Michael (Mike) has a broad and diverse background with significant commercial and strategic experience.
He is an experienced Senior Executive Manager and manages strategic leadership roles with P&L. He has substantive experience and knowledge ranging from:
• Procurement & Supply Chain
• Legal and Contract Management
• Governance and Risk
• Customer Services
• Project and Product management;
• Managing Director growing start-up businesses
• Extensive Senior Executive management experience in multiple large complex organisations as divisional manager of in country multi-national customer centric companies.
Mike has led teams in sport from age of 11 and business from age of 24 and loves to lead through making a difference to the way in which people think, work and execute change to deliver meaningful outcomes.
He is always inspired by people doing amazing things.
He seeks to build rapport and has a history of growing loyal and highly functioning teams and creating space for ideas and confidence to develop.
On the 26 JANUARY 2020 the NZ government in partnership with industry launched the NZ construction accord. This was in response to the Treasury New Zealand Construction Conditions of Contract Report back in September 2019 and the number of Construction companies either entering into liquidation or posting large annual losses.
Procurement had and still has a significant part to play in the construction sector and the new accord highlights some key areas for procurement to modify its past behaviour when working with suppliers in the sector.
The accord introduces priority focus areas which are Industry Led, Government Led and shared.
Procurement is a Government led Priority area highlighting the focus on “Better procurement practices and improved pipeline management”
“Create a more certain, visible and better coordinated pipeline of government construction work” ( There have always been challenges for suppliers to make investments when there is no surety of future work/contracts)
“Improve government and industry procurement practices so they are more consistent, focus on good value and enable the industry to succeed” ( the key word here is good value and not lowest cost , fixed price, fixed cost as seen in the past)
The shared priority area that is another stand out for me and procurement professionals is;
Better risk management and fairer risk allocation. It is great to see the new view of not transferring all risk as you can and should never do this.
The statement ” Re-balance risk in the sector so it sits with the party best able to manage it. Improve the understanding of construction risks and their impact and costs” is a fantastic set of principles.
Over 10 years ago I was in a company contracting many construction companies. We always sat down with the supplier and asked them to price each item of risk even compensation events. As a Business we chose the risks we would take on ourselves (budgeted and put in our contingency) and also the risks we would pay the supplier for as a fixed price. A much more open, transparent and fair way to jointly share risk.
I am excited about this accord and the proof of the pudding will be in the eating ( as they say). Lets all support this approach creating a strong, vibrant, consistent, fair and sustainable construction sector for all in New Zealand
Strategic risk if not well managed has the potential to destroy the greatest value for an organisation yet; it is where management, risk/audit and board risk committees tend to spend the least amount of time. (Arash Rashidian).
What are some of the risks organisations face?
Labour model disruption
The pace of change
Digitisation misconceptions (AI, Robotics etc)
Climate change liability
Remote working for workforce
Dated policies and procedures
The War for Talent ( shortages )
With organisations average spend being upwards of 60% through 3rd party suppliers how are they managing the supply chain risk?
Supply chain risk can be defined as “the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity” (Wikipedia)
If you are working in the supply chain you will be familiar with the trend that the world is becoming more influenced by VUCA – Volatility, Uncertainty, Complexity and Ambiguity.
These drivers are increasingly used in recent years to describe the current business environment and the impact it has on the supply chain performance.
Countries such as the United Kingdom and Australia have legislation holding large organisations to account ensuring that there are no suppliers using modern slavery in the manufacturing and provisioning of goods and services supplied to that organisation
The food industry is seeing an increasing demand by consumers for clarity of provenance–also leading to a focus on supply chain risk.
How do we manage supply chain risks in our businesses today?
Supply Chain Visions, Inc. has developed a model that targets 4 areas, Strategic, Operational, Financial and Physical risk as per the picture below.
Most organisations today are managing risk through Enterprise Risk Management methodologies like Bow-Tie and Monte Carlo.
Monte Carlo simulation performs risk analysis by building models of possible results by substituting a range of values—a probability distribution—for any factor that has inherent uncertainty– a much more realistic way of describing uncertainty in variables of a risk analysis. Below is an example of a simulation presented in a histogram format.
Bow-tie is a risk evaluation method that can be used to analyse and demonstrate causal relationships in high risk scenarios. A Bow-tie diagram does two things. Firstly, a Bow-tie gives a visual summary of all plausible accident scenarios that could exist around a certain hazard. Secondly, by identifying control measures the Bow-tie displays what a company does to control those scenarios.
I have seen this being introduced in complex organisational environments as it provides a simple clear high level management view of what can be a complex analysis.
There are known risks, where organisation’s can use a typical approach for risk identification mapping out and assessing the value chains of all major products and services, and unknown risks, which by their nature are difficult or impossible to predict, quantify, or incorporate into the risk-management framework
McKinsey has developed a practical approach methodology to managing unknown risks a model colloquially known as the Swiss cheese model.
Australia and New Zealand have adopted the ISO 31000 standard for risk management. Standards New Zealand state that Using AS/NZS ISO 31000 will assist organisations to:
increase the likelihood of achieving objectives
be aware of the need to identify and treat risk throughout the organisation
improve the identification of opportunities and threats
comply with relevant legal and regulatory requirements and international norms
improve financial reporting
improve stakeholder confidence and trust
establish a reliable basis for decision-making and planning
effectively allocate and use resources for risk treatment
improve operational effectiveness and efficiency
enhance health and safety performance, as well as environmental protection
Procurement Leaders’ have launched a guide to third-party risk management which provides a summary of the maturity curve outlining progression of a function’s management of third party and supplier risk.
The guide is divided into four sections:
Cross – Functional cooperation
It describes each maturity level in detail and provides supplementary details on the activities and tools teams can apply at each level. Procurement Leaders are a global entity that provide procurement and supply chain insights for a global membership through research and white papers.
This is another procurement focused organisation that has seen a more intensified focus on supplier and supply chain risk.
In a VUCA world many businesses are under increasing pressure to take a more proactive approach to mitigate risks.
Along with traditional risk functions within businesses, supply chain risk partnering with emerging technologies enable organisations to accomplish risk management more efficiently.
At Kearney’s paper “Are you prepared for a black swan event” highlights that the focus on risk by procurement leaders comes at a time when procurement stakeholders (CEO,CXO, CFO, COOs etc) who have been dealing with business risk for many years have higher expectations of procurement leaders to manage supply chain risk.
Procurement teams that are maximising this opportunity and looking at risk management in innovative ways are starting to benefit, demonstrating an opportunity for the procurement function to help build resilience and add value to the whole business.
The advent of Big Data and innovative technology has enabled greater insight for organisations to accomplish this more efficiently. By embracing risk management, procurement can use it to deliver immediate value to all businesses and also enhance its own internal brand.
At what cost? a blog about the unintended consequences of continually driving cost savings Year on Year from your suppliers.
Lets start with a
definitions to whet the appetite;
Cost savings also known as cost
reductions or ‘hard’ cost savings, are savings that
directly impact the company’s bottom line (i.e. profit/loss).
In relation to
procurement ; The aim of Procurement savings are
to drive down procurement costs, improve supplier terms and decrease
product prices. A cost-effective procurement process would help
a large organization generate millions of dollars of savings every
What do you think ?
Do you agree?
There is a very fine
line when continually requesting cost savings from your suppliers year on year,
especially when only focused on the
input price and not Value or Total Cost of Ownership. Suppliers have to make
a return on investment for their shareholders.
Continually squeezing margins can drive many unintended
I have a saying that is a different take on squeezing blood out of a stone. In the context of your suppliers “If you continue to squeeze a stone with your hand what happens to your hand ? – ( It will be your hand that bleeds)!”
The Construction Industry
A great example of
unintended consequences of cost out in New Zealand is the systemic issues in
our construction industry. An industry’s boom / bust cycle is constantly under
review. (NZ demographics for the construction industry show 90% of organisations
have less than 10 employees – atypical compared to many OECD countries). For
many years there has been a focus on fixed price construction at lowest cost
combined with the drive to transfer as much risk as possible to the supplier.
The articles below highlight the issues the big companies (10% of the industry)
have had over the last few years entering liquidation or writing off millions
In boom time
liquidation should be unheard of. This is one of the unintended consequences
around costs and fixed prices!
it costs you more to do something that it is actually worth”
Do you have any
examples of when this has occurred?
Consumer demand can also driver unintended consequences and at what cost? The Global Fashion Industry was worth $2.4 trillion in 2018 with an expected growth of 5-6% Year on Year.
Consumer demand has
driven a substantial growth in the fast fashion industry for cheap throw away
Andrew Morgan’s documentary The True Cost on Netflix
is about the clothes we wear, the people who make them, and the impact
the industry is having on our world. The price of clothing has been decreasing
for decades, while the human and environmental costs have grown dramatically.
Filmed all over the world, the documentary spans the brightest runways to the
darkest slums, and features interviews with the world’s leading influencers
including Stella McCartney, Livia Firth and Vandana Shiva, The True Cost is an unprecedented project that
invites us on an eye opening journey around the world and into the lives of the
many people and places behind our clothes.
The consumer driven
consumption for low cost fashion items and the link to sweat shops and
industrialisation of resources creates unsustainable issues on our natural
resources. Also forms of modern slavery through inhumane working conditions
begs the question who really pays the price for our clothing?
