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The Sam M. Walton College of Business

Episode 128: David Loseby

In this episode of Be EPIC, Matt is joined by David Loseby, director of procurement at Rolls-Royce, to discuss his experiences in purchasing and procurement.Read more...

More About This Episode

In this episode of Be EPIC, Matt is joined by David Loseby, director of procurement at Rolls-Royce, to discuss his experiences in purchasing and procurement. During their conversation, Loseby shares how his wide variety of experiences transformed his career. Stay tuned to the end to hear Loseby’s advice to graduating students.


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Episode Transcript

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0:00:08.3 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to BeEPIC, the podcast where we explore excellence, professionalism, innovation, and collegiality and what those values mean in business, education and your life today.

0:00:28.5 Matt Waller: I have with me today David Loseby, who is with Rolls-Royce in procurement, and he is what we call a pracademic, which means that he has tremendous academic and practice experience. So while he's full-time at Rolls-Royce, he also is co-editor of an academic journal, he publishes in academic journals, and he has been through the PhD program in behavioral sciences and has a tremendous background that goes... It's quite vast and I want to talk a little bit about that but, David, thank you for taking time to visit with me today, I appreciate it.

0:01:15.2 David Loseby: You're welcome.

0:01:16.8 Matt Waller: So David, there's not a lot of academics or practitioners with the kind of mix that you have. One that I think of... We hired Remko Van Hoek. He's a full professor of practice here and has been very productive since he's been here. And of course, he introduced us and really thrilled to have you. I want to talk just a little bit about your background because I can see, earlier in your career, you got into procurement and purchasing very early. You spent 10 years at SmithKline Beecham in the '90s. So tell me... I'd like to hear a little bit about your transition from being a student to being in purchasing at Smith-Kline Beecham and then how you got interested in sourcing, procurement and purchasing.

0:02:14.3 David Loseby: Thanks, Matt. I think I'll probably describe that as probably a route that no careers adviser would ever have dreamt of, let alone ascribe to a student. So my background is one of a fairly, initially, very traditional sort of construction and property background as a chartered surveyor in my early days, but then recognizing that that wasn't going to be the end of the journey. I wanted to get into project management and program management. So I obviously, clearly then, did another degree and qualified in that discipline too, but through that course, joined a company, Smith-Kline Beecham, now GSK, and it was through that process and having then managed some fairly complex projects and programs across the world... So I spent probably seven or eight years with SmithKline in different countries, living and working in different countries, France and South America. So seven countries in South America, spent some time in the US, in Philadelphia where they're headquartered.

0:03:19.5 David Loseby: And so through that process, towards, I would say, probably the end of my time at SmithKline Beecham, GSK then, they said, well, actually, we tried to do all the procurement for all the complex capital spend and equipment and things like that and we've failed twice, so we thought we'd ask somebody that's actually lived it and breathed it for the last eight years. So they actually invited me to come along and take the VPN director role for global procurement, and so that's exactly what I did, and that was my flip then into the procurement.

0:03:54.4 David Loseby: So probably like many people in procurement, I suppose I became an accidental candidate in the procurement space, but what I brought about was, I would call it a hybrid approach to the then fairly standard system and process approach to procurement but actually then, I'll call it, sort of hybridized that then to fit not just the company requirement but then that particular market space. And it was through that and because of my global experience that I made a success of it, but in the process of doing that, recognized that the big thing that really I'd recognized and had done for many years was actually change and transformation, albeit in a procurement space.

0:04:36.0 David Loseby: Most people recognize that, actually, doing professional procurement and supply chain management often means then that if you have to make efficiencies and to make gains, you have to do something differently, and therefore that's effectively change management at the heart of it. And so through that process, I then became a specialist in change and transformation but with a, I'll call it with a procurement badge. And through that process, I then worked in many, many different sectors, including pharmaceuticals, but also banking, retail, FMCG, manufacturing, engineering, fleet, and the vehicle space in particular, and more recently, aerospace and defense. So I would probably classify myself as sector-agnostic. Therefore, the skills that I bring are truly about change and transformation but with a procurement and supply chain angle or lens.

0:05:29.8 David Loseby: And I think because of that, about 15 years or so ago, I realized that... Particularly, as I'd just been into two board meetings where I'd presented a case for doing something that was very logical and rational, only to find that, actually, the decision that was delivered by the board was something completely different to what the facts and figures told me. And it's through that then that I began to realize that, actually, there was another dimension, which was the human dimension of behavioral science. And so that was the journey for me then as, I'll call it, a new academic strand. Probably 'cause I was so passionate about it.

0:06:04.7 David Loseby: I actually resigned as a CPO for three months, wrote a book, and then picked up a new CPO role, chief procurement officer role, straight after that. So I guess it's something that I've been always recognized for as being the person that uses behavioral science with procurement and supply chain management. And I guess that's where I've centered on and that's where some of my academic research has certainly taken me. In fact, you mentioned Remko earlier. In fact, actually, we recently produced two academic papers that are now going through the review process together which, believe it or not, we produced two papers in about three or four months. So centered around the saliency of the pandemic that we're going through at the moment. So I guess my career is probably a bit of a shaggy dog story, as we refer to it in the UK.

