When Gary Foster was named the “Procurement Leader of the Year” at two separate award ceremonies—the inaugural Americas Procurement Awards and the World Procurement Awards—last year, it wasn’t merely in recognition of his thirty-two years in the profession. The vice president of procurement at Highmark Health has no time for victory laps because, over and over again, he has proven to be a thought leader dedicated to reinventing and redefining what his function means not just at Highmark Health, but in the industry at large.
In discussing the massive overhaul of procurement at Highmark Health, Foster invokes Steven Covey, Daniel Pink, Brené Brown, Simon Sinek, and even Deepak Chopra, as he feels he owes a debt to the leadership and culture concepts cultivated by these authors. His effective distillation of their work into an operational model doesn’t just look good on paper; it has become part of a broader organizational transformation at Highmark Health.
Since launching a new procurement model in 2017, Foster has helped reshape integral processes, procedures, and culture at his organization. “Historically at Highmark Health and many other companies in the healthcare industry, procurement was primarily a transactional function,” Foster says. “The internal processes had become very bureaucratic and very slow at a time when healthcare leadership was looking to seize new opportunities in the changing dynamics brought about by the Affordable Care Act and the accelerating adoption of value-based care to drive improved customer outcomes. That was the backdrop of this reinvention.”
Foster’s vision was to change the core operating model, borrowing some of the best practices from the manufacturing industry but adding a significant twist that centered on deep immersion in both the strategic sourcing discipline and, more importantly, better alignment with internal clients.
“Everyone on our staff, from our leaders to our individual contributors, is expected to develop close bonds with their internal clients,” Foster explains. “This means getting invited to regular client staff meetings and holding one-on-ones with the most senior client executives. We even have folks colocated with those clients on a periodic basis.” In short, Foster wants procurement to increase its strategic participation with Highmark Health’s internal clients.
“What we are really after is a deep understanding of our clients’ business, their strategies, goals, and challenges,” the VP explains. “The more our team establishes those intimate insights, the more they become trusted advisors. This engagement process has created a positive feedback loop, as trust has and continues to be built and procurement has become an important participant in strategic conversations much earlier in the game.”
Best in Class
The results of the procurement team’s focus on client immersion have been clear. Highmark Health Chief Marketing Officer Cindy Donohoe commended the work of Foster’s team: “Our procurement department has developed into an instrumental partner for the marketing department. Most importantly, they act as true partners in our business. They constantly look for ways to add value throughout the process.”
“When we got that testimonial from Cindy, I printed it out, framed it, and put it on the wall in the middle of the department,” Foster says.
But it’s not the only sign of progress for Highmark Health’s procurement function. Since the transformation was initiated in 2017, strategic sourcing savings have grown by 600 percent. Cycle times have been cut in half. “At the same time, our team has taken on more responsibility, identified more process improvements, introduced innovation, invested in continuous professional and career development, and received recognition both nationally and globally,” Foster says.
“As leaders, we need to break down the worthy cause that the organization is pursuing and help make connections to that cause for people on the team.”
Gartner, the well-known global research and advisory firm, conducted a confidential client survey that showed Highmark’s procurement department is outperforming all benchmarks not just in healthcare, but in procurement across all industries in their research. They are literally best in class, but Foster says it’s just the beginning.
Mission and Connection
Foster says part of the success of the new model is establishing the right mission with the right connection and buy-in from his team. “I think focusing on a slogan or a series of words that everyone has memorized just misses the point—it’s the just cause of what we are about that matters,” the VP explains. “As leaders, we need to break down the worthy cause that the organization is pursuing and help make connections to that cause for people on the team. At Highmark Health, we want to be a catalyst to change healthcare in America. Incorporating that cause into interviews and hiring processes ensures that it resonates with the people you’re bringing on board to join your family. That’s really who these people become.”
And when it comes to the national and international awards for leadership last year, Foster is proud, but is quick to credit his team and their success. “I am very honored and humbled that my staff chose to submit me for these highly prestigious awards,” Foster says. “I think they would tell you that my beliefs about leadership, the creation of the right team culture, along with our vision of customer intimacy, are really the hallmarks of these awards.”
Congratulations to Gary Foster and the Highmark Procurement team. As a proud partner of Highmark, L.J. Aviation is responsible for providing a disciplined and detailed private aviation solution. L.J. Aviation appreciates our role in supporting execution of the strategic direction for a world class healthcare organization.