Modern slavery is a
critical issue derived by the demand to continually cut manufacturing costs at
the expense of human rights – ( humane working conditions, a fair days pay for
a fair days work )
Based on a recent
CIPS modern slavery workshop I co-hosted in Australia, here are some of the
global modern slavery statistics taken from the globalslaveryindex.org;
40.3 million people in modern slavery world-wide (71% are female)
24.9 million in forced labor
65% of modern slavery is concentrated in the Asia Pacific region
G20 countries leaders in consumption: $354 billion of at-risk products imported by G20 countries on a yearly basis
Who would have
thought that in the G20 counties the average person employs 40 slaves!
statistics are also quite challenging, however in response Federal Government
Legislation was introduced in January 2019 ( only the second country in the
world to implement modern slavery legislation). The philanthropist Andrew
Forest and his wife set up Walk Free Foundation with a vision for a world free
of modern slavery and human trafficking.
Australia’s Modern Slavery statistics;
15,000 people in modern slavery in Australia
Forced labor is the most common form of slavery
Over $12B imported at-risk products every year
Number one on most active countries for response to modern slavery in the Asia Pacific region (before Act was introduced)
Most at-risk industries: service (cleaning & security), agriculture, fishing
Controlling costs is
key to managing sustainable businesses, however driving an environment that
continually puts pressures on suppliers has many negative unintended
consequences. Global consumer demand and low cost not only creates irreparable
environmental issues, it also builds an environment that ignores basic human
A new focus on Sustainability, Value, Quality, Risk and the Total Social Cost of Ownership (TSCO) should be something that all organisations should aspire to. Procurement is one of the enablers of this focus as 40-70% of business’s expenditure is through third party suppliers.
It is time for
procurement to help lead a change by doing the right thing!
If you have read my
previous blog “Procurement is it time for a re-brand?” you will
appreciate the debate that has plagued the procurement community for numerous
years. For people who know me, I have always advocated in the need to put the
POWER into Procurement. I thought I would have a little bit of fun ( although
with some serious underlying benefits) by delivering a blog on Putting the P
back into procurement.
If you are as
passionate ( 1st P meaning ardent,
enthusiastic, heartfelt, energetic) like me about procurement take a few
minutes to think about what attributes are aligned to your values,
reflects your motivations, in a
profession that is far reaching, in constant change and can deliver huge
value/benefits for your organisation.
Below is a small
list of the P’s that put the Power into procurement. Lets get started with some
examples from the list of how the P enables our procurement profession;
Does procurement in
your organisation have insight and presents ideas and innovation to
stakeholders before they know about it? How good do you know the market place,
suppliers and your business goals and strategies? Procurement teams that have
the “Trusted advisor status”
are leading the way by managing the incipient demand of their
stakeholders. It is like being an evidenced based fortune teller!
Professional (definitions: expert , proficient, specialised and qualified,
How many in your
procurement team understand and are qualified and certified in procurement? How
many are imposters?
accountants, doctors, engineers, designers are just some examples of industries
that have rigorous qualifications and certification. Malcolm Gladwell in
“Outliers” highlighted that mastery takes 10,000 hours of practice.
impromptu come for advice you know they think of you as an expert.
Peter Drucker the
management guru coined the phrase
“Culture eats strategy for breakfast”. Teams that are not principled
lack trust. I have had the pleasure of taking over a team that had no
organisational trust. It felt at times you were walking in quicksand but like
every journey of a thousand miles starts with the first step. Ethical and
transparent procurement is a prerequisite for the procurement profession and
without it you will not be able to deliver the basics let alone corporate
The edited version
of the 6Ps of planning is; Proper Planning Prevents Poor Performance. This is
something that all teams not only procurement
should aspire too. There is much hype about agile and scrum but this is still
a methodology that speeds up the planning function. My wife has an adage that I
have adopted ” A dream is a goal with a timeline (deadline). Setting goals
is key to any success.
To me persuasion is
one of the key attributes for the Procurement profession. Procurement usually
sits in some form of shared service , support capacity for most organisations.
A key part of the role is to support the business decisions through 3rd party
sourcing and engagement. How would you influence an executive if they disagreed
with you about changing strategic suppliers when you know well inclusive of
evidential data that they are the market leaders from quality, time and price?
So focus I have left
for last is one of the top concerns for
most Executive (including CPOs) are people. People
can be defined as a community or group and in this form we can all attribute
the word Team. The great philosopher Aristotle first coined the phrase
” the whole is greater than the sum of the parts”. In a changing
world, the war on talent and capability has increased. Employing the right
people with the right attitude and the right capabilities are key for most
roles within an organisation. Attitude
and open mindset are my key takeaways from managing teams since the age of 24.
I also have a saying that if you are playing for Manchester United your
transfer fee will be higher than playing for Auckland City – so how can we
build a team like Man United in our profession? Have you ever been in a high performing
team that has “Collaborative Confidence” everyone knows each others
roles, the energy is fast pace with lots of customer delivery, satisfaction and
Training and skills
are essential so aligning to a global standard such as CIPS with its ethics
exams and code of conduct enable people to feel confident, both from an
individual, employer customer and supplier perspective.
I hope you have
enjoyed this blog , along with a few smiles I am sure there are some useful
Please let me know
your feedback and/or some ideas for areas you would like me to explore more