Procurement: A CEO’s Secret Weapon

The story of Jack Smith is instructive for any business leader. He was given the daunting responsibility of delivering the turnarounds of GM Europe, and then of GM North America, and then of the entire company, and he delivered, every time. This was because he turned to what he called his secret weapon: the CPO and the procurement function. Although Smith was not a procurement specialist, he un­derstood the value that the function could offer, and he was ready to cultivate a new corporate mindset and give the CPO a seat at the table and a wide mandate for change. Of course, nearly 30 years on, the world has changed, and CEOs cannot expect to have the same impact simply by reprising Smith’s actions. He was narrowly focused on the bottom line and cutting costs, whereas today a sophisticated procurement capability can be used to deliver top-line growth. But by drawing inspiration from GM’s former CEO and elevating the role of the CPO, today’s CEOs can have a transformative effect on their companies.