0:06:56.1 Matt Waller: When I look at your background, probably the biggest outlier would be banking, from what I could tell. But I could imagine your experience in banking would be quite helpful in terms of supply chain management and purchasing. But like you say, you don't plan your career, but sometimes the twists and turns, while they may not be obviously helpful in the short run, do help in the long run. And I was just curious, we haven't talked about this, but I was just curious about your take on your experience in banking.

0:07:36.0 David Loseby: Yeah, it's a very interesting one, actually. And I think, as you would imagine, in the banking sector, there's a huge focus on risk because obviously the banks are lending companies large sums of money. And in fact, it was quite interesting as the Change Director for Barclays Bank, I was actually asked to join the Risk Committee and through that process, got to understand the whole KYC, the know your customer sort of process, understand the risk, I'll call it modeling and profiling, and some of the more strategic decisions around lending.

0:08:08.0 David Loseby: And I think that, for me, that the parallels actually have held true in many, many instances, and risk is no stranger to that. I think, again, getting a deep understanding of risk, risk methodology and the newer enterprise risk management approach, all of those things start to then make absolute sense when you recognize that and understand, I'll call it, the core principles and the approaches in these areas, because there is a huge amount of transferable skills and approaches that can be taken from sector to sector.

0:08:46.2 David Loseby: And I guess that's why over many years, I've always argued, and hopefully successfully, that within three months, taking the transferable skills that you have, you should be able to be operating effectively in another sector. And I think that that is the one thing that I will probably say to most people coming through their career that I've mentored over the years, which is, don't be frightened about moving sector to get experience. Don't be frightened about sometimes going into areas where you think, "Oh, my. Have I really, really agreed to do this?" That's just a huge learning opportunity and you become, as an individual, hugely more valuable because you have this breadth and depth understanding of a subject or a topic.

0:09:33.3 Matt Waller: And I've had a number of people on this podcast recently, especially some alumni who are CEOs of companies now, where they were talking about one in particular, and he, in his career... He got his MBA from here He was very intentional early in his career not to just taking vertical promotions which would help financially in the short run, but rather to take lateral moves and even lateral moves at other companies because he wanted to improve his general management experience so that he... He knew he wanted to be a CEO someday when he got his MBA here. I just thought it was interesting that he was that intentional from early on. That's a hard thing to do. Sometimes it happens to people accidentally, sometimes intentionally, but there is a lot of value in having a wide variety of experiences.

0:10:34.5 David Loseby: Absolutely. And I think it's something that I can totally understand and resonate with because having done a couple of lateral moves myself... And in fact, I remember once being challenged by a colleague of mine saying, "Why are you doing that?" I think the expression he used was something like, "How can you afford to do that?" And I turned around to him, I said, "How can I afford not to do that?" I said, "Because I'm not thinking of today. I'm thinking of tomorrow." What I articulated to this colleague of mine, I said, "I can accept this for two years or three years or however long it may be and accept the fact that somebody may make a, what I call a diagonal move, slightly upwards." I said, "But when I make my next move, I will leapfrog over the top of you because I set out," I said, "I want to be the director of an organization before I hit 40. I want to be there by my mid-30s as an executive director," which I achieved, thankfully.

0:11:29.2 David Loseby: But I think having that tenacity and having that vision. In fact, I actually even sat down and wrote myself a 10-year plan. It didn't go exactly to plan, but elements of it certainly fell into place. And I think it was the recognition that I had already mentally prepared myself for lateral moves. I had already prepared to think about other sectors. I had already prepared to think, you know, thinking outside the box. But I think what it is, it's about thinking about what are the possibilities and not being constrained by... It's classic Herbert Simon bounded rationality, isn't it? Let's not be bounded by the rationality that we have today. Let's think about what the possibilities are beyond where we are today. And I think, I know I reflect on some people who, in my terms would be very academically naturally gifted.

0:12:18.4 David Loseby: I remember a guy when I did my college studies. He could wipe the floor with me every day of the week, but he didn't have that vision. He didn't have that tenacity. He didn't have that work ethic. And so, almost like a candle, in a sense, he fizzled out after a period of time because he just didn't have that factor that said, "I'm going to get to where, in a sense, my capabilities will allow me to get to." And so therefore, I think it is inherent in many people, particularly when you are buried in the midst of a mid-term exam or whatever it happens to be, thinking, "Wow, these are pretty dark days. I'm working. I'm studying nights, weekends. I have no money, etcetera, etcetera." You've gotta get beyond that. You've gotta have the mental stamina to get beyond that and see through to the other side.

