Vitaly Skirnevskiy, an associate partner in our Australia and New Zealand procurement practice, sat down with Georgia Wallis, executive vice president global business services and group procurement at Toll, a major logistics and transportation organization, to talk about how she and her teams unlocked value and altered ways of working by setting a bold vision, making tough choices, changing culture, and building lasting capabilities. The following is an edited version of their conversation.
Vitaly Skirnevskiy, McKinsey: Let’s start with the big picture. How has procurement evolved over the course of your career?
Georgia Wallis, Toll: I think it has moved very much from what was perceived as a back-office function to having a more prominent seat at the table. And the reason behind that is we’re living in a very uncertain, volatile world.
The procurement function needs to be seen as adding value and delivering down to the bottom line. That puts us in a very different place in the organization than where procurement was, say, 20 years ago.
Vitaly Skirnevskiy: What do you think are the persistent and new challenges for procurement?
Georgia Wallis: In the logistics sector specifically, the introduction of new critical infrastructure legislation in Australia brings a changed regulatory environment. That is challenging in the way we manage those assets on behalf of the Australian government.
We also face broad global challenges. We see rising competition from subcontractors we had previously engaged who are now coming to the forefront and engaging directly with customers. There are challenges around the macroeconomic situation with tariffs and the freight moving through. There are also the challenges of the high inflationary environment we’re all working through.
Vitaly Skirnevskiy: Where do you see the key opportunities for procurement?
Georgia Wallis: The key opportunities are to present a strong fact base that helps support more strategic and long-term decisions for the organization. It’s the deep commercial analysis around why we’re making certain choices now, and what the long-term impacts of those choices will be.
Vitaly Skirnevskiy: Do you believe procurement as a function can take a leadership role in organizations today?
Georgia Wallis: Absolutely. What greater position is there than helping to influence the cost line in an organization? If you’re collaborating successfully with finance, with the business, you are working together to deliver the short-, medium-, and long-term cost plans.
Vitaly Skirnevskiy: You recently led a successful procurement transformation at Toll. What was the vision? How did you approach it, and what were the key outcomes?
Georgia Wallis: One of the core objectives was to unlock bottom-line value, which we did very successfully.
Our broader ambition, however, was to change ways of working by adopting an enterprise agile approach and forming cross-functional squads. The level of collaboration within the organization increased exponentially. Silos were broken down, and at the end of the journey, procurement had a very different working relationship with the business.
One example was an initiative around asset utilization, in our case focusing predominantly on trucks. We wanted to understand demand patterns, consumption, and specifications, as well as utilization principles and how we could optimize those.
So we worked cross-functionally with the business, and with frontline workers and their functional colleagues, to build cross-functional squads that delivered a bold savings goal over an 18-month period.
We designed our reporting to understand the way we currently use our trucks and warehouse space, and to study it over a period of time to spot the optimization opportunities—in both customer facilities and our own.
The initiative reached into and changed many areas of the organization.
Vitaly Skirnevskiy: Over the course of the transformation, how did you manage to bring others on board?
Georgia Wallis: We had formal mechanisms around steering committees that we utilized on a monthly basis to help to clear roadblocks. And we had sponsorship at very senior levels of our organization—executive sponsorship of particular squads—which helped generate outcomes.
We also spent a lot of time brainstorming so that what came out of each squad was organically produced and no one felt things were being done to them. People created what they wanted to do to drive out cost, improve asset utilization, or manage demand in a different way.
There were also those who embraced digitization and built their own tools to improve their current working environment.
All of this created a sense of autonomy—self-managed teams that delivered the outcomes, which we tracked rigorously throughout the process.
Vitaly Skirnevskiy: What role do you think individual ownership has played in that regard?
Georgia Wallis: I think accountability is key. And the pride people feel when they’ve seen their initiative delivered and had it recognized at the most senior levels builds that momentum and velocity to keep going.
Vitaly Skirnevskiy: What are the toughest challenges you’ve encountered along the way, and how did you deal with them?
Georgia Wallis: Data availability and quality was a challenge, as well as breaking down silos that had been in place a long time.
From a data perspective, some of the data wasn’t always available and we had to use other means to get it. We spent a lot of time cleansing it and getting it into a format that everybody knew and understood, and that we could make decisions from. This probably took a bit longer than we originally anticipated.
I think the silos naturally broke down over time as people got more engaged in the process and saw the fruits of their labor. We used the mantra, “One Toll, One Goal”—we were all in it together, moving toward the one outcome.
Vitaly Skirnevskiy: Was there a moment when you said, “Wow, this is unexpected”?
Georgia Wallis: One of the most pivotal moments for me was when we signed off on what we called our L3 plan, which was what we all collectively agreed to commit to over the 12- to 18-month period. About six or seven months before we got to that point, I didn’t think it was possible to achieve everything we had identified, and also to have that sense of camaraderie, commitment, people feeling engaged and wanting to deliver it.
So that was a triumphant moment, and one where I took a deep breath and thought, “OK, now the real work starts.” We’ve got to deliver on it.
Vitaly Skirnevskiy: How did you balance going after big opportunities versus capturing quick wins?
Georgia Wallis: Quick wins are very important. They give you credibility.
Here’s an example of trying to balance between the two: We knew that the commercial outcomes through RFPs would take longer; you need to go through a process before they actually hit the bottom line. But we identified things like internal workshop productivity improvements, which are important to the broader business—working bottom up with the team identifying what processes and improvements they want to put in place—that then yielded results.
Vitaly Skirnevskiy: When you reflect on this journey, what would be the three learnings you have extracted and want to share with the broader community?
Georgia Wallis: For anybody contemplating embarking on a transformation, the three things I learned were: Be ambitious in what you set out to achieve; trust your people—they will deliver and know that the organization wants you to succeed; and if you create the right environment, and you communicate, and empower people, you will deliver on your target.
