules spanned tendering and marketing services; business strategy & innovation; stakeholder management; negotiation; contract management; and performance and productivity management.
We supported the service management teams with workshops focusing on specific tenders they were responding to as well as creating and developing strategies for their specialist services: helping them develop a strategy for a particular service, identifying how to respond to a tender where a new service design and delivery model was required, and planning and rehearsing specific negotiations with commissioners.
What the client said: “It has been a real pleasure having Janet and Rob work with the Trust over the last few years. The feedback from all those who have attended one of your events has been uniformly positive and I know of plenty who have had cause to thank you for your separate wise council on occasion.”
Simon Hart, Director of HR & OD, Oxleas NHS Foundation Trust
A Global FMCG company
The challenge: How do you create a commercial centre of excellence in Global IT services. Our client spends over £500m a year on IT through a decentralised contracting network of business units. Faced, for the first time in its history, with global sales declining due to regulatory pressure in many countries, our client could no longer assume revenue growth and turned its attention to its cost base. At the same time they were experiencing large scale commercial problems with IT contracts. The IT team – while technically very strong – lacked the commercial skills needed to deliver the commercially sound contracts and supplier performance the company required.
Our role: Working closely with the Global Head Commercial and the Global Talent Manager IT we developed and delivered a Global Commercial Academy, a suite of commercial training workshops, for the IT function of over 500 people in 14 countries worldwide. The objective was to ensure that the crucial and complex IT services delivered through suppliers offered value for money, were fit for purpose, and were well managed throughout the life of the contract.
Since its launch in late 2009 we have delivered 90 workshops in 14 countries across Europe, the Middle East, South Africa, South America, Canada and Australasia with extremely positive feedback scores for engagement, relevance and tutor knowledge. On the back of these modules we created a further module for contract managers – a three day pressure-cooker workshop on how to read and use contracts, based on the company’s actual contracts. It was a highly successful format providing the opportunity for contract managers to develop confidence to use the contract more effectively in managing suppliers proactively.
What the client said: “MaguireIzatt provided first class support to the Commercial team in BAT. The training courses they ran challenged the thinking of our staff, provided good process to follow and instilled a level of confidence that delivered improved results for the business. The feedback was always extremely positive for both the training and the procurement support provided for some of our major sourcing and supplier management activities.”
Eric Evans, Head of Commercial and Supplier Relationships, BAT IT
Building the UK’s biggest Shared Services Centre
The challenge: The Research Councils UK (RCUK) were undertaking a complete restructuring of their support functions, merging HR, procurement and finance from the seven individual Research into one Shared Services Centre (SSC). The creation of the SSC was to be funded by a transformation in procurement, replacing transactional procurement with a category management approach. The visionary head of procurement wanted a partner to help introduce category management and transform procurement thinking and approach.
Our role: We were chosen as SSC’s preferred partner to help achieve the procurement transformation. We established a project team on site with team members supporting each of the category leads. We supported the recruitment of internal and external candidates to roles in the new organisation using our one day 7A Skills Transformation Centre, an assessment and development centre specifically created to identify commercial intrapreneurial talent in both current employees and shortlisted external recruits.
Skills transfer was at the heart of this job. We provided category mentors to support each of the new category leads as they developed the skills and confidence to navigate the minefield of stakeholders across the seven councils. We provided on the job coaching, technical advice and feedback to help the category leads develop and present compelling business cases, manage stakeholder meetings, research markets, create cost models and lead tenders and negotiations more effectively.
To ensure robust governance, we introduced a gate decision making process along with the creation of a multi stakeholder sourcing forum to challenge and sign off category business cases and plans. We supported this with a bespoke category dashboard which provided clear visibility of progress across all categories. Our creation of the Badger’s Den provided a powerful opportunity for procurement leaders to give early feedback and challenge to business cases ahead of category managers presenting to stakeholders.
SSC (now SBS) is now the shared services centre for the Department of Business Innovation and Skills (BIS), a ministerial department supported by 49 agencies and public bodies. We continue to develop and roll out programmes for teams from those agencies to ensure consistency in process and approach across BIS and deal with practical issues created by the change. Our flexibility of approach in making content and delivery relevant to each team, while making links between the teams and the organisation as a whole, has won us respect within the business and is helping to smooth a difficult transition.
What the client said: “MaguireIzatt is our chosen partner for helping RCUK SSC implement a procurement category management approach. Key to this assignment is the requirement for Mi to support us in introducing the procurement skills, behaviours and knowledge required. Their approach ensures that we will not only reap the value for money benefits for the Research Councils, but we are confident that our people will be better equipped to continue this work when our consultants withdraw.”
