22 July 2010 | Rima Evans

Looking for evidence that a career in procurement can catapult you to becoming a head of business or into other interesting or challenging roles? Rima Evans finds some prime examples

What do a World Cup ranking football referee, mining company chief executive, operations head of one of the world’s most iconic and sought-after technology brands and a stand-up comedian have in common? They all started out in procurement.

Not only that, most of them, including top-flight professionals who are now leaders in their field, have used the discipline as a platform for driving their career success. They have used the key business skills they learnt in purchasing and supply chain management – negotiating, people and financial management – to get to the most elevated positions.

And it seems experience and expertise in buying can be an advantage even in the most unlikely fields.

Former World Cup referee Brian Hall, who established a career in purchasing while pursuing his refereeing ambitions, told SM: “As a procurement manager, I was able to transfer many of the skills I learnt in the office to the field, and vice-versa.”

Over the following four pages we profile people who reached the top of their game but benefited from a spell in procurement.

TIM COOK, Chief operating officer, APPLE

Former procurement professional Tim Cook has enjoyed meteoric success and is now touted as the person who will one day take over from Steve Jobs as CEO of Apple.

As chief operating officer since 2005, Cook is responsible for worldwide sales and operations, including end-to-end management of its supply chain, sales activities and service and support in all markets and countries. He also heads Apple’s Macintosh division and plays a key role in the continued development of strategic reseller and supplier relationships.

Although little is known of his background and he is widely described as a man of low public profile, Cook was catapulted into the business hall of fame last year when he took over the reins at Apple while Jobs was on leave for medical reasons.

Time magazine labelled him “the new Steve Jobs ” and “the leader who has long helped steer Apple’s ship behind the scenes”. In fact Cook had already slipped into the CEO’s shoes for two months in 2004 when Jobs was being treated for cancer.

Cook joined Apple in 1998 as senior vice-president of operations. Prior to that he served as vice-president of corporate materials for Compaq.

For the past two years, Apple has been named as best supply chain in the world by AMR Research – and it is Cook who is credited with creating the highly successful model.

“He turned a company that was on the brink of bankruptcy into one that is generating a huge amount of cash,” Charlie Wolf, an analyst at investment banking group Needham & Co, tells SM.

SAM WALSH, CEO OF RIO TINTO, IRON ORE DIVISION

Sam Walsh, chief executive of mining company Rio Tinto’s Iron Ore division, is procurement born and bred.

Not only is he the leader of one of the company’s five principal global products, Perth-based Walsh is also an executive director. He sets the strategic base for the organisation whether through growth, use of technology, cost management or vision for the future. The current resource development plan runs up to 2067.

Walsh began his career as a trainee buyer in the purchasing department of the parts and accessories division of General Motors Holden, progressing to the top of the company’s supply business in 13 years.

“I moved swiftly through the purchasing structure with promotions every couple of years,” he tells SM. Positions he held ranged from buyer, purchase analyst, purchase agent, through to senior purchase agent, purchasing manager and supply manager in charge of all materials management.

Walsh was then headhunted to become director of engineering and supply at Nissan Australia, and later went to Rio Tinto, initially as MD of its foundry businesses.

So what makes a good buyer? “Someone who works as part of a team and questions everything. Some buyers, unfortunately, treat their purchased items as a ‘black box’ and do not interrogate the organisation about value in specification or use.”

And the procurement function has taught him the following business principles: “The importance of purchased costs to the business, the power of negotiation and the criticality of taking into account ‘total’ acquisition costs over the life of a piece of equipment.”

Walsh, who was recently awarded CIPS fellowship, sees himself as a strong team player, who is inclusive and approachable.

“I support a leadership model focused on values and ethics, engagement and communication, measured risk-taking and entrepreneurial spirit, community involvement, and that which positively advances business value.”

It’s perhaps not surprising that Walsh’s deep procurement roots mean he would recommend purchasing as a career. He said it “provides an insight into all aspects of business.”

And his passion for procurement has even been handed down the family line.

“There couldn’t be a greater recommendation than the fact that my youngest son Tom Walsh is a purchasing manager,” he says.

WANDA SYKES, COMEDIAN

US stand-up comedian Wanda Sykes, who has been ranked among ‘America’s 25 funniest people’ according to Entertainment Weekly, began her career in a much more covert role – as a procurement officer at the US National Security Agency (NSA).

She went to the NSA, an intelligence-gathering organisation which describes itself as “home to America’s codemakers and codebreakers” straight after graduating. There the Emmy award winner, who has since regularly appeared in the hit comedy Curb Your Enthusiasm, eventually served as a contract specialist dealing with the procurement of spy equipment. After five years at the NSA, she swapped her day job for the comedy club circuit. Her first big break came when she opened for Chris Rock. And last year saw the premier of The Wanda Sykes Show.

BO ANDERSSON, GROUP PRESIDENT AND CEO OF GAZ GROUP

Bo Andersson started in procurement at Saab in 1987 and became vice-president of purchasing there three years later. In 1993 he moved to GM, taking up a number of roles and rising to group vice-president of global purchasing and supply chain. He also streamlined a supply chain of several thousand suppliers, cutting $2 billion (£1.32 billion) annually from the company’s purchasing costs. Andersson moved to GAZ in 2009 as president and chairman of the board of directors before taking up his current role at the start of this year.

So what are the secrets to his success?

He tells SM that procurement has taught him many things including never give up and always put yourself at the heart of crisis management.

“Such principles helped me a lot in my first year with the GAZ Group since Russia, like most other economies, experienced economic recession. Despite the difficult conditions, we worked through and managed to restructure the company’s debt to the banks and launch an upgraded light commercial vehicle.”

