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  • Peter Smith

THURSDAY 16TH DECEMBER 1999: RBS Bid Cleared and it's Party Time!

I am hosting an Institute of Purchasing Board of Management meeting at Kings Cross. I have to welcome them, do the fire drill stuff, apologise and disappear off with Bernard to meet my valued colleagues (otherwise known as "the stroppy b****** from Exco") and talk about our potential purchasing jv with Andersens, project Redgrave.


We start very amicably with Paul Myners. He is OK- he has some concern about whether Purchasing is a core strategic function that should not be outsourced. I agree to some extent, although we tell him that we can keep control under the terms of the likely joint venture deal. He is happy enough for us to go to the next stage and work up a more detailed proposal.


Tim Jones is worried about loss of control over "his" key contracts. He has spent time and energy getting good people reporting to him in place in areas like Commercial Services to manage these contracts and doesn't want to lose this. He doesn't seem to understand, or perhaps acknowledge the input my team have on these issues, which winds me up somewhat. I also point out that these are in the main Group contracts, not just for Retail, and that we (or Redgrave) try to get the benefits of this Group dimension. He says "I'm not sure Ron sees it like that. He thinks Businesses should have more autonomy."


I tell him I'm quite happy to go with him and discuss that with Ron because it is bloody essential that we all know what we're trying to do! I believe my role is to make sure the Group interest is represented, which inevitably will sometimes lead to conflict with individual businesses. My annoyance seems to calm him down. He backs off and starts saying that the main thing is to have good people working on his behalf, and that he wouldn't rule out Commercial Services going into Redgrave.


I find it difficult to report the next meeting without descending into a certain amount of carpet chewing and mouth foaming. Stefan Harris, who runs Global Financial Markets, basically thinks Purchasing people are useless and can't "do deals" nearly as well as his traders, or, of course, Stefan himself. He could save another "15, 20, 30% off any contract you guys negotiate". He also doesn't think we can help on anything that is specific to GFM, difficult or strategic - like Legal Services, Recruitment, IT Development. ...


He just about agrees that we might bring some value to things like stationery. He thinks Andersen will rip us off in the Redgrave negotiations; he doesn't really mind who does purchasing, because he doesn't think any of us are any good! Well, I've clearly failed to sell the strategic purchasing message to Stefan, or indeed any sort of message at all. Or perhaps I 'm being hard on myself. Sometimes one is just dealing with people who are un-persuadable in this particular area.


I manage to keep reasonably calm - well, at least I don't hit him, which is tempting but wouldn't really help, and anyway, he is older and (a rarity for someone of my stature) smaller than me. I do leave him with the comment that I will take him up on his claim to do better deals next time we have a tricky contract to negotiate, at which he looks a little nervous. I mean it as well. Let's see how much he can get out of a good monopoly supplier.


Richard Delbridge is totally different. Just as hard to deal with, because his comments are well thought out, intelligent objections, in many cases covering issues about which I share some nervousness. I am also in a difficult position, because part of his argument is that we have made great strides in purchasing in the last couple of years and we can improve further under my leadership. He doesn't want to share the gains with Andersen. With management willpower to enforce discipline and policy we can do more ourselves to get better use of good contracts, and stop managers going off and doing their own thing. Anyway, he says, purchasing is ultimately a key core competence.


However, he is nervous about investing large sums of money in the e-procurement project, particularly in the current environment of squeezed costs for 2000. Can't we get Andersen's to fund the necessary e-procurement development without handing over control to them? In the end he agrees that we can pursue Redgrave- but he wants to pursue in parallel the idea of AC funding the systems work in some sort of a risk sharing agreement without going as far as a full joint venture.


It is a mentally and emotionally draining morning. I arrive back at Kings Cross with perfect timing; the CIPS meeting has just finished so I join them for lunch, which looks a little opportunistic. They have had what sounds like an interesting debate about e-procurement and its implications for the Institute. I assure them that I have not timed my return purely to coincide with the arrival of Cappuccino's excellent fishcakes!


Stephen Byers announces that he is not going to refer the RBS bid to the Competition Commission. There is "significant competition from other institutions over a range of their services" and the merger would not increase power significantly for the new RBS group. We were expecting this following the similar BoS decision, although there was a slight hope that the greater overlap between NW and RBS might just have changed his mind. No such luck, and I have to say I agree with him. The world of Financial Services is changing and becoming more competitive with the new entrants and companies like M&S, Tesco and GE all becoming serious competitors.


Immediately they hear of the clearance, RBS issue their formal offer document. I don't have time to look at it today. But this means the clock starts ticking on a new 60-day bid timetable, which, ironically, means that the final crunch day when we will know our future, is Valentines Day, February 14th. That should give the press plenty of scope for headlines about massacres, love-letters and broken hearts.

In the evening we have our departmental Christmas event at a hotel in Kensington. It is a strange event. When we booked it, the theory was that several companies would be there this evening, each with 20 - 30 people attending. I arrive a little late, short of cash because the NatWest ATM in Kensington High Street is out of action, to find we are in fact the only company there, with the exception of two young ladies who look a little conspicuous on their own at a table in the corner. We have about 30 of my team present, and L, always a gentleman, and resplendent in his kilt, quickly invites the ladies to join our group.


I think they have a fun evening but L and I are somewhat disturbed by the young men of today. These two women are more than slightly attractive, single, and one is actually the owner of a small recruitment company. Yet none of my young chaps make any move - indeed, L and I are also about the only ones to make an effort to talk to them (and he's older than me). Are all my guys terrified of women? Or of being accused of sexual harassment? Or of their girlfriends (who are not here tonight.) I think we need to know. The very future of our species is at risk here if libidos have sunk to this level, or perhaps it is just a sad commentary on young, male Purchasing managers!


The disc jockey is hilarious. It is not an ideal room for dancing, and we are eating in an adjacent room that leaves him feeling a bit isolated, particularly during dinner. He also plays rubbish music, and then starts getting very annoyed about the lack of response and dancers. A couple of us suggest more appropriate music (given our age and taste) that we think will get people up and moving. In my experience something like "Word Up" by Cameo always works with a twenty-something to forty-ish audience. His response when I suggest this is, "stick to the day job mate!"


He gets increasingly annoyed with what he perceives to be our interference. At one stage he announces to us all that, as we obviously think we can do his job better than he can, he will come into NatWest tomorrow and tell us how we should arrange mortgages. I don’t think the concept of giving the customer what they want has quite penetrated his consciousness. In the end, we have a good evening, nobody gets too drunk, ill or embarrassingly affectionate. Or at least not until I've left to catch my last train ...

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