Paul Buddin has been on a fast track in every sense since he joined McLaren Automotive eight years ago. At the time the maker of the £1m P1 supercar was turning over £6m and barely threatened to make a dent in the global sports car industry.
Now Buddin is not only CFO of Automotive but also acting CFO of McLaren Group that has increased turnover more than a hundred fold since he joined in 2010- a dramatic growth in one of the world’s most competitive markets, the luxury sports car bracket. Sales last year were £871m, although it produced an operating loss of £43m for the period.
Now the McLaren brand is revered the world over, having taken its place alongside some of the greatest marques in sports car engineering such as Ferrari, Maserati and Lamborghini. “I feel personally responsible for developing a big part of this company, getting us to where we are. It gives me a sense of immense pride,” says Buddin.
Buddin started at Mclaren Automotive as Financial Controller, having studied physics to Masters degree level before joining KPMG’s Gatwick office working mostly in audit– servicing clients from fast growth companies to pension schemes and charities.
But it was working with “a lot of SMEs that no-one will ever have heard of,” that set Buddin up for his time at McLaren Automotive, which was a small company at the time. He was also the first financial controller at the group. “Until the time I started it had been largely managed by a group function, and Automotive had just been spun out of the bigger McLaren group. One of the things that needed to happen was to develop its own finance function.”
Buddin’s timing was perfect. McLaren was about to go through a massive growth curve- with many aspects of growth companies familiar to him given his previous role. “I do remember thinking along the way that I have seen these growing pains before, at my time at KPMG,” he says.
As the group expanded quickly Buddin was promoted first from Financial Controller to Director of Finance and then CFO, with little chance to prepare for each new stage. “I wish I had had time to prepare, but I think some of the great leaps in life are almost a leap of faith. I’m clearly ambitious because when someone has offered me the opportunity to take on a larger role I’ve jumped at the opportunity,” he enthuses.
What is Buddin’s advice about when to take the plunge with the next big role? “I firmly believe that if the next step you’re going take frightens you, it’s the right step to take because nobody is ever really ready to take the next step in their career, you should be taking them at times when you’re not quite ready- you learn on the job when you go into it.”
That may sound bullish, but Buddin plunged himself fully into each role- building a financial control team soon after he arrived at McLaren Automotive. When he was made Director of Finance, he soon took on the interim CFO role.
When a new CFO joined the group, Buddin took the opportunity to move outside of financial control to experience the Automotive business from lots of different angles. “I did a bit of controlling, sales and marketing, I also saw a lot of engineering and product development and manufacturing operations,” he says. “Particularly because of my Director of Finance role, I was able to experience every part of the business through that growth phase, and support and aid the business,” he says.
“I’ve seen the business from different angles. I’ve also got the scars because you don’t go on that journey without making mistakes, or seeing mistakes others make. And really all that set me up for when the CFO of Automotive left as I was fortunate enough to be offered the job on January 2016,” he says.
When made CFO of McLaren Automotive, Buddin says he may not have been fully prepared. “I probably wasn’t 100% ready for it,” he admits, “But it was a challenge and I took it on, and grew into the role.”
Last year Buddin’s status rose further when he was also made acting CFO of the McLaren Group after the three parts of Automotive, Formula One and technology subsidiary McLaren Applied Technologies were merged into one, bringing with it extra responsibilities.
The Formula One team was launched by New Zealander Bruce McLaren in 1963 which was acquired by Ron Dennis in 1981 who subsumed it into the larger McLaren Group. After steering the racing team to great success he finally left the group last year after a couple of attempts to buy out shareholders led by Hamad bin Isa Al Khalifa, the first king of Bahrain.
“I’ve been a big part of the journey of raising finance, bringing the group back together with all the complexities that entails, and also leading the new strategy,” he says.
Although playing a key role in developing strategy for the group is new, Buddin has been instrumental in devising strategy for Automotive, that was spun out of the group in 2009. “I played a key part in leading the creation of those strategies over my time here, and I’m now doing the same thing for the wider group,” he says.
At the heart of the McLaren approach are the Track 22 and Track 25 strategies. The first sets out a plan for doubling turnover while remaining profitable and launching 15 models and the latter amongst other things sets out the idea that by 2025 all McLaren cars will be hybrid.
One of the features of McLaren’s approach is a highly adaptive business model that can react quickly to the changing economic environment. “We haven’t got regimental plans, we have adapted as time has gone on. You will never get any plan right first time and you need to react as you go on,” stresses Buddin.
“It might be because you got it wrong, it might be because the circumstances have changed. But if you adapt the plan you will have more chance of success, so for example we’ve seen opportunities to launch new models, to go into different places,” says Buddin. “Track 22 and Track 25 are just big lines in the sand where we’ve spoken publicly. We have a policy of continuing to develop our strategy and refreshing it every 12 months to two years,” he says.
Taking a big role in determining the group’s business model became a bigger part of Buddin’s role when he stepped up to Director of Finance and then CFO of Automotive. “I have to support the business in its strategy, discussing how to help them set off on the right path in the first place. I have make sure that everybody is pulling in the right direction, making sure we haven’t got anyone going wayward with their thinking,” he says.
“I effectively challenge the team on its process. I do that by looking to see if too much cost is going into the business, analysing output and saying if something won’t work. I also co-ordinate the creation of the business plan, having put a number of ideas into it,” he says.
“I need to know the business to do that. I have travelled to all our locations because I need to talk to the people at the coal face and understand their concerns, processes, dealers and suppliers to really get a feel of what’s going in in the market. I’m also part of the team that test our cars, as it’s important to know that the products put out are ones we would buy. I also enjoy hosting customer events, to get the customer feedback first hand,” he adds.
Despite his enthusiasm, Buddin reveals that his tenure at McLaren has included some difficult periods, reflecting the challenges of producing high end sports cars. “It’s not been easy doing what we’ve done with this business. Things go wrong but you learn resilience, it’s a bit of a cliché but we’ve needed a never say die attitude,” he reveals.
“On a number of times in my career I could have said ‘it’s too hard, I’ll walk away’. But I haven’t, even if I wanted to. I’ve learnt to be resilient and recognised that any problem can be solved. You just have to dig in and know the wider team at McLaren will solve the problem,” he says.
In the meantime, McLaren is adjusting to the threats of Brexit and increasing likelihood of tariffs. “We see Brexit as just one of a number of challenges that we face. They come from all sorts of sources. We’re quite adept at addressing them here at McLaren.
“It’s about scenario planning. We prepare for a number of scenarios, so if tariffs come in, we ask: How would we react to that? When we can do something we will plan, and where we can’t foresee something we’ll apply ourselves and work around it,” says Buddin.
Has McLaren established itself amongst the great sports car marques? “I think we are now punching well above our weight in the global sports car market. To have come as far as we have in the last seven years is remarkable given it was only June 2011 when we launched our first car,” he says.
“We are seen as a serious competitor to the established marques, I’m talking Ferrari, Lamborghini, Aston Martin and that makes me feel incredibly proud to be seen and spoken about in the same cohort as those brands,” adds Buddin.
What of the threat of Tesla and the electric car revolution? “They’re in a different segment, we’re not in the mass transport segment. I’m going to steal a line from our CEO Mike Flewitt who says we’re in the entertainment industry. After all, you don’t have to buy our cars, you buy them because you want to enjoy the journey,” says Buddin.