0:13:11.5 Matt Waller: So David, you're now with with Rolls-Royce, and Sir Henry Royce is well known for saying, "Take the best that exists and make it better." And I think it's interesting to think about the brand. The brand of Rolls-Royce is quite remarkable. Things that come to mind when you think of Rolls-Royce... Regardless of the product line, what comes to mind is hand craftsmanship, finest materials, masterful skill, right? And luxury. Those are some of the things that come to mind. And that's the essence of Rolls-Royce, and it's so important to Rolls-Royce that it has to be in all aspects of the company. How does that affect supply chain management and purchasing?

0:14:13.5 David Loseby: I'd say it's probably ubiquitous across the organization, in terms of the fact that everybody recognizes... I'll call it the heritage and the brand cachet, and I think everybody recognizes that. How can I put it? Proud to be working for Rolls-Royce. So I think it's an enduring characteristic of anybody and everybody that does and has worked for Rolls-Royce. And so I think that that will never disappear because I think the preservation of that is hugely important. And I think also in some ways, it also defines then the culture.

0:14:51.5 David Loseby: They are not as risk intensive as many other organizations, they are more risk conservative, albeit that they are pushing the boundaries of, Rolls-Royce, the engineers, have developed aircraft that are... Electric aircraft, where they can fly 300 miles and in terms of 3D parts and modeling and that kind of thing, absolutely, but what I would say is that there is nevertheless a rigorous process underneath that that says we need to be absolutely sure before we declare that this is a viable product or a viable mechanism or innovation or whatever it happens to be, and that it is absolutely stress-tested.

0:15:33.6 David Loseby: Well, when you think about the fact that Rolls-Royce has become such a remarkable engineering-oriented company, it's really transformed over the decades, but to think that currently, just in civil aerospace, there's over 13,000 engines in service around the world, and these are engines that have to be fail-proof. In defense, you've got 16,000 engines in service, currently in service around the world, and then, of course, you have other types of engines, power systems in general, but regardless of whether it's for airplanes or what other kind of power systems, and whether it's civil or defense, these are things people depend on, and when you talk about supply chain management, a lot of times people don't realize how critical... A lot of times people jump to manufacturing when they think of these kinds of things, but really, manufacturing is so dependent on supply chain management and procurement, purchasing, sourcing, in general.

0:16:52.6 Matt Waller: I would imagine that when I look through your resume, I would say of all the companies on there, this company may require the most precision of all of them, but I don't know if that's true. Do you sense that in your work?

0:17:09.2 David Loseby: As I say, I would see that as being probably parallel to GSK, SmithKline Beecham, because of the pharmaceutical sort of rigor. And I guess in the same way, you look at the recent tragedy of the submariners in Indonesia, where the propulsion system failed, the submarine sank to the floor and broke up. As you say, the dependency in a sense of a propulsion system, be it sub-surface or surface level when you're out at sea, is equally as important as an aircraft in the air, and therefore the amount of dual systems, testing, even to the extent whereby we've got lots of engines that are not currently being used on aircraft, people perhaps don't realize that they have to go into a control hibernation state to preserve the engine, so there are many, many things that wouldn't ordinarily be considered if you had a car or something like that that you had in your driveway. If you didn't use it for a year, maybe you have to switch out the battery and give it a service and change the oil, etcetera, but it'll be no big deal.

0:18:13.1 David Loseby: It would be a very big deal if you put an aircraft in the air and hadn't run a complete and thorough re-check before the aircraft left the ground. One of the things that comes to mind for me always is, and in fact, when I think of some of the collaborations we achieved during the pandemic, the whole sort of collaboration, and I use collaboration very carefully, because the orchestration of skills, resources, capabilities, in situations where we produced 5000 ventilators in 12 weeks, we produced nearly 30,000 face visors in five weeks for staff and for medical service, the skills in a sense, in terms of effective listening, effective communication, collaboration skills, developing trust, and these are skills that are absolutely nothing associated with the STEM skills that we have, in terms of systems, processes, etcetera. And being able to articulate, knowing when to lead and knowing when to be led, and all those kind of characteristics, are hugely important of a modern-day leader and manager, and so therefore for me those skills are hugely, hugely important.

0:19:27.8 Matt Waller: David, what advice do you have for students that are graduating this year?

0:19:33.5 David Loseby: What I would probably say is, and one of the things that I say to many people is, you have to decide whether you want a career or a job, and that determines then whether or not you want to continue to sort of improve yourself. And this whole concept of continuous professional development is so, so important, irrespective of what role you do, what level you're at, what phase in your career you're at or anything like that, so really, really invest in yourself, because if you don't, then you become obsolete and that will be the worst thing that you could ever do.

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0:20:11.9 Matt Waller: Thanks for listening to today's episode of the BeEPIC Podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us wherever you find your podcast. Be sure to subscribe and rate us. You can find current and past episodes by searching BeEPIC Podcast, one word, that's B-E-E-P-I-C Podcast. And now, Be Epic.