CEO Q&A: Mike McGrath, Arvo

Business, Interviews, Ireland | Wed 11 Apr | Author – Business & Finance
Mike McGrath, Managing Director, Arvo

In the next CEO Q&A, Mike McGrath, Managing Director of Arvo, speaks of the vast world of procurement and how his many initiatives can help organisations in this area.

Q. What are your main priorities and goals in your role?

Goals and priorities evolve but the current focus is to launch and grow the Procurement Transformation Institute (PTI). PTI is a competency centre that provides a gateway to procurement education, thought leadership and training while empowering the buying community. 12 months ago PTI was an idea and last month we had our first public unveiling at the National Procurement Summit in Dublin, so the main priority for 2018 is to develop each PTI service offering so we professionalise the procurement profession. These procurement services provide training (PTI Academy), education (PTI Education), research (PTI Research), while building a peer-to-peer network (PTI Community) supported by best practice from Europe (PTI Europe).

Q. What are your biggest challenges as CEO?

With the above goal to grow PTI, the biggest challenge is to create brand awareness for this infant business. We need to create credibility and trust with a disparate procurement community, while ensuring all service offerings remain relevant. From a standing start, it won’t be easy to create an industry-recognised institute but that’s the challenge that motivates us entrepreneurs! The research for PTI was undertaken by Arvo and iDDea, and a similar challenge is to continue providing excellent services through these niche procurement consultancies while growing PTI. So like many CEOs, challenges relating to prioritisation, focus and time-management are tackled daily.

Q. How do you keep your team/staff motivated?

We have an unrelenting “focus on the ‘Why'”. As a progressive team, we regularly hold off-site meetings to assess our direction and growth plans. Defining and communicating a consistent goal amongst the team creates a shared ownership and involvement. We assess our relevance, impact, journey and direction to guide the company, management and individuals within. It works for us and, essentially, higher purpose leads to higher performance.

Q. What are the challenges facing the industry going forward?

The major challenge for our industry in recent years is set to continue in the short term, which is a shortage of qualified personnel to fill key buying roles. With limited formal education courses and a lack of certified professional development opportunities, a skills gap has emerged in our industry, but thankfully, PTI is addressing this challenge head-on. Investment in procurement technologies and training has been limited for the past ten years, so we are excited to be at the forefront of this industry-wide campaign to professionalise the procurement profession.

Q. What new trends are emerging in your industry?

Considering procurement’s role throughout the supply chain, all revolutionary technologies from AI to machine learning, and from blockchain to drones are having a major impact on our industry. If half the claims from these technologies’ white papers are correct, strategic sourcing and procurement will never be the same again; when cheaper products, with improved governance, compliance and traceability will be delivered by robots with minimum risk and impact to the planet. These trends are not unique to procurement, but they will impact sourcing professionals before many other functions.

Q. Are there any major changes you would like to see in your sector?

Considering we have emerged from the global recession and companies are now more positive in their outlook, procurement’s function needs to be realigned with this growth-oriented trend. Procurement needs to migrate from the cost and compliance focus of the past to profit centre with value-add in future. Progressive organisations have made this transition but this major change requires further investment in most companies.

Q. As an employer are you finding any skills gaps in the market?

In addition to the shortage of qualified personnel throughout the spectrum of procurement roles mentioned already, we have noticed recently a significant dearth in blockchain expertise, both from a design/engineering perspective and subsequent development expertise. Over the past few years we have been researching

the merits of creating a decentralised group trading platform to enable seamless trading experience for unknown buyers and sellers, with the blockchain skills gap hindering progress. Admittedly, these cutting-edge technologists are in high demand with the goalposts for this technology evolving rapidly. Blockchain technologies are here to stay, so we would be supportive of any education/training courses created to address this need.

Q. How did your strategy develop in the context of the banking crisis and economic crisis?

Arvo, and before that, were born out of the economic crisis, where businesses had an unrelenting focus on cost control and supplier management. The crisis triggered an interest in our services to deliver procurement objectives, business efficiencies and commercial savings, and even post-crisis, this attitude within most companies to ‘guard every euro’ bodes well for the future competitiveness of Ireland.

Q. How will Brexit affect you, or have you started to feel the effects already?

Brexit has been a great opportunity for our global sourcing business, which has had a spike in activity sourcing from the likes of Eastern Europe, China and India. We are in the minority where Brexit is good for business and we have been very busy providing strategic sourcing advice to proactive businesses throughout the country. We expect this trend to continue and we are exploring logistics and currency partnerships to deliver a full suite of Brexit solutions for businesses whose supply chain will be in turmoil should the full British exit from the EU occur.

Q. How do you define success and what drives you to succeed?

Success is the accomplishment of a goal. Thankfully when I was starting my career I undertook a goal-setting and productivity course, which has helped me with short-term, medium-term and long-term goal-setting. This challenging and goal-oriented focus drives me to succeed in business, in sport, for my young family, in fitness and for personal development.

Q. What’s the best advice you’ve been given, or would give, in business?

I was lucky enough to take part on the first Entrepreneur Experience in Garryvoe Hotel years ago and one of the seasoned entrepreneurs told me to make sure my business proposition addressed a “big problem for a small number of people, and not a small problem for a big number of people”. This advice was very relevant then and continues to guide the creation of our value propositions in future.

Q. What have been your highlights in business over the past year?

The first win for PTI was to successfully bid for and join the European Commission Procure2Innovate consortium. This €2 million-funded Horizon2020 initiative was formed to promote and disseminate innovation procurement best practices across Europe, specifically to improve support for public procurers in implementing innovation procurement practices. This project will establish and expand ten competence centres for innovation procurement in ten EU member states, of which PTI is the Irish representative. This win for our fledgling business was the highlight of 2017.

Q. What’s next for your company?

As mentioned, we now need to scale and grow PTI to maximise the impact of the roles played by all full-time and part-time buyers. While we build our competency centre and share European best practices, we also need to galvanise Arvo’s position as a niche procurement consultancy in Ireland.

Q. What opportunities or plans for growth do you see in 2018?

The sectoral trend to ‘professionalise the procurement profession’ will create many opportunities for PTI in 2018 and beyond. It is exciting at this stage to be planning for growth with sales and marketing plans, hiring schedules and partner development opportunities, so we see expansion for all service offerings in 2018.

Q. Where do you want your business/brand to be this time next year?

Put simply, the Procurement Transformation Institute needs to be a recognised training body and knowledge centre for Ireland’s buying community.

I was lucky enough to take part on the first Entrepreneur Experience in Garryvoe Hotel years ago and one of the seasoned entrepreneurs told me to make sure my business proposition addressed a “big problem for a small number of people, and not a small problem for a big number of people”. This advice was very relevant then and continues to guide the creation of our value propositions in future.

Mike McGrath is Managing Director of Arvo, an award-winning procurement consultancy in Cork backed by Enterprise Ireland and co-founder of the Procurement Transformation Institute, which was launched at the recent National Procurement Summit in Dublin.