His experience with the procurement team at GM, in particular, shaped his business thinking and took him forward.

“I had to deal with a very diverse supply base. I was responsible for the purchase of all outside materials including machinery and equipment. Our annual shopping list reached about $100 billion (£66 billion) and it was very important that we were able to measure every aspect of our suppliers’ performance. I came to believe that any good working relationship should be based on facts and data, and that people should be accountable for the results.”

Andersson gives this advice for climbing the corporate ladder: “The motto of any person working in procurement should be ‘to buy the best quality at the right price’. Also important is communication, teamwork, treating people with respect and being transparent. In doing all these things you can achieve any goal you set for yourself or your company.”

BRIAN HALL, MANAGER OF ASSESSMENT AND TRAINING, UNITEDSTATES SOCCER FEDERATION

Brian Hall fulfilled his lifelong goal when he became a FIFA referee in the 2002 World Cup in Japan and Korea.

It may seem like an unusual combination but Hall, who was a FIFA referee between 1992 and 2007, says the disciplines complemented each other and improved his performance in both.

“Refereeing is about player/people management, similar to procurement. In the office I was involved in a lot of negotiations and contracts – these were pressure situations and I had to think on my feet. Handling pressure, thinking fast and finding creative out-of-box solutions are vital both as a procurement manager or as a referee on the world stage.”

Hall started as a purchasing assistant with Dataproducts in 1983 after graduating with a marketing degree. Eventually he rose to the senior post of vice-president of procurement at Visa. After that Hall, who was four times named Major League Soccer referee of the year, worked as a product director for an e-procurement tool at Remedy. Following a company buyout in 2001 he left the company to focus on being selected to referee in the 2002 World Cup.

His two careers were made possible by long hours: “I would be in work very early and leave late while taking one-and-a-half to two-hour lunches to train”; and remote working, “wherever I went, I took my office, my laptop and my work with me.”

Management of both careers was also made possible by “fantastic bosses who understood my refereeing passion”.

Hall has retired from officiating but if he hadn’t achieved his aspirations on the football field he insists he would have continued in purchasing: “Procurement is a great profession because it tests your abilities with many different challenges. It really helped my refereeing and refereeing helped me be a better procurement professional.”

AMYAS MORSE, COMPTROLLER AND AUDITOR GENERAL, National Audit Office

As chief designate of the UK’s public spending watchdog, Amyas Morse is “Whitehall’s top financial inquisitor”.

His background is in accountancy and he had a long career with PricewaterhouseCoopers. He also held the post of commercial director at the Ministry of Defence (MoD) between 2006 and 2009, where he was responsible for improving procurement and shaping the department’s relationship with industry.

It is during this relatively brief spell, says Morse, that he learnt much from the procurement discipline, describing it as ‘invaluable’ in shaping his business thinking and promoting his career. 

“The NAO assesses the value for money of government procurement projects as part of our role as the auditor of central government spending, so my experience at the MoD has given me a real insight into big procurement projects and their potential pitfalls.

“A common hazard in big procurement is being over-ambitious about specification – to go for ‘leading edge’ instead of ‘good enough’ and less risky. There is often a significant degree of optimism bias, and an under-estimation of risk in procurement and integration.”

Morse advises: “The key thing is to keep it simple. An error often made with IT projects is over-complication. I have been championing the lessons of standardisation and simplification in government procurement as part of my current role.”

He explains further how his background in procurement is directly benefiting him in his current post.

He says: “Many of the riskiest parts of public projects involve procurement, yet people at a senior level in government departments, although very bright and often
very creative, rarely have a background in commerce or procurement which can be a hindrance to achieving best value. The public sector buys a great deal so in my job it is essential to have an understanding of the problems that departments face.”

He says the best way to prepare for a role at the top is to: “Learn to apply skills in the wider context of management generally and financial management specifically.”

Morse says he is goal-orientated but believes work should be fun. “Communication is key and I try to communicate directly with staff at the NAO. This is important because a professional services organisation like ours delivers through its people, so having their buy-in is key to doing a good job.”

 

SUCCESS STORIES: GLOBAL BUSINESS LEADERS

Ian Robertson, named by the media as “probably the most powerful British person in the global car industry” is a board member of BMW, heading sales and marketing. But the former CEO and chairman of Rolls- Royce also had a three-year stint as purchasing director at Rover in the 1990s.

The president, chairman and CEO of iconic US retail brand Macy’s began his retailing career as a buyer. Terry Lundgren started as a trainee in 1975 with Bullock’s, a Californian department store chain. He held positions of increasing responsibility over the next decade in buying, store management, HR and senior-level store management. Lundgren first became CEO at only 37 at Neiman Marcus. Macy’s has more than 800 stores and includes the Bloomingdale’s luxury chain.

Bernard Rey, now chairman of Renault Sport and the Renault F1 team, spent much of his career in purchasing. He joined Renault in 1969 and later the purchasing department in 1980. In 1998 he was named international purchasing director for the group and a year later he joined Nissan as vice- president in charge of the purchasing strategy, after Renault bought 36.8 per cent of the Japanese firm.

It has been reported that Rey’s work at Nissan led to purchasing costs being cut by 20 per cent in three years. In 2004 he was named senior vice-president of Nissan, then in 2007 Rey became senior vice- president at Renault. A few months later he accepted his current post.

Tesco CEO-designate Philip Clarke is set to become Britain’s most powerful retailer when he takes over from Sir Terry Leahy next March. Clarke was a former buyer at
the business and in 1998 the board appointed him to run the group’s IT and supply chain.

Tesco’s global sales are £171 million every day.