Mike Jones, Head of Research Procurement, SSC Ltd
Getting ready for the world’s biggest PFI
The challenge: Outsourcing doesn’t get much bigger than the 30 years, £30 billion London Underground public private partnership. It represented a seismic change for LU’s culture as it swung from being an organization doing things, to one where the job was to manage external providers. For an organisation that had previously focused on technical capability in running the world’s oldest underground rail network, the PPP contracts represented a significantly increased exposure to commercial risk. LU’s senior contract managers knew it need a step change in commercial decision making in the organisation.
Our role: We worked with the contract directorate for a number of years in the immediate lead up to and early years of the PPP contracts. A core element core of our work was the development and delivery of an intensive one week, multi speaker, residential, FastStart training programme for those working in the new contract directorate. The aim of the programme was to develop commercial awareness and the skills to operate the contract and manage day to day commercial issues regarding variations, risks, costs, negotiating claims and delivering value for money from the 30 year contract. We researched and developed extensive knowledge of the contracts and used this to create case studies and course materials to build the skills and knowledge underpinning excellent commercial decision making.
As well as providing FastStart programmes, we supported the contracts team with a range of ad hoc workshops to support the development of a claims management approach and to develop and rehearse negotiation strategies for complex negotiations.
Working with sales teams to sell value
Transforming sales and selling value in a global commodity market
The challenge: How do you monetize your unique value in a commodity market? This global manufacturer was coming under increased price pressure from distributors and end users as cheaper Chinese products entered the market. Despite the quality engineering in its products, SKF products were being treated as commodities with lower price being demanded. Profitability was taking a hit and it was running out of options.
Our role: We worked with SKF over three years to develop a value capture strategy for OEM and distributor sales. Key to this was the development and delivery of our “Driving Profitable Partnerships” programme. The primary aim was to change the sales mindset and skills from a price to a value focus. This meant helping the sales team develop the skills they needed to research, identify and quantify value opportunities, and then negotiate and contract on that basis. Working with specific industry groups, we helped them identify strategies and action plans that could be implemented to meet the challenge of resisting price reductions. This programme was rolled out to sales teams across Europe and the UK.
A second wave of activity was our WorthIt! programme which had a headline commitment to make distributors more profitable. We trained over 100 people in a new way of thinking about value. This helped SKF establish new relationships with the sales leaders in the three major distributors and build a strong future sales pipeline. The programme radically altered the mindset of the frontline sales team and created the foundation for a team of value warriors and productivity consultants.
Through this we helped SKF identify nearly $1 billion of cost reduction and productivity improvement in its value pipeline; set up direct, and sometimes tri-partite, relationships with key, marquee accounts to promote SKF’s value direct to the end user and differentiate SKF in the market place, and helped create the SKF 5D Consultancy Sales Method to promote consultancy services and provide leadership to the sales team.
Our WorthIt! approach turned into a strategic platform for SKF to sell and be rewarded for real demonstrable value and to build a delivery team funded by the commercial consultancy service, with agreements entered into directly with customer partners.
What the client said: “I have had the pleasure to work with, know, and learn from Rob for almost 10 years. His engaging way of discussing sacred cow topics, challenging perceptions, and deriving solutions really helps companies find better ways of doing things. From a sales and marketing perspective I really enjoy his work on ‘understanding procurement”. It’s great to understand what that profession wants, how they think, what they are trained on, and how to structure a deal that makes all parties win. I have and will continue to recommend Rob and his company MaguireIzatt for any consulting engagements where a company really wants to learn how to purchase, or sell on Total Cost of Ownership and create real and sustainable shareholder value.”
Todd Snelgrove, Global Manager for Customer Value, SKF
Innovative contracting in the pharmaceutical industry
The challenge: How do you support orphan diseases? These are terrible ailments that profoundly affect a small group of patients worldwide and the economic case for the development and manufacturing of therapies is difficult. Development costs are high, but target markets are small.
Pfizer wanted to develop innovative contracting approaches that would allow the company to move away from price focussed contracting, to contracts which reward the company for the value it delivers to a range of stakeholders across healthcare systems in Europe and make the therapies more affordable for health care providers.
Our role: Pfizer turned to us to help it create a strategy forum to identify innovative approaches to contracting in tight market conditions. This became a two day highly interactive workshop into Rome for over 200 people from 20 countries across Europe to drive innovative thinking from the product and country groups. The aim of the workshop was to internally crowd source new approaches to contracting in a price focused market, assess the likely success of the ideas and prepare action plans for deployment with specific customers.
We supported the group with a structured analytical framework and short plenary sessions on innovative thinking and how to break with current thinking to motivate the participants and help them complete the tasks.
Working in 6 parallel workstreams across therapy and regional subgroups over 80 innovative contracting alternatives were identified and evaluated by the group for readiness to implement and challenges. Each country left with a detailed action plan.
Following the workshop a strategy report showing options, ratings, challenges, readiness to act etc was compiled.
Leadership & management development
Motivating management development for front line staff
The challenge: Our client, an NHS Trust, is well known for its clinical excellence. It wanted to invest in its next generation leaders with its first ever management development programme that would create greater commercial understanding and skills alongside a shift from a telling to a coaching style of management.
Our role: We designed a bespoke modular learning programme to cover all aspects of non-clinical leadership. We developed seven modules: Four focussed on personal effectiveness (Personal style and awareness, Managing & facilitating change, Negotiating for outcomes and Managing team performance) alongside three commercial modules (Achieving operational efficiencies, Planning for a successful service and Delivering & monitoring the service). These covered critical issues such as setting and monitoring KPIs and SLAs; contracting; techniques for developing and modifying services; responding to tenders; understanding costs and achieving operational efficiencies.
We offered a turnkey solution providing the design and delivery of all workshop, marketing the workshops, logistics, feedback and management reporting. Attendance, which is non-mandatory and offered on a pick and mix basis, has been incredibly strong, and feedback has been overwhelmingly positive. The trust has extended the delivery of the workshops to meet ongoing demand.
What the client said: “Our experience of your service has continued to be outstanding, including consistently positive learner feedback both at the end of courses and on six-month follow-up, demonstrating a transfer of staff learning to the workplace. Our staff clearly find the quality of both of you as trainers and facilitators to be excellent as demonstrated by the above feedback.”
Mick Wooding, Contract manager and Learning and Development Specialist, Oxleas NHS Foundation Trust
Virgin Atlantic Airways
£20 million cost reduction
The challenge: Costs were going up, bums on seats had slowed and the airline needed to cut costs fast without reducing its world leading levels of service or damaging the brand or passenger experience. The management turned to the supply chain to see what savings could be generated. “Look at the tail” said the market “you have too many small suppliers”. “You could save £1 million.” “Look at the big stuff” we said. “You could save £20 million”.
Our role: Virgin chose us as its partner for an accelerated cost reduction programme based on our 20:20:20 approach: 20 days to find 20% of saving that could be delivered in 20 weeks. A key element of the brief was to work alongside Virgin’s team to help embed cost management capability. With our team of procurement consultants we delivered a £20 million+ cost saving in 11 months: a return on investment of 15 times outlay, and cash positive in 12 weeks. Unlike many cost reduction programmes which are based on getting suppliers to reduce their prices, our approach starts with setting the aspiration – what is realistic and feasible and setting target costs for each of the major categories of spend. Our consultants immersed themselves in Virgin’s products and processes to see what worked, what didn’t and what could be changed to generate sustainable efficiency savings.
From contract review, through specification development, supplier negotiations and contracting, we worked with the supply chain to identify new opportunities for enhanced value for the airline and its supply chain.
What the client said: “As a business we were seeking to establish the procurement function as a significant driver of efficiency and effectiveness across all of our purchasing activity but also in establishing sensible business process and ongoing management of the supplier base. We set extremely stretching savings targets as the headline commitment from the project which was planned to last 52 weeks. The project element of the initiative was completed on schedule. I am pleased to report that all objectives were delivered and can further confirm that the support and leadership provided by (the) team were invaluable in us getting to that point. The Procurement function here at Virgin Atlantic is significantly stronger in terms of its capability to deliver and its profile and engagement with the business whilst the financial benefits of the savings delivered will help drive profitability in a challenging market for years to come.”
Andrew Walker, Head of Procurement, Virgin Atlantic Airways
Transport for London
Best of breed IT supplier selection
The challenge: How do you choose the best (future proof) supplier for a transition to a single IT provider across 5 business units? Transport for London wanted to introduce a single IT provider and contract across all five transport modes in London and it wanted to achieve best value for money.
Our role: We provided procurement consulting support – specification support, evaluation criteria support and membership of the trouble shooting Red Team – we developed and ran the negotiation strategy workstream to help the teams develop the ambition and confidence to negotiate contracts that looked beyond the IT capability to the commercial imperatives and value for money implications of the contract.
A first for TfL, we ensured wider internal stakeholder involvement in establishing evaluation criteria and scoring bids. Through the use of Virtual Supplier Model and Bid Championing, we were able to drive up the quality of the shortlisted bids significantly ahead of final contract award.
What the client said: “Rob does exactly what it says on the side of the “Rob Maguire box of skills” and then some. Second to escape from the confines of the box is his enthusiasm for his subject and his genuine interest in people. The first thing to escape was of course his mind which spends nearly all of its time thinking outside of said box. Rob is professional, articulate, a great teacher and a superb procurement strategist and campaign analyst and advisor. I have worked with him on three occasions now over the last 15 years and each time his work returned much more to the organisation than he earned in fees. So a bit of a bargain as well. I have no hesitation in recommending Rob and his work.”
John Lichnerowicz, Head of IM Architectures, Transport for London
The challenge: Blockbuster products are the Holy Grail for big pharma companies. These are the products that generate over $1billion in sales a year. This global pharmaceutical had a number of products in its blockbuster pipeline. Yet the company sensed that rather than being upbeat, there was an unsettling mood within the organisation, especially the sale teams. It wanted to understand the mood and to encourage innovative and positive thinking to ensure success with its blockbuster products launches.
Our role: Partnering with renowned Innovation author and speaker Nigel Barlow, we developed and delivered a series of workshops for the company in the US to help the sales function develop an understanding of innovation and its use and role within a highly structured, legally compliant environment of drugs approval in the United States. The workshops helped the senior level group tackle the difficult issue of innovation and how it affected them personally and the business. Our commercial skills and experience complemented Nigel’s focus on innovation and this was just one of many clients we have worked together to support.
We helped our client identify innovative approaches to support blockbuster therapy development and marketing while remaining on the right side of industry regulation. As part of the assignment we carried out wide scale qualitative research within the organisation to get a temperature check on employee feelings at a time of significant change in the industry, economic uncertainty and high unemployment. This assignment required great sensitivity and understanding of US health and drug policy and personal sensitivity around job security.
Following the interviewing, we fed back the findings to the senior team and through a workshop format helped them define some of the underlying issues and ways of tackling them.
What the client said: “Rob and Janet’s support on this project was invaluable. Their understanding of commercial issues and regulatory constraints is fantastic. But it was their ability to connect with people across the organisation and to really get to the heart of people’s concerns is what made the difference. In a very short period of time we were able to help our client understand the innovative mindset, the factors within the organisation that were holding it back and how it could tackle those issues.”
Nigel Barlow, CEO Service Legends
Transforming procurement people from transactional to intrapreneurial
The challenge: Royal Mail had a procurement team of over 200 people with a transactional mindset. Limited in its ability to raise revenue due to regulatory caps on postage rate rises, reducing costs was critical. A major transformation of procurement was required to change the mindset and deliver the savings needed through the supply chain. As part of the overhaul, RM Procurement was introducing category management as the new way of working. All jobs in the new procurement organisation would be advertised.
Our role: We were selected to be Royal Mail’s procurement people transformation partner. Our primary role was to help it recruit a new procurement team from both internal and external candidates. Technical skills we believed weren’t the issue. You could train people how to be good at many of the elements of procurement. Harder to come by were the attitude and mindset needed if category management was to be really successful. So we focused on creating a model of the attitudes and mindset that were needed in what we called intrapreneurs – entrepreneurs inside companies. Based on an extensive review of entrepreneurial literature and research we developed our 7A model of intrapreneurship – seven distinct attitudes that intrapreneurs have.
From there we built a one day assessment and development centre called a Skills Transformation Centre for shortlisted candidates. It provided an excellent opportunity for Royal Mail to try before they buy, and for candidates with the right mindset and attitude to shine. The observation criteria were strictly limited to the 7As we were looking for to eliminate bias. Each person who took part in STC received a detailed report showing how they did against each of the 7As and with suggestions for how they could strengthen these areas or use their current strengths. The feedback provided the basis for future development support to help the procurement team get the support they needed.
We used the 7A STC as a scene setter for the aspirations of the overall procurement transformation. It provided an opportunity to focus on what the future would look like and to generate excitement and clarify expectations about the future ways of working.
What the client said: “Those who did well in the STC did well in the job – they really stepped up. Those who didn’t do well but who we still employed, did not perform well going forward.”
Category Manager, Royal Mail
Engaging keynotes & facilitated workshops
London Business School
For three years Rob has been treading the boards at London Business School, delivering an engaging and interactive keynote on procurement and negotiation as part of Professor of Marketing Oded Koenigsberg’s Pricing Strategy and Tactics elective on the MBA programme.
Esade Business School
Procurement and negotiation
Rob also speaks on procurement and negotiation at Barcelona’s ESADE Ramon Llull University for Department of Marketing’s pricing elective run by Associate Professor Marco